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University administrators have made maintaining the campus's academic mission
the top priority as they determine what budget cuts will be made to address a
shortfall of more than $11 million for the 1999-2000 fiscal year.
As the Gazette went to press, University administrators were still working to
determine the exact amount of the shortfall and on a list detailing how much
each school, department, division or unit would have to cut its 1999-2000
budget.
No final decisions have been made regarding possible layoffs, and the
University is working hard to avoid having to lay off any employees, said
Laurie Charest, associate vice chancellor for human resources.
The shortfall was created by a number of factors, the largest being what is
known as a "27th payroll." This extra payroll is a peculiarity of the calendar
that stems from the standard 26 payrolls accounting for only 364 days in a
year. The extra day (or days, counting leap years) add up to an extra pay
period that occurs approximately every 11 years.
This means an extra payroll totaling $4.9 million will occur in the 1999-2000
budget, said James Ramsey, vice chancellor for finance and administration. Add
a number of unfunded commitments and a tough year for the state budget and the
University has a shortfall.
"The University did not plan as it should have for the extra payroll in
addition to making too many spending commitments," Ramsey said. "This supports
the point that Chancellor Hooker has been making, that we need to set spending
priorities."
The 27th payroll is not a factor at other campuses that switched to issuing
paychecks twice a month rather than every two weeks, because that method
accounts for every day. The University is studying whether to shift to such a
system.
Determining the best and fairest way to make cuts is not as simple as it might
seem. Even though the University's overall budget is more than $1 billion, only
a relatively small part of that can be considered for cuts.
That's because many sources that provide the funding include limitations on
how the money can be spent.
For example, the University received more than $300 million in research
grants. Each grant comes with detailed rules on how the money can be spent,
including what can be spent to hire research assistants, for equipment, for
overhead and other costs. In short, the money can only be spent on the research
the grant was meant to support.
Another example is money for buildings or other capital expenses. State law
requires that money supplied by the state for capital expenses be used only for
capital costs such as construction or renovations. Therefore the University
can't simply forgo construction projects worth $11 million to make up the
budget shortfall.
Likewise, private gifts usually go to a specific purpose designated by the
donor and therefore can't be used to address such a shortfall. Of the $132
million raised last year, $126 million was restricted, according to Matt Kupec,
vice chancellor for University advancement.
Even the vacant positions on campus can't necessarily be used to save money.
Many vacancies are for jobs tied to research grants, so the money can only go
to that position. In other cases, the money can be applied to the shortfall
only if the vacant position is eliminated, Charest said.
University administrators have worked for weeks to create a set of cuts that
was fair, caused as little budgetary pain as possible and focused on
maintaining the University's academic mission, according to Ramsey and Edward
F. "Ned" Brooks, an associate provost.
With that priority in mind, administrators decided that 60 percent of the
needed cuts would come from administrative budgets and 40 percent from academic
budgets, Brooks said.
On the academic affairs side, the staff in the provost's office is finishing a
list outlining the amount each school or division will have to cut. The dean or
director of each unit will then determine how to cut the prescribed amount.
That's because deans and directors know the priorities of their unit and thus
are better informed on where cuts should be made.
"I feel like it's best to have the people who know where the possibilities are
to make those decisions," Provost Richard J. Richardson said. "I think it would
be terribly ill advised of us to tell them what to do."
Ramsey said that the administrative units were following a similar strategy
and his staff was finalizing the list of needed cuts as the Gazette went to
press.
Another priority for budget makers is decreasing the University's use of
nonrecurring funds (that is, funds that are provided on a year-to-year rather
than permanent basis) for permanent positions and programs.
Brooks said the University will move permanent expenses to permanent funding
sources over the next four years.
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