Follow-Up on Budget Open Forum and Future Scenarios, May 14, 2009
On Monday, we held an open forum to discuss the proposed FY10 budget, including a wrap-up of FY09. We welcome your feedback on the FY10 budget as we continue to refine it between now and the June Board of Governors meeting. There are a couple of official avenues for sharing your comments: send an e-mail to email@example.com; write to me in care of the President’s Office; or if you happen to catch me running between meetings on campus, don’t be shy.
It’s difficult to discuss the FY10 budget without also speculating further into the future — specifically regarding possible scenarios for managing our resources over the next several years to prepare for the time when one-time, federal stimulus funds are no longer available to help mitigate Colorado’s higher-education funding challenges. While I remain confident that our state will take advantage of the opportunity that the stimulus funds provide to establish sustainable funding for public higher education, I think we need to continue to be prudent in our planning and not assume such a resolution when preparing our budgets. We built some of that context into the open forum presentation, and the slides from the forum are available online at www.formerpresidentfrank.colostate.edu/, in the President’s Spotlight section.
The last two slides require a little bit of explanation. These are nothing more than illustrations of possible approaches we could take to prepare for the time, a few years down the road, when the one-time support provided by the governor through federal stimulus dollars is no longer available. I’ve heard a lot of concerns that once the stimulus money is gone, we could find ourselves facing a pretty steep revenue drop. The scenario we depict in these last two slides is simply intended to demonstrate that we have many potential paths forward. Even if the economy remains slow and our state doesn’t establish a higher ed funding foundation, none of these paths approaches the level of cuts that many of our colleagues at other public universities across the nation are experiencing.
Despite this context, I understand there are many arguments about future approaches to the budget that are raised by discussing such scenarios, and I am sure our campus will have active discussions about our budgets as we move ahead. Some of the discussions on this topic to date are paraphrased below:
- “We don’t know what the future will hold, so there’s no way to predict whether these sorts of illustrations will be useful.” Absolutely. These scenarios are based on any number of factors that we have no way of actually predicting … but they do show that we could effectively approach our financial future even if nothing changes over the next several years.
- “This approach is ‘death by a thousand cuts’ … instead of taking a series of small budget cuts over several years, why not just take it all in one year?” This is a legitimate point, and I’ve argued it both ways. Our approach can be altered, including making any given year’s small budget cuts vertical rather than horizontal — all options will remain available to us. But ultimately, part of our obligation — having accepted federal stimulus funds that were intended to mitigate job loses for the good of the economy — aligns with our responsibility as the largest employer in Northern Colorado during what is quite possibly the worst job market most of us have seen in our lifetimes. There would be no way to sustain a deep, single-year budget cut without eliminating a substantial number of jobs from our payroll. We would be letting people go at a time when there aren’t a lot of available jobs to be had, and this would spiral into a cycle of negative impacts on local business and the area economy. On the other hand, a series of smaller, scheduled reductions would allow us to manage cuts largely through attrition and less drastic means, and it also acknowledges that we may actually see some improvement in the economy and state support for higher education a few years down the road that would make this scenario obsolete.
- “This approach is nothing more than a Band-Aid; the underlying problem isn’t addressed by this approach.” That’s true, but there’s a reason Johnson & Johnson has sold more than 100 billion Band-Aids in the last 90 years. Sometimes, a Band-Aid is what you need to deal with a problem at a particular moment. Ultimately, we will need a statewide conversation about a reliable, sustainable funding stream for higher ed, and there seems to be considerable interest and will for moving this conversation forward. But even in the absence of such a conversation and the solutions it should bring, these models show that we are still a vibrant, healthy University and will continue to be so with the resources we have and a sustained commitment to careful management of our available funds.
Ultimately, this set of scenarios allow CSU’s most important asset — its people — to feel comfortable that there’s a sustainable, stable future ahead at CSU, even if we wind up facing worsening economic conditions on top of this already conservative approach. This is not intended to be a five-year roadmap, and it’s our hope that any number of these parameters will improve and allow us to move forward to invest in the growth and quality of our institution. But either way, CSU will be just fine — in no small part thanks to all of your efforts.
On that note, I want to wish you all well as we wrap up finals week and head into commencement weekend. Thanks for all you do for our students and CSU, and have a great summer!
Dr. Tony Frank