Trouble began for Central State in 2013 when the school’s net assets declined by more than $7 million over two years, audited financial statements from the Ohio Department of Higher Education show. Today, Central State remains the only Ohio university to have been placed on fiscal watch.
Central State has evolved though, and financial stability is the new norm, said CSU board of trustees chairman Mark Hatcher, who joined the board at the end of 2014.
“It’s like night and day,” Hatcher said. “Central State is in a much better place than where it was when I started.”
‘A huge win’
As Central State has rebounded from its budget woes, the school has looked to capitalize on its momentum.
One way it has done so is by taking advantage of its status as a land-grant university, a designation that makes it eligible to receive special government funding.
Before the 2014 Farm Bill, Central State was not fully recognized as an 1890 land grant institution by the federal government, Rep. Mike Turner, R-Dayton has said. A tweak to the 2019 Farm Bill, sponsored by Turner and Sen. Sherrod Brown, D-Ohio, made Central State eligible for as much federal funding as other colleges with the designation.
With the alteration, CSU will get around $7.4 million more in grant funding this year. The university stands to receive around $12 million total in state and federal grants due to the Farm Bill change.
“That direct investment in our community is a huge win for us,” Turner said.
Rep. Mike Turner, R-Dayton, announced this week that Central State University will receive $7.4 million more in federal funding because of a change to the 2019 Farm Bill he supported. Turner also announced he is supporting a commission to find more opportunities for historically black colleges to conduct defense research.
Turner has also worked to secure $30.7 million in federal funds to establish a stronger partnership between the Department of Defense and historically black colleges and universities, such as CSU. The investment in DOD research at HBCUs will foster “an inclusive and innovative future for our country,” Turner said.
On top of its tighter relationship with state and federal authorities, Central State is expanding into areas less-studied by universities.
In July, CSU established its own hemp program after Gov. Mike DeWine approved a measure allowing it to be researched at colleges. The federal government legalized hemp cultivation last year.
Hemp —like marijuana —comes from the cannabis plant. However it contains less 0.3 percent THC. The university’s aggressive creation of the program made it Ohio’s first public institution to research hemp.
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“It’s a crop that we know is going to take off in the state…There’s so much money to be made relative to other crops,” said Criag Schluttenhofer, an assistant professor overseeing CSU’s hemp program.
Products made with cannabidiol, a hemp byproduct, have soared in popularity. Some of Central State’s research will examine CBD products and will also look at what type of hemp is the best to use and grow in Ohio.
As the demand for hemp products increases, Schluttenhofer hopes that Central State’s research will make the university an authority on it.
"'We feel that this is one of the ways that we can really contribute," Schluttenhofer said. "It's still a new crop so everybody is on the same level when it comes to research, everybody has an opportunity. We see it as us making our mark and helping the agricultural community at the same time."
Craig Schluttenhofer oversees Central State University’s newly established hemp research program. The university launched the program last month after Gov. Mike DeWine signed a bill into law allowing universities to research the substance.
Enrollment, one of the factors that plunged Central State into budget trouble, has increased at the school.
CSU’s fall enrollment fell by more than 30 percent from 2,503 in 2011 to 1,742 in 2016, according to the state.
The enrollment drop made Central State leaders more cognizant of issues surrounding access to higher education and how to help students stay and graduate on time, Jackson-Hammond said. CSU began working more closely with area community colleges in an effort to make sure transfer students were prepared, Jackson-Hammond said.
The changes appear to be paying off.
For the first time in five years, Central State’s enrollment rose above 2,000 during the fall of 2018 to 2,099 students. The number of students on campus this fall is just slightly less at 2,033, said CSU spokesman Robert Vickers.
“Part of good assessment is asking what have you done? what worked? what didn’t work?” Jackson-Hammond said. “We evaluate everything, not just enrollment but also our academic progress.”
Another factor that may be helping enrollment is improvements made to Central State’s campus.
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In 2015, the university opened a new $33.5 million student center. Retired NBA star Magic Johnson, who has been a longtime supporter of the school, was on campus to celebrate the opening.
This fall CSU is also completing a new residence hall for students.
The 250-bed facility was slated to be completed before the start of the academic year in August, but it’s still being finished due to construction delays caused by the May tornado outbreak. Around 30 students were temporarily displaced.
Along with the weather delay the room shortage was also caused by a “high demand” for housing on campus, according to the university. Though those kind of growing pains can be a short-term problem, Hatcher said.
“Where we find ourselves sitting today is all about growing the institution,” Hatcher said. “(We’re) laser focused not only on enrollment but retention too.”
Problems of the past
Though its in better shape now, Central State has a history of financial trouble.
Then-Gov. George Voinovich and the Ohio Black Legislative Caucus in 1996 asked the school’s board of trustees to resign amid financial turmoil, according to Dayton Daily News articles at the time. The state had found CSU was rife with financial mismanagement and infrastructure problems.
In the 1990s, the fixes would have cost around $71.2 million which is equal to around $116.4 million today. As of last year CSU’s operating revenues accounted for less than $68 million, according to the state.
The university’s most recent issues started nearly seven years ago and led to the state placing the school on state fiscal watch after it fell below a state threshold measuring financial health for two years in a row.
The state measures every public college’s fiscal health with something called a “Senate Bill 6 score,” an annual rating of 0 to 5. Any school that falls below a 1.75 two years in a row is put on notice.
To get removed from fiscal watch, a university must meet a rating of at least 2.4 and must also re-mediate all conditions that led to its financial troubles.
Central State scored a 1.3 in 2013 and a 1 in 2014 before increasing to 2.3 in 2015, a score it remains at today. CSU cut expenses by more than $10 million in 2015 to facilitate the budget rebound.
“Each of our colleges and universities is unique and therefore the solution to emerging from fiscal watch is likely to look different at each institution,” said Randy Gardner, chancellor of ODHE. “However, growing enrollment and programs are certainly positives for any campus and CSU is to be commended for its efforts in that regard.”
Though Central State may be on more solid financial footing now, the business of higher education is changing rapidly and causing problems for other schools.
Historically black colleges in particular have struggled to deal with the changing landscape of higher education. At least 17 HBCUs have closed or all but dissolved over the last several years, according to a report from the Dayton Daily News’s sister paper, the Atlanta Journal Constitution.
Wilberforce University, the oldest private historically black college in the country, is located just across the street from Central State and ran an operating deficit of more than $19 million in fiscal year 2017.
Although HBCUs are “not monolithic,” Jackson-Hammond said the closing of other black colleges is something Central State’s leaders pay attention to.
James Shack Harris, left, and Earvin Magic Johnson were in attendance at Central State University on Friday to celebrate the opening of the new $33.5 million CSU Student Center. TY GREENLEES / STAFF
“We are an institution fully committed to Montgomery and Greene counties in making sure there is a quality enhancement because of Central State University,” Jackson-Hammond said.
Much of Central State’s future will be in the hands of a new president though. Jackson-Hammond plans to retire at the end of spring semester after leading the school for eight years.
The board of trustees is launching a national search to find Jackson-Hammond’s successor.
It’s important, Hatcher said, for Central State’s next president to have as firm of a grip on the institutions needs as its current one. For the school’s successes to continue, Hatcher said trustees need to find the right person for the job.
“It’s critical that we find the right leader who can build upon what Cynthia has done and continue to elevate the institution to the next level. It’s primed to do that,” Hatcher said. “We need a dynamic person who sees where we’re at and sees where we could be 10 years from now.”
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