Campus Response to FY04 Budget

[posted May 6, 2003]

The four tables included here present information on the campus’ budget challenges to complement our continuing conversation with the campus outlined in the attached memo of May 1, 2003.

Table I shows a summary of the university’s budget expectations without the anticipated reductions currently under discussion in the legislature. This first table offers a steady-state picture of what we anticipated BEFORE the current effort to resolve the state’s budget crisis. It includes the approved $1,000 student fee increase for Fiscal Year 2004 and calculates our budget using the same level of state support available in FY 2003 with no increases or reductions into future years. It shows the additional cost commitments required and illustrates the structural problem of the campus’ budget in a steady state projection with no reductions in state support and no additional increases in student fees. This first table makes clear that even without a major budget reduction the campus’ structural deficit would reach high levels by Fiscal Year 2005. That structural deficit grows even larger when we include the increasingly critical salary shortfall. This defines the baseline from which we must adjust the campus’ expenditures in response to the current legislative budget.

Table II shows the impact of the prior years (FY 2002, 2003) budget reductions and adjustments to the major budgetary units of this campus. It also includes information on changes in campus central costs and in the expenses for other items including central system support. This table gives a clear indication of the substantial reductions that most units of the university have experienced and provides a perspective on the additional reductions that we may be required to make for the coming years.

Table III summarizes the reductions to state appropriations to this campus for Fiscal Years 2001 to 2003 and projects the current legislative proposal for Fiscal Year 2004. Of particular note, the student fee increases between FY02 and FY03 of $1,060 served to cover essential and unavoidable cost increases that exceeded the new fee revenue. As a result, the 11% reduction in state appropriation over these years all resulted in lost services to the campus and its students. The FY 2004 appropriation summary included in this table makes clear the impact of the current Ways and Means Budget proposal on our campus. The net reduction proposed here to our campus appears to be in the range of $33 million after likely adjustments in the legislative process. The additional revenue from the new fee increase for FY 2004 of $1,000 per student will cover essential and unavoidable cost increases, and the campus would need to absorb the projected $33 million legislative budget reduction by reducing campus services and programs.

Table IV summarizes the campus’ critical capital plan. Much of the structural deficit of this campus results from the state’s failure to fund capital improvement, renovation, and essential new construction at adequate levels. We can no longer postpone these issues as many rise to the level of threats to health and safety and others respond to facilities inadequate to serve the student instructional requirements or the research needs of the campus. Of the five-year $380 million capital plan that will address only the most pressing construction and renovation needs, leaving many other issues unresolved, new building and major construction account for 60% of the activity or $230 million. The funding of this expense through borrowing or internal reallocations constitutes a major portion of our structural deficit.

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