Straight Talk from the President - March 31, 2009
Dear Colleagues,
Today the University of Louisiana System released information that indicated our FY2009-2010 state appropriation could be further reduced by $8,184,253, in addition to our mid-year cut of $2,379,468, for a total of $10,563,721 in reductions to our budget that began July 1, 2008. In addition, funding for mandatory cost increases of $1.4 million is not provided for FY2009-2010.
Attached is a letter from Commissioner of Higher Education Sally Clausen concerning budget priorities for higher education. Please notice the first paragraph of her letter. It is expected that there will be no relief in FY2010-2011, and when the stimulus money is withdrawn in FY2011-2012, we could face additional revenue shortfalls at the state level.
In his letter informing us of the budget reduction, UL System President Randy Moffett states:
“As we have mentioned previously, you can assume that the Legislature will approve higher education’s request to implement a 5% tuition increase effective fall 2009. At this time, do not plan for any additional fees. Also consider for planning purposes that the FY2009/2010 budget reductions will most likely be permanent and that recent discussions suggest that the FY2010/2011 budget will be stable.
Today’s realities reinforce the need to develop a budget that, above all else, supports and advances your institution's academic core. As some of you have mentioned, the magnitude of these planned reductions may result in a smaller, more focused academic core. Regardless, institutional accreditation must be ensured and the budget should provide a framework for growth and development of your mission critical areas. On their own, the elimination of travel, supplies, acquisitions, staff and instructors ‘across the board’ will likely not position us to advance our institutions in the future.”
Detailed budget forms describing ULM’s reductions are due the week of April 13, 2009.
Before I discuss the process we will follow to develop our budget, it is important that everyone understands the size of our General Operating Budget and which funds are truly discretionary. Our FY2008-2009 General Operating Budget was approximately $88 million. The General Operating Budget consists of both state appropriations and student tuition and fees. It includes all expenditures that support our mission including instructional activities and all support functions such as the Computer Center, Controller’s Office, Recruiting and Admissions, Scholarships, Student Services, and Physical Plant. It excludes auxiliary services such as Food Services, Residence Halls, and Bookstore.
Of the $88 million, approximately $12 million of our expenditures are fixed and cannot be reduced. These include Retiree Health insurance premiums, utilities costs, hardware and software maintenance, among others. This leaves us with approximately $76 million in discretionary funds, of which approximately $61 million is allocated for salaries and benefits. Assuming a stable enrollment, the 5% tuition increase will generate approximately $1.4 million, just enough to cover the mandated cost increases.
Therefore, we must plan for the inevitable, and we must plan in earnest. The vice presidents, deans, and the budget committees are already examining its budgets and developing preliminary recommendations. Provost Steve Richters appointed a representative committee of faculty who will join the deans and develop a set of priorities for the academic areas. The Faculty Senate Executive Committee will observe the deliberations of this committee. The first meeting is scheduled for today, March 31, and I expect that they will meet several times over the next two weeks.
Concurrently, Dave Nicklas, vice president for finance, will meet with the already established Administrative Budget Committee to examine and prioritize reductions in the administrative areas. The committee has been slightly enlarged to assure appropriate representation from all administrative areas. All of the vice presidents will present reduction plans for this committee to consider.
In addition, Faculty Senate President Dr. Donna Rhorer will host a Faculty Forum today in Stubbs 100 at 12:30 p.m. The forum is specifically for those “out of the box” thinkers. We hope that a committee will develop from this forum and provide innovative ideas.
We expect that the recommendations from all of these committees will be presented to the Strategic Resource Advisory Committee (SRAC) upon completion of their assignment. The SRAC will examine the committee’s recommendations from a total university perspective and develop a set of institutional priorities for budget reductions in the coming year. It is also our expectation that all of these committees will continue to work on budget plans until the budget document is completed sometime this summer.
If you are not involved in one of the committees mentioned above, and you have a reasonable suggestion, please remember that there is a “Budget Question” box on my “Straight Talk” page. All of your suggestions will be delivered to the appropriate committee upon receipt.
As we decide what the future of ULM will be, we must ensure continued accreditation and protect the academic integrity of our core educational mission, even though our academic footprint may be smaller. We must also continue to recruit students who are better prepared academically and assist their individual development to graduation.
I am still hopeful that the state’s decision makers will realize the damage that reductions of this nature will have on our state and make the legislative changes necessary to reverse the reductions. We will keep you informed as we move through the process. We will also keep you informed of the time and the message you will need to deliver to our legislative delegation.
The next few weeks and months will be difficult for all of us. It is important to remember that no one at ULM is responsible for the situation in which we and all other institutions in Louisiana find ourselves. The question is: will we let this setback define our institution, or will we emerge stronger and more focused, albeit smaller? I believe the latter to be true.
Sincerely,
James E. Cofer
President