November 26, 2008 Budget Update
Colleagues:
I fear wearing out my welcome by sending you too many emails regarding budget. But, there have been further developments, and I want to bring these briefly to your attention.
We have been advised by the Office of Financial Management, that, for the fiscal year we are currently in, we must make a further reduction of $1.3M in our operating budget. That is on top of the $2M reduction for the current fiscal year that I reported to you a month or two ago. The total amount adds up to 4.9% of our state support or, adding in tuition, 2.6% of our current operating budget.
Reducing budgets for the year we are already in is always a challenge: contracts have been signed, students admitted, commitments made. The university, of course, has been preparing for such eventualities, beginning in August when the Governor advised steps including freezes in hiring, contracting, and travel, and our own efforts to maintain some budget flexibility have not been limited just to those considerations.
Those preparations not withstanding, reductions of the magnitude now being required will really hurt. We have, for example, been conducting searches hoping we could make selected contractual commitments once the current budget situation was clearer. The budget cut for the current year is now, apparently, certain, and so vice presidents will be examining every open position – whether or not a search has begun. In consultation with their constituent units, they are looking at a variety of options including restructuring, leaving positions open, and deferral of initiatives. Positions will be filled only where they are of highest priority and where alternative strategies have been documented that meet budget reduction and/or reallocation needs.
I do want to report that, given the very big and very real revenue shortfalls our state is facing, higher education was looking at much larger cuts for the current year, more than twice as large as those damaging cuts I am reporting to you today. When we explained the far greater damage that would be done were those initial scenarios carried forward, our leaders in Olympia were ready to listen. That I am not having to report far larger cuts for the current year is evidence that they are listening: to us, yes, but also to the many in the media and in the public who have been forcefully arguing that we – you all – are part of the solution and not part of the problem.
That bodes well as we prepare for the far greater challenge: the very large but speculative cuts that I reported on in my last message to you for the next biennium. Please understand, though, that reason can prevail and the political will built to find better paths, only if we are candid about the real damage that could be done. If you are like me, it hurts to have to talk about or read about what could happen to our university. To us. To our students. To our state. But, those facts must be shared precisely so that well-informed decision-making can effect better outcomes.
So, for that reason, patience is required. Patience is also required because it will be many months before we will know what our budget will be for the next biennium. We will not be simply waiting. Draft principles, processes, and analyses are on the web for you to improve. Many of you have contributed through the budget discussion forums or through other means. If you have not done so, please do get involved. Wednesday, our Planning & Budgeting Office will take the comments that have been offered and form a next draft in preparation for the upcoming Board of Trustees meeting.
I began by worrying about sending you too many budget updates. Let me end by saying that I very much look forward to times ahead – not immediately but absolutely certainly coming – when there will be much brighter budget prospects for us to share. And, that will be because this State does value all that we, together, achieve in forging brighter futures.
Bruce