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Reports on the Campus Budget
 

FY07 Budget Update

[Posted October 4, 2006]

This is an overview of the fiscal year 2007 campus budget. The financial tables have been updated to show the current year budget, prior year actuals, and a summary view of the capital plan. Additional tables have been included to further explain budget trends and challenges.

State Appropriation

State base support to the Amherst campus has increased by $21.6 million in FY07 to $206.9 million. The majority of this twelve percent increase—$15.2 million—will fund collective bargaining and other labor related costs and $6.4 million has been dedicated to the second year of Amherst 250.

The state appropriation has grown in recent years following several years of declining support—budget cuts totaled $48.6 million in FY03 and FY04. However, as the chart below shows, discretionary state support has declined sharply since FY01 and student fees have risen to make up for this loss. Fortunately, the state has funded the inflationary salary increases over the last several years.

Budget chart

Amherst 250

Amherst 250 is the campus initiative to restore faculty strength on the Amherst campus by increasing the number of tenure and tenure track faculty. The first allocation primarily targeted instructional gaps, adding 48 new faculty positions. This second allotment will fund approximately 25 to 30 new faculty slots. A greater portion of this allocation will go to capital improvements allowing the campus to borrow up to $50 million to upgrade academic and research buildings. The campus is committed to limiting student fee increases, thus unless the state provides more funding for infrastructure, a greater portion of the Amherst 250 money must be dedicated to academic building improvements in support of the existing and additional faculty.

Other Sources and Uses of General Funds Revenue

General Funds provide the primary source of revenue for the campusí base budget that sustains the faculty and staff and provides the primary support for teaching and some of the support for the institutionís research enterprise. In addition to the state appropriation, General Funds revenue sources include retained tuition from out-of-state students, central student fees, indirect cost recovery on grants and contracts, and short term interest income. Total non-state general funds net revenue is anticipated to rise by $15 million in FY07. This additional income will support the campus in many important ways:

  • Financial Aid: To ensure scholarships keep pace with fee increases, the budget includes an additional $2.1 million for financial aid. Athletics is receiving $150,000 to increase scholarship opportunities for female athletes.
  • Utilities: Energy costs are expected to grow $3.8 million in FY07. Auxiliary units will absorb $1 million of this increase and the General Fundsí budget $2.8 million. Costs will continue to escalate in FY08 when the new central heating plant opens and the campus converts from low cost coal to oil and natural gas. These costs will be partially offset, however, because most of the campusí electricity needs will be generated in the new plant.
  • Debt: Mandatory debt service payments will increase $1.6 million next year to $25 million to cover previously incurred debt obligations.
  • Academic Initiatives: The FY07 budget includes $410,000 to support the Learning Commons and $250,000 to promote instructional technology in the classrooms. Similar amounts were given for each of these initiatives in FY06.
  • Block Grants: Vice Chancellors have received a total of $1.3 million for pressing needs in their areas. These funds will help offset inflationary increases, support academic research, improve the daily maintenance of the campus, and add police.

Table I (PDF) presents the base budget by Major Budgetary Unit (MBU) from FY04 to FY07.

Auxiliary and Restricted Revenue

The first new residential housing in over thirty years opened on the north side of campus this fall. Revenue from these 864 new housing units is included in the Auxiliary Enterprises revenue line, which anticipates a seven percent increase in FY07. Direct spending on grants and contracts is anticipated to rise by five percent in FY07 with a corresponding increase in research overhead income. Private gift revenue is anticipated to increase by almost ten percent in FY07 and revenue from endowment income is up twenty-five percent over the previous year. Despite this hefty increase, endowment revenue still represents less than 1% of total revenue, which puts the Amherst campus far behind other major public research institutions. Table II (PDF) shows All Funds revenue from FY03 to FY07. Table III (PDF) shows All Funds spending by major budgetary units and for central campus costs in FY06.

Future Plans

The campus will continue to advocate for state funding to implement the Amherst 250 plan and to seek additional funding for capital improvements to address the campusí deferred maintenance backlog. Table IV (PDF) shows the funded capital plan from FY07-FY11. The campus also continues to consider plans to modestly increase its student population over the next five years with the majority of growth coming from out-of-state students.

Conclusion

The campus has established as its major goals improving student quality, restoring faculty strength, and expanding research. In order to do this the campus must continue to invest in facility infrastructure improvements. Fiscal year 2007 will show tangible progress toward these goals. The first professors funded from the FY06 Amherst 250 initiative have joined the faculty. New construction to support the sciences and studio arts is accelerating from design to construction and, as noted above, the first new residential housing since 1972 recently opened. Progress is occurring but much more needs to be done. Sustained support from the state and other campus constituents is required to continue the progress of restoring faculty numbers and renovating and renewing the physical plant.

Tables

All tables are PDF documents.

  • Table I: Base budget by Major Budgetary Unit from FY04 to FY07
  • Table II: All Funds revenue from FY03 to FY07
  • Table III: All Funds spending by major budgetary units and for central campus costs in FY06
  • Table IV: Funded capital plan from FY07-FY11