NEW YORK - Public university balance sheets weakened in fiscal year 2009, and state funding as a share of revenues continued to decline, said Moody's Investors Service in a new report on fiscal year 2009 medians that incorporate new information on key liquidity ratios.
This stress in state budgets and university funding cutbacks is expected to continue into fiscal 2010 and 2011, said Stephanie Woeppel, Moody's Analyst.
"We expect that most public universities will be able to raise tuition and fees to help absorb the revenue gaps left by state appropriations, reduced spending from weakened endowments and stress on expense budgets from growing enrollments," Woeppel said.
The FY2009 medians are the first to include Moody's newly introduced liquidity ratios and provide perspective on institutions' liquidity in addition to the previously published long-term wealth metrics. "Although liquidity for the highest rated public universities is significantly weaker than for similarly-rated private universities, public universities typically have other sources of liquidity and more conservative debt structures," noted Woeppel.
Based on financial and enrollment data for 90% of rated institutions, the report highlights broad rating factors such as student demand, financial reserves, capital investment, debt and liquidity. Currently, Moody's rates 220 public colleges and universities with over $100.9 billion of debt outstanding.
