Update on Budget, January 6, 2009
Welcome back for the beginning of a new year! The 2009 legislative session begins this week, and I think we can all expect that state funding for critical needs including education, transportation, infrastructure, and health care will dominate the lawmakers’ agenda over the next four months. In anticipation of the session, and with the start of spring semester just two weeks away, I wanted to bring you up to speed on what’s happening with discussions about the state’s budget and what, potentially, this could mean for Colorado State University.
As you may have read, both the Governor’s Office and legislative staff are forecasting a significant state budget shortfall for the current fiscal year — the Governor’s budget office has projected the shortfall at around $230 million, while legislative staff predict it could reach more than $600 million. They’re still coming to agreement on the numbers, but it’s clear that any of the various forecasts and scenarios currently under discussion at the state level will result in major state revenue reductions. This, in turn, will likely mean significant cuts to higher education, as one of the few discretionary items in the state budget.
While it’s too early in the state’s budget process to know what type of budget cuts we will be seeing for next year, we undoubtedly will be facing some level of reduction. We’ve taken preliminary steps to prepare for this with the elimination of about $1.5 million in administrative spending over the last two months. We’ve had a hiring freeze in place, and we’ve asked deans, vice presidents, and vice provosts to develop a variety of budget reduction scenarios. We’re also looking at various alternative strategies for reducing expenditures, and I’ve received a number of suggestions from the campus community that merit consideration. I discussed some of these budget reduction measures in our CSU System presentation to the Joint Budget Committee in December, and the members seemed to appreciate our commitment to conservative fiscal management and accountability. I’ve also shared the various revenue forecasts and state funding reduction scenarios with faculty and student leadership to make sure we’re all prepared with the same background information as we enter our budget process for FY10.
The magnitude of the reductions being forecast is highly variable at this point, but if the institution finds itself facing severe cuts comparable to those of 2003, it will have a notable impact. To the extent possible, we will be striving to keep that impact as far from our classrooms as we can, recognizing that our first and greatest responsibility is to our students. And we must recognize that, at some point, a reduction in personnel could well be necessary as we work through the state funding cuts because salaries make up the largest portion of our budget. I realize that even raising this topic generates some level of reasonable concern on campus. All of us worry about our jobs and our livelihood, particularly during tough economic times. But I want to assure you that no decisions have been made regarding layoffs at this time and that any official announcement about staff reductions at Colorado State University will not be made through the newspaper. If such action becomes necessary, it will only be after considerable discussion with deans, vice presidents, and our University governance groups. Our institution’s greatest strength is the spirit and commitment of its faculty and staff, and many of us who have faced previous budget downturns understand how essential our people are to managing and sustaining quality through challenging times. In the event that any personnel reductions become necessary to deal with the budget challenge, the University will do all it can to manage such changes with compassion and respect.
At this point, however, we are simply waiting to see what the actual reduction is from the state. Once we know that, we will have a very open, inclusive and transparent set of discussions about how to deal with such cuts, and I welcome all of you to be involved and contribute to those discussions as we move forward.
In the meantime, we have a University to run, and we can look forward to welcoming our students back to campus over the next two weeks. As always, your efforts and accomplishments make me proud to be a part of the Colorado State community. I hope you have a great semester and you have my wishes for a happy new year.
Dr. Tony Frank