President's Campus Communication 8/3/09

Dear Colleagues,

As you may have seen in the news recently, the growing hole in Colorado’s budget means we are likely to see significant reductions in state funding for higher education sooner than initially expected. This makes the planning we have committed to doing at UNC this year even more crucial. 

Colorado is currently using federal stimulus money to backfill a $150-million reduction in the state higher education budget, and we expect even deeper cuts in FY10, which will also be backfilled with stimulus dollars. The state is in the process of requesting a waiver of the federal government’s requirement that states hold education funding to at least the 2005-06 level in order to receive American Recovery and Reinvestment Act funds.

What this means to UNC is that the combined $44 million in state and federal stimulus funding we were allocated for FY10 is now unlikely to hold steady until FY12. The decrease we anticipated seeing in FY12 probably will take place at least in part in FY11 and be more than the previously expected $8.9 million.

This brings greater urgency to the financial planning we will take up fall semester. It is absolutely critical for our long-term financial security that we 1) continue to invest in areas that are core to our mission, including marketing, recruitment and retention, 2) cut expenses where it makes sense, and 3) reallocate funds to University priorities. Your efforts were crucial in developing the FY10 budget, and we will continue to engage the entire University community in making the right decisions about investments, cost reductions and reallocations as we move forward with a multi-year plan.

While we do not expect the state to make drastic rescissions to higher education funding in the current fiscal year, we are prepared for such an emergency. We have re-examined the FY10 budget approved by our Board of Trustees to ensure it includes sufficient flexibility in the timing of planned expenditures. In addition, we have identified and set aside one-time funds that could be used as a temporary cushion. I am confident that all of our campus budget managers will also be working to find additional efficiencies.

Whenever budget issues arise, there is a concern about how it affects employees. There has been much discussion about mandatory furloughs of state employees, but higher education is explicitly exempted from that requirement. If the situation continues as we anticipate we do not intend to use furloughs at UNC. We have worked hard to not take drastic measures, while at the same time we have held both salaries and insurance costs at current levels. We will continue working to protect our employees.

Such a significant drop in state funding for higher education will accelerate change in what it means to be a public university in the state of Colorado in the years to come. I believe it is also an opportunity for us to work together to make UNC a stronger institution.

Sincerely,

Kay Norton