Update on Next Year’s Budget, April 21, 2010
Dear Colleagues and Students:
I thought that as the semester and the legislative session near their conclusions, it wouldn’t be remiss to drop you another note on the budget. (I realize it’s only been a few days since my last epic e-mail, so thanks for bearing with me.)
There is still some negotiating going on at the legislative level over the Long Bill, but we expect all those pieces to fall into place over the next few weeks and there have been no major changes in terms of higher ed or CSU funding. We’ve continued to do some fine-tuning internally as we await the finalized Long Bill that will allow us to take a proposed budget to the Board of Governors for review at its June meeting. In addition to the administrative cuts I wrote about last week to fund our administrative reorganization, we’ve also had some positive news in terms of interest income and a few other things that will help us balance the books for the coming year. I think we’ll be able to add a bit to the university reserves (more on this later) and decrease the amount of one-time funding we’re using from the Future Revenue Contingency Reserve to balance us in FY11.
But, for all of that more positive news, we also know, after reviewing all the college and unit budget plans that were presented during our budget forums this spring, that we will continue to see some layoffs and eliminated positions on campus in the coming year — about 50 currently occupied positions, by our latest estimate.
While we all share a concern for those who are personally impacted by these cuts, it also helps to remember that — during the worst economic crisis of most of our lifetimes — we’ve been able to keep layoff numbers over the last two years to only about 1 percent of our permanent workforce. Thanks to extraordinary efforts by our Human Resources staff and departments around campus, about 60 percent of the staff members impacted by layoffs since 2009 have remained employed at CSU in another capacity, filling critical vacancies. We’ve also been able to avoid cutting any filled tenured or tenure-track faculty positions.
Still, these are extremely tough situations for employees and for the departments that depend on them, and we’re doing what we can — through a coordinated effort among various campus offices — to support those staff members who are affected. If you want more information about the assistance we have in place for those whose jobs are eliminated, visit http://www.ombudsandeap.colostate.edu.
It may be worth a moment to comment on the “FY12 cliff” that has recently been referenced more frequently in the press. What complicates this discussion, in my opinion, is that there are two “cliffs.” The first is the one we’ve been talking about, planning for, and addressing for two years. It’s the fact that in FY12, all federal stimulus funds to support higher education will have been expended. As a refresher (for those of you who didn’t commit these figures to memory for the pop fiscal quiz that could arrive at any time), CSU went into the economic downturn with $130M in state funding. The state cut $30M, but back-filled that for 3 years with federal stimulus funds (although, to be accurate, they are running out of stimulus funds in FY11, so we’ll receive $18M or so from the backfill and this is what drove higher cuts in FY11 than we had originally projected back in FY10). This loss of higher ed stimulus support is a “cliff” we’re well prepared for and with a package of modest budget cuts and tuition increases that we think we’re well positioned to sustain within the market place, we’ll have “hiked down” the $30M original cliff by the end of FY12. We’re well-positioned here because we didn’t assume something would backfill the budget once the stimulus funds were expended. I continue to think this was a wise choice, especially because there is now talk of a second “cliff.”
In overly simplistic terms, this new “cliff” that’s being referenced in the media is the state’s structural deficit after stimulus funds are spent in ALL areas of state government, not just higher ed. The concern is that the state may turn to additional higher ed cuts to free up state funds to backfill the loss of stimulus funds in areas such as health and human services. Clearly, there are many months to go before the 2011 General Assembly begins to deal with the FY12 state budget, and there are a few significant events (such as an election) that will occur before that session begins, so it’s far too early to worry too specifically about the details of such a discussion. We’ll be doing all we can at the state level to fight for sustaining higher education funding to mobilize our constituents to support our position. And even in the worst case scenarios, as we discussed at the fall 2009 Faculty Forum, our restoration of healthy reserves over the past two years will position us to be able to cope with additional budget reductions. Of course we all hope those plans never come off the shelf, and instead that we’ll be focusing on reinvesting in the university’s most valuable asset — her people.
So whatever the FY12 budget planning cycle holds for us, we’ll head into it knowing that we’re working our way through the challenges created by the economic downturn and starting to see signs of recovery. We have plenty of reasons to be optimistic about the future of Colorado State University and plenty of reasons to take pride in the resilience and strength of our campus community.
Enjoy the rest of the week — and don’t forget to check out campus Earth Day activities and the Student Sustainability Fair tomorrow if you have time.
President Tony Frank