It’s easy to see what oil money means to the University of Texas. Tuition hasn’t budged in three years because of gushing wells in the Permian Basin. More than a few buildings—including the football team headquarters—are named after wildcatters, and a pump jack stands outside the 100,000-seat stadium to commemorate the 1920s oil boom.
But the Associated Press reports the latest bust and tumbling crude prices are now pinching off the largesse that helps this university and others in oil-rich states afford what they want when state budgets are straitened, which is particularly evident now in Louisiana, where lawmakers were forced to cut $3.8 million from public colleges just one month into the budget year and Oklahoma where state policymakers are warning about a half-billion budget shortfall.
Already, the consequences are becoming obvious. At LSU, energy sector gifts have fallen from a quarter of all fundraising to a tenth, which is being felt as the school tries to offer students a new minor in energy studies.
U.S. colleges received a record $38 billion in charitable donations in 2014, according to the Council for Aid to Education—a sum that helped make up for the continuing shrinkage of appropriations from state governments. Donations and endowment are 10% of the budget at the University of Texas, up from 3% in the 1980s.
But with oil prices down more than 50% since last summer, and expected to stay down deep into next year, the outlook for both public revenue and donations is grim in energy-heavy states like Alaska, Oklahoma and Louisiana. Prospects are somewhat less dim in big oil producers like Texas and California where the economy is more diversified.
Campus construction projects are being stretched out or put in limbo, scholarship funds are taking a hit and across the Southwest, donors are asking for more time to make good on big pledges.
“When the price of oil was $100 a barrel we had a lot more gifts. They had the ability to make more gifts,” says Bob Walker, who raised hundreds of millions of dollars for Texas A&M University for three decades before retiring last year. The Brent crude oil price Tuesday was at about $48 on the NASDAQ.
The Associated Press has the full story.
