FY05 Budget Update
[posted February 4, 2005]
Each year the campus posts to its Web site an update on its budget. In difficult times, these updates speak to issues of reduction and reallocation, in normal years they update the campus on adjustments and changes. This is a normal year. State support in FY05 reflects level support from last year as well as the annualization of the salary increases received part way through last year. This now represents the fulfillment of most of the past collective bargaining agreements. Income in FY05 further reflects the annualization of significant increases to a range of student charges including the curriculum fee. The other main sources of income appear stable relative to the campus five-year budget plan. The planned campus construction activity continues, and 69 new tenure track faculty have joined the UMass Amherst campus this year to begin replacing the loss through early retirement of 141 faculty members over the last three years. While this is good news relative to the state budget difficulties of the past few years, the campus must continue to focus on expanding its revenue to ensure adequate support for the quality teaching and research that defines our competitive context.
The series of tables and charts that accompany this narrative present the campus’ financial profile. These data reflect both an All Funds and a General Funds perspective on the campus’ budget.
All Funds show the different sources of income UMass Amherst receives including state appropriation, tuition and fee income, auxiliary enterprises, grants and contracts, and restricted gifts.
General Funds are a subset of All Funds data and include primarily state appropriation, retained tuition from out-of-state students, and central student fees. General Funds provide the primary source of revenue for the campus’ base budget that sustains the faculty and staff and provides the primary support for teaching and some of the support for the institution’s research enterprise.
Chart I compares General Funds revenue and expenditure data in FY2003 and FY2005. These two years provide a clear view of the impact of the dramatic state budget cuts and increases in student fees implemented throughout FY2004 and the readjustments resulting from the appropriation of state funds to pay for most of the collective bargaining agreements. FY2003 was the last fiscal year before the dramatic cuts in state support and FY2005—the current fiscal year—reflects full funding of the collective bargaining agreements and the total impact of the rise in student fees.
The bar chart shows that central fee income, primarily the curriculum fee, replaced a significant portion of the loss in state appropriation. It further shows that while spending increased from FY03 to FY05 despite the drop in state support, the additional income generated from raising student fees has primarily funded campus facility priorities as detailed in the capital plan, rising utility costs, and the increased cost of financial aid scholarships and curriculum fee waivers resulting from student fee increases. The campus allocated $3.0 million of incremental funding to hire new faculty and plans to allocate another $1.5 million in FY06 to allow for replacement of faculty lost through the retirement process. Table I shows that same data in tabular form.