Budget issues discussedBy John Ashby
Spectrum Volume 17 Issue 28 - April 13, 1995
In a meeting called to discuss the university's $12-million budget deficit (please see Board of Visitors story above for details on the shortfall), President Paul Torgersen, Provost Peggy Meszaros, and Executive Vice President Minnis Ridenour provided information on the origins of the deficit and outlined strategy for reducing it.
In the Monday meeting, Torgersen asked and answered the main questions which have arisen regarding the deficit: "Is this a new problem? Is it a problem which has only been recognized recently, and if it has been recognized only recently, why is that? If it was recognized earlier, why didn't we deal with it or acknowledge it earlier? It's a very good question."
Torgersen said he and other administrators had spent much of the last General Assembly session in efforts to restore funding to the Cooperative Extension budget. "The question could logically be asked: Did we, to some extent, spend some chips in solving the Extension problem at the expense of the Instruction problem?" Torgersen then provided background on the enrollment and retention problems at the university, which, he said, extended back four or five years and correlated directly with reduced state support and increased tuition.
Torgersen said there were indications of a shortfall in the Instructional budget last fall, but the size of the amount involved was not apparent. "We never really sat down in November, December, January, and February and added up a worst-case scenario, which is what we're facing now."
Turning to the Extension budget issue, Torgersen said major budget reductions proposed for the service "would have devastated the Extension operation. We would have literally been putting people out on the streets en masse this July first." Torgersen said the effort to recapture funding for Extension was largely successful. To prevent an annual battle over Extension funding, Torgersen said he and Meszaros have named an Extension Commission to tailor the service more closely to the needs of the state's citizens and the requirements of the General Assembly.
Torgersen said he estimated that spending less time on recapturing Extension funding and more time on the Instructional budget could have made some difference, "but we would still have had a problem. We might have captured another million or two for our Instructional budget, but I don't know that for a fact." Torgersen said that if he could "set the clock back, I would do exactly the same thing I did. Extension is a very important part of this university."
Meszaros noted that each administrative and academic unit at the university is being asked to develop a strategy for dealing with the budget shortfall. She said it was important that "everyone leave here with a clear understanding of the direct relationship between the students we recruit, we retain, and graduate, and any subsequent revenue problems we may have relative to tuition."
Ridenour outlined measures taken since March 31 to reduce the shortfall. They include identifying cost savings in fixed-cost accounts, and increasing out-of-state undergraduate enrollment through privately funded merit-based scholarships, and other recruiting and marketing actions.
Proposed actions include converting the 1994-95 cash reversion into a permanent 3-percent reduction. Other possible actions under consideration include using a cash-reversion strategy combined with a plan to improve funding in 1996-97 and beyond. Specific actions to accomplish the improved funding could include a one-time reduction in internal equipment allocations to the provost and executive vice president, identification and restriction of a specific category of expenses such as travel or publications, temporary salary savings from vacated positions or holding positions vacant longer than planned, allocation of fringe benefits related to vacant positions, and closing the university over Christmas holidays. In response to questions regarding furloughs or layoffs, Meszaros said that every effort would be made to avoid them.
Ridenour said that the actions already taken should reduce the shortfall to aproximately $4 million, and that the possible solutions listed above should permit the university to address the remaining amount.
Asked about morale problems at the university, Meszaros stressed the importance of good morale, and emphasized the strengths of the institution and the community. "When compared with other universities, we are still miles ahead with our strengths" she said.