Feature Story
Health Center Today, June 10, 2010
Board Passes Fiscal Year 2011 Budget
By Michael Kirk
The UConn Board of Trustees unanimously passed budgets for the University and the UConn Health Center for fiscal year 2011 during the June 10 budget workshop and board meeting. Fiscal year 2011 will begin on July 1, 2010.
The budget for Storrs-based programs and the regional campuses is $1.03 billion for FY11 and the Health Center’s budget is $787.3 million. The Health Center’s budget must also be approved by its Board of Directors when they meet on June 14.
Richard Gray, UConn’s vice president and chief financial officer, told trustees that while the FY11 budget was manageable, the FY12 budget is expected to be challenging. He suggested that, depending on the size of UConn’s state appropriation, the University may face a deficit as high as $50 million.
“We need to prepare for cuts in state support for the long term,” said Gray. “We’ll be doing some serious planning in the next two years. The state economic picture, from everything I’ve seen, is not getting any better.”
The University’s state support of $332 million for FY11 has remained roughly the same since fiscal year 2008, and represents 32 percent of UConn’s overall budget for FY11. However, the American Recovery and Reinvestment Act (ARRA) passed in 2009 mandated that states that accepted money could not cut education funding below that year’s levels. That protection will expire this year, meaning the state may reduce UConn’s appropriation in FY12, when Connecticut will likely face large budget deficits.
This year, the University will have to transfer $15 million of its fund balances to the state’s General Fund because of language in the state’s deficit reduction agreement enacted earlier this year. UConn will have given the state a total of $23 million from its fund balances over the past two years.
In anticipation of growing budget difficulties, the University has succeeded in cutting more than $7 million from its budget, including costs such as advertising, printing, postage, travel, and consulting fees. The CORE (Cost Operations and Revenue Efficiencies) task force continues to meet and recommend cuts and cost-saving measures. Wage and health benefit concessions by the faculty and staff unions at UConn were also an important factor in helping to control costs, Gray said, thanking the unions for their sacrifice.
In addition, UConn is also in the process of hiring an outside consulting firm to analyze the University’s structure and spending and make recommendations to generate savings and additional revenue.
Each of the two budgets passed Thursday represents an increase of 4.8 percent over 2010. This is due largely to costs associated with benefits, the hiring of faculty to meet student demand, and an increase in student financial aid.
In FY11, UConn will spend a total of $358.4 million on student financial aid, $112.8 million of which is funded by tuition – meaning that nearly 40 percent of tuition is dedicated to funding financial aid. (UConn budgeted $327.8 million for financial aid in FY10.) Roughly 77 percent of UConn students receive some form of aid, which increases to match any increases in student cost. The University also established a special financial aid fund to help students whose families faced unexpected severe financial hardship, such as the loss of a job, which would otherwise prevent the student from continuing at UConn.
Among universities in its peer group, UConn has the fourth lowest cost for both in-state and out-of-state students.
According to Provost Peter Nicholls, the University has restricted hiring in recent years, and due to the departure of faculty members through the state’s early retirement program, the total faculty count has dropped by about 60 from two years ago. Nicholls said he expects to begin between 60 and 70 tenured faculty searches in the fall. UConn’s strategic plans call for a focus on faculty hiring in areas that respond to student demand – having adequate course offerings helps students graduate in four years, saving them money – as well as to research opportunities that tie into economic development in the state.
Board Chair Larry McHugh noted that “a strong and vibrant UConn … [is] the fuel that’s going to move the state’s economy forward.”
“We are in a position – knock on wood – of continuing the momentum at this wonderful University,” said incoming interim President Philip E. Austin, who attended the meeting and will officially begin on June 11.
McHugh also said that the Board has asked various UConn stakeholders for recommendations as to who should make up the membership of the presidential search committee. He said these recommendations must be received by June 15.
“This will be a very, very inclusive search,” said McHugh, noting that he and others are “insistent that we have a diverse candidate pool as we move forward.”