FY11 Draft Budget 3.0, February 12, 2010
Dear Colleagues and Students:
We must be moving toward spring in the normal rhythm of our planet — the days are getting longer, baseball is just around the corner, and I’m sending you budget e-mails. Unfortunately, I’m expecting this will not be the last budget e-mail you see from me before the summer solstice. Well, with that disclaimer out of the way, the latest version of the University’s budget for FY11 is available online for your review and comment.
Maybe a few words about how we have come to this budget are useful.
The budget we’re discussing displays incremental changes from the previous year to our modified Education and General Fund budget. This is a small fraction of the entire university budget of over $800M, but it is the least directed portion of our funding, it supplies the resources to our foundation as a university, and it represents the public investments that have historically been the heart of a land grant university’s operations. The version you’ll see on the web builds on the draft budget that we discussed at the Planning and Budget Hearings January 27, with revisions that address some of the highest priority items reviewed at those hearings. Your feedback on this latest version will be considered by the President’s Cabinet along with input we receive at the FY11 Budget Open Forum scheduled 9-11 a.m. March 10 in the North Ballroom, Lory Student Center. To facilitate collection of input, I’d ask that you send an e-mail to firstname.lastname@example.org. After the open forum, we’ll continue to monitor the situation with the state budget and make what should be minor refinements before taking a final version to the Board of Governors for review and approval in June (keeping in mind that the details of the state’s budget aren’t likely to be resolved by the Legislature until May).
Despite the uncertainty that always exists around the budget until late in the fiscal year, we can assume this version will likely come fairly close to the budget we will be looking at for next year. This budget is far from perfect — state support declines; we continue to make expense reductions at increased risk to parts of our university; our reliance upon tuition increases; and our ability to make the progress we desire in many key areas is limited. Having said that, I’m generally proud of what this budget represents given the magnitude of the financial crisis our state is facing, and I think the basic directions of this budget reflect who we are as an exceptional public research university committed to our Land Grant University mission.
The budget includes an anticipated state funding reduction of about $13.4 million and an $11.7 million reduction to campus units, representing a 4.9% cut to our modified Education and General base budget (and just over ½% of the total university budget). Once again, we’ve tried to take higher average cuts from administrative and support areas (5.9% on average) than from academic units (4.3% on average) to preserve the quality and capacity of our academic core. This budget assumes flat enrollment growth and no salary or benefits increases for employees other than standard promotional increases expected for about 50 of our tenure-track faculty. It includes tuition increases of 9% for resident undergraduates (an increase of $434/year); and 3% for non-residents ($622/year).
While we’ve obviously had to limit any new expenditures, this draft does include an additional $4.5M for financial aid and scholarship inflation, to assist those students most impacted by the economic downturn and increasing tuition costs. Once again, this is the largest single discretionary line item in our budget. As usual, we budget for the cost to operate and maintain new facilities that will be coming online next year, and we plan for mandatory cost increases. We’ve also addressed the impact of the economic downturn on Veterinary Teaching Hospital revenues. We have not, however, budgeted for utility increases next year — our investments in energy efficiency over the last several years are beginning to pay off in the form of reduced utilities costs. The budget also carves out some funds (listed under “Commitments/Quality Enhancements”) to honor previously existing, multi-year commitments and to make some degree of progress in high-priority areas such as student retention and graduation. About two-thirds of the funding for quality enhancements will go directly to academic program areas, and the remainder will primarily address pressing needs in the infrastructure that supports these academic programs.
As you may recall, we established a Future Revenue Contingency Reserve last year to prepare for the time when federal stimulus funds were no longer available to help backfill state funding cuts. This draft budget includes deployment from the Future Revenue Contingency Reserve of about $3.1M to address the shortfall expected for next year.
Certainly this is not the most uplifting budget any of us have had to work with, but fortunately, we’ve planned carefully and openly, and nothing in this draft should come as much of a surprise to those who have been watching it evolve over the last several months. I’m grateful for the hard work and good faith of the colleges, departments, and units as they’ve confronted some incredibly difficult decisions in mapping out their budget reductions. While far from ideal, I believe we have a draft that will allow us to sustain quality and keep the university moving forward while the economy begins to recover.
In my experience, despite the millions of dollars in play in the budget in any given year, the vast majority of input seems to gravitate to parking fees. I’m pleased to note that Parking Services has determined that it will still be able to meet its budget if we delay the permit and fee increases that were originally scheduled to take effect in the next fiscal year. As we head into the second year of no salary increases for employees, and recognizing the impact of tuition increases on our students, I’m glad to at least be able to report that we plan to suspend any parking cost increases for a year (pending approval by the Board of Governors).
For some of you, discussions about the incremental changes to the Education & General budget will raise questions about the overall financial structure of the university. I’d encourage you to check out the newly released Financial Accountability report and make plans to attend the Budget 101 informational session scheduled for Monday, 3:30 – 5 p.m. in the Cherokee Park Room, Lory Student Center. Then get out and enjoy your weekend before you start to consider a career in administration! Have a great weekend,
Dr. Tony Frank