President's Campus Communication 6/9/09
The Board of Trustees will meet this Friday to consider our fiscal year 2010 budget, and I would like to share some highlights from the proposed budget with you.
As you know, federal funding from the American Recovery and Reinvestment Act will backfill a $150-million reduction to the state higher education budget next fiscal year to keep funding at the original FY09 level. Gov. Ritter has said that Colorado will also use federal funding to hold the higher education budget constant in FY11. This means UNC will receive a combined $44 million in state and federal stimulus funding for each of the next two fiscal years, and we must plan for a pending cut of $8.9 million in FY12.
This brings even greater importance to the multi-year financial plan we began working on earlier this year and requires the immediate, purposeful development of revenue sources other than state funding. The proposed FY10 budget maximizes net revenues and manages expenditures in order to invest in University priorities. I strongly believe that investing strategically and responsibly in our priorities now will position us to make great strides forward as the economy recovers and in preparation for FY12.
The pricing strategy in the proposed budget is intended to optimize enrollment and ensure access while maximizing net revenue and supporting academic quality. Because this strategy introduces greater differentiation in pricing, we have considered how tuition and fee increases would affect students program-by-program. The proposed budget includes a significant investment in undergraduate and graduate financial aid to help offset the increases. Highlights include:
· Resident and nonresident undergraduate tuition increases of 9 percent, with institutional funds for undergraduate financial aid totaling $9.2 million;
· A new graduate tuition model to differentiate tuition by discipline, level of study, residency and competitive market, and to reinvest new tuition revenue in TA/GA stipends and in addressing graduate faculty workload;
· A new fee structure that provides greater transparency in charging;
· Room and board rates designed to offer students a choice of amenities and service levels, remain competitive, and provide financial assistance for students who meet need requirements.
The top priorities for investment in the proposed budget are student recruitment, student support and success, institutional image and academic quality. Proposed uses of one-time funding are intended to smooth out the effect of the decreased funding and prepare for decreased state funding in FY12. Investment highlights include:
· Coordinated marketing, image, and student recruitment and retention efforts totaling nearly $1.8 million;
· Investments in UNC employees including approximately $1 million to keep the employee contribution to benefits at the FY09 level, $532,000 for faculty promotions and professional development;
· Incentive funds for Extended Studies course development and for American Recovery and Reinvestment Act grant writing;
· $800,000 for small capital project requests and $400,000 toward annual replacement costs of instructional equipment;
· Creation of a position in the President’s Office to coordinate campus diversity efforts.
While the proposed budget includes intentional investments in employees, it does not include an across-the-board salary increase for any employee category. To create additional cost savings, we have offered eligible classified staff the Voluntary Separation Incentive Program (VSIP) discussed at the Board of Trustees meeting in May.
Even with the Board's approval of a FY10 budget, we have much work ahead of us. We will continue developing a five-year financial plan that includes revenue targets, pricing and discounting strategies, enrollment targets, and additional cost savings and reallocations that reflect our mission and institutional priorities. The initial version of the plan will be ready this fall, in time to share with state policy makers as we discuss funding and other higher education issues. Other projects for the coming year include developing the next iteration of the cost study to look at administrative costs and refine academic program costs, addressing internal charging, and further refining the budget process—all of which will help us see our way to agreed upon reallocations of base funding that reflect institutional priorities.
I appreciate the tremendous thought and effort that many people across campus have invested in helping develop next year's budget, and I look forward to continuing the work of financial planning together..