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Ongoing Budget Planning

April 13, 2009

To:  Campus Community
RE:  Ongoing Budget Planning

While there has been much uncertainty about the budgets for higher education here in Massachusetts and around the country, there is also the certainty that here on campus we must move forward on preparing for the new academic year. Unfortunately, in these nearly unprecedented economic difficulties, we must do this without complete information about what the future may hold.

Today, I want to share with you the budget plan for the next fiscal year we have developed in consultation with academic and non-academic leadership on campus. This plan, built over the last several months using information we had, represents our attempt to deal with financial difficulties and uncertainties, while also preparing our institution for the future when the economy rebounds. The budget will streamline administrative costs and focus as many resources as possible on faculty hiring and retention going forward, and includes creation of a funding source for 45 faculty hires over the next few years using reallocated funds created through reorganization and administrative cuts.

All told, this budget cuts more than $10 million in spending, but will not have wide-scale layoffs as we had originally feared our budget deficit would require. The federal government, through the guidelines for use of the stimulus/stabilization funds for higher education, has been very clear that this support is designed to save and create jobs. In this budget plan we do exactly that. We are also directed to invest this temporary funding to avoid what the federal guidelines call the “funding cliff” that will come when this funding ends in two years. If we were to avoid reductions now, then the institution could face destabilizing and even disastrous budget cuts in two years. To avoid taking this step, therefore, would be not only imprudent, but irresponsible.

As you know, however, the picture on what will happen in the economy is far from clear, and this budget is contingent on the final approval of the state budget and the allocation of federal stimulus money to the campus. The Massachusetts House of Representatives budget plan is due this week, and the Senate is not expected to complete its budget deliberations until the summer in advance of the July 1 start to the next fiscal year. I shared with the vice chancellors their budget reduction totals late last week to allow as much time for the planning process as possible. I would like to thank the faculty and staff, as well as the deans and department heads, for their hard work in preparing the recommendations this budget plan is based on.

Here are some of the key points in this budget plan:

• The plan avoids the wide-spread layoffs that we had anticipated based on earlier budget projections of a $46 million shortfall.
• The budget continues to focus as much as possible on academic priorities. Cuts to the academic schools and colleges will be limited to an average of 2.3 percent while non-academic units will be cut, on average, at a 4 percent rate.
• In total, the plan has approximately $10 million in cuts, with more than $5 million coming from cuts in administrative and support services.
• The budget plan seeks to preserve instructional capacity in the short term by planning to hire back many of the lecturers and teaching assistants who have been notified they might not be rehired.
• Even as we deal with cuts, we will remain committed to supporting the strongest faculty possible. To that end, this budget plan creates a fund that we will use to hire 45 faculty positions over the next few years. This funding was generated through administrative reorganization in the central administration and in the schools and colleges. The 45 positions will be tied to the implementation of a new strategic hiring process designed to link future hiring of new faculty with areas of excellence and need, and to coordinate the faculty positions in the planning of the offices of research, facilities and development.

We’ve heard from many deans, department heads and non-academic unit leaders asking for guidance and direction on where we believe the budget situation will end up, and this budget plan provides that direction to allow managers on campus to make critical decisions now. In the next few weeks, we will be working with all academic and administrative areas to finalize this budget in advance of the July 1 start and to make any adjustments as necessary based on economic or political changes. I will plan to keep the entire campus community posted on developments in these areas. While no one can at present make predictions with absolute certainty about what will unfold over the next few months, our need to plan for the next fiscal year does require us to proceed.

As we have said in the past, depending on the amount of federal stimulus funding we receive, we will be rebating a portion of the $1,500 fee increase to students. The amount of the rebate will be determined in consultation with the UMass President’s Office, the other campuses in the UMass system and the Board of Trustees.

In the last few months here at UMass Amherst, we’ve aggressively pursued federal support, advocated on Beacon Hill and communicated directly with our alumni and parents of students, urging their active support. We have stood with faculty, staff and students in arguing forcefully for support of UMass Amherst as a wise investment for the Commonwealth, and will continue to do so.

Chancellor Robert C. Holub