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FY06 Budget Update

[posted September 29, 2005]

Each year the Budget Office updates the financial tables to show the current year budget, the prior year actuals, and a summary view of the capital plan. Other charts and tables are included to illuminate budget trends and challenges. This narrative provides an overview of the fiscal year 2006 campus budget.


Revenue

The state legislature responded positively to the need to restore faculty strength on the Amherst campus by providing $7.5 million in incremental funding to hire as many as 55 new faculty. In addition, the state's allocation to Commonwealth College doubled in FY06 from $1.7 million to $3.4 million. Following several years of flat or declining state support - budget cuts totaled $48.6 million in FY03 and FY04 - this year's infusion combined with last year's increase of $7.3 million in state support and tuition retention growth brings the total two year increase to $16.4 million. This incremental support will need to be sustained to reach the campus' goal of adding 250 tenure track positions in the next three to five years.

As Chart I (below) shows despite the gains in the last two years and even with the new base money to fund collective bargaining agreements, the amount of state aid (and tuition retention) is lower in FY06 than it was in FY02.

Total non-state general funds revenue is expected to rise by $5.4 million in FY06. Tuition and mandatory fees, after growing by an average of 13 percent over the last two years in response to the drop in state support, increased by only 3 percent in FY06.

Interest from cash balances will generate $4.1 million in revenue in FY06. This is $860,000 higher than in FY05.

Direct spending on grants and contracts is anticipated to increase by five percent in FY06 with a corresponding rise in research overhead income. Private gift revenue is also expected to increase five percent. This source is expected to grow more rapidly in succeeding years when a new capital campaign commences. Auxiliary Enterprises revenue is projected to grow by three percent in FY06 while the growth in Student Fee- Based Activities will be less than two percent. Table I shows All Funds revenue from FY02 to FY06.

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