April 2011 Budget Update

·  In an era of instant communication and access to information, this is about as “hot off the press” as it can get – the FY12 state budget has been approved by the legislature and is awaiting the Governor’s signature.

·       Just this week, the Regents acted on the System allocation of state funds, and set tuition and fees for the upcoming academic year.  We have notified deans and vice presidents of their budget allocations so they can begin planning implementation – and making some difficult decisions.

·       More than anything I have seen, this slide tells the story of what has happened to the state portion of the UGA budget.  Our FY12 allocation is $5.7 million less than it was for FY98.  I think we all know that this is a markedly different university than it was 14 years ago – 5,000 more students of significantly higher academic quality, new facilities, an expanded international presence.

·       We enter FY12 with a $50 million hole in the budget resulting from a reduction in our base budget, the absence of federal stimulus funds and, for the first time ever, no growth in formula funding.  The cuts of the past few years continued and even increased into FY12.

·       We are not alone in this, of course.  Every state agency is facing continuing budget reductions, and the private sector is faring no better.  My purpose today is not to complain, but to inform you about the UGA budget and what we are doing to manage it.

·       Based on this information, deans and vice presidents have been notified that their budgets will be cut by an average of 2.2%.  It is important to note that the decisions on managing that cut are made by the deans and vice presidents, not me or Tim Burgess or Jere Morehead.  To use the prevailing phrase, it’s local control.

·       The deans and vice presidents are best positioned to know the day-to-day needs of their colleges, schools, and units.   They will work to help minimize the impact of cuts, just as they have been doing over the past several rounds of cuts·       Since there is in higher education a direct correlation between what we spend on personnel and the quality of the education our students receive, the Regents have taken a stand that tuition increases will partially offset the decline in state funding.  .

 ·       You see here that state funding for UGA peaked in FY09 and has dropped steeply since then; tuition has risen and now, when combined with revenue from the special institutional fee, is a larger portion of UGA's Resident Instruction budget than state funding.

·       I want to say again what I have said before – we have weathered the past few years with relatively little disruption to our primary mission through skilled management and a focus on strategic priorities.  Our budget leadership team has anticipated much of what has come to pass and planned accordingly.  We particularly wanted the units to manage the opening budget this fiscal year without the constant concern of additional cuts, and once the FY11 budget was implemented, we absorbed the subsequent reductions centrally.

·       Institutionally, our funding priorities this year have been hiring new tenure-track faculty as well as lecturers, graduate assistantships, travel funding through the Provost’s office, library resources and academic advising.

·       60 new tenure-track faculty positions have been approved.  28 have already been hired and 32 searches are underway to complete this critically important initiative, which I announced in the 2010 State of the University speech.

·       As I mentioned earlier, the regents approved a 3% tuition increase this week as well as a $250 increase in the special institutional fee.  Nobody likes tuition and fee increases, but this will help us maintain the quality we have built here during the past decade or so. 

 ·       We also have the changes to the HOPE Scholarship to implement and monitor.  The primary impact of those changes is that our students and their families will be paying more for a UGA education than in the past, and while UGA remains one of the nation’s best values in higher education, we know that some students will be negatively affected, and I regret that.

 ·       As in the past, we will apply tuition and special institutional fee revenue directly to strengthening the academic program of the University of Georgia.  We owe our students and the state no less than that.

·       Speaking of those students, we will enroll another highly qualified class in the fall.  I can’t give you any numbers right now because we’re at the midpoint between admissions letters and deposit payments, but I am confident that the class will be as academically prepared as its predecessors.

·       I want to leave time for questions, so I will conclude by saying this:  The decisions we have made about allocating resources have been made and will continue to be made based on strategic priorities developed with input from every unit.  We will strengthen the academic environment and we will continue to fulfill the mission of the university.