Toward A Sustainable Budget
Presentation to the President's Extended Cabinet
By Martha Saunders, President
August 31, 2009
Our Challenge
We are aiming to reduce our current year budget by approximately $12 million dollars by 2011.
Simply put, there are two very real dollar amounts within USM's current (FY '10) budget that we must plan will not exist next fiscal year (1) the $7.3 million in stimulus money and the $4.5 million mid-year appropriation cut which we believe is imminent. This makes a total of $11.8 million.
We also believe that we will be receiving another $3.7 million in "one-time" stimulus money either this year or next. We also know there will be a similar amount of fixed cost increases next fiscal year. Applying the $3.7 million to those fixed costs with the knowledge that it is also one-time money gives us an extra year to grow the revenue by $3.7 million. Without this extra year, I fully believe we'd be looking at a $15.5 million (7.3 + 4.5 + 3.7) cut for FY '11.
I do NOT believe that preparing for a $12 million cut for 2011 is the worst case scenario, but I do believe it is the most reasonable case given what we know now.
Also, we MUST understand that it could get worse. I am very confident we are not overreacting. This is a very real crisis, and it's upon us.
The question before us today is not whether we will soon have a budget crisis, but whether we should prepare for it now ...or wait. I have asked for a proactive plan. If fortune smiles on us and revenues remain stable, we may choose not to implement some portions of the plan. The other option is to hide our heads in the sand.
Guiding Principle
As we approach solutions, we are reminded that the university is better served by targeted solutions than by diluting the educational experience for all. In other words, across the board cuts are not acceptable options because they cripple our high quality productive programs.
Process
We began preparing for a possible crisis last January when the provost organized the Academic Planning Group. Every effort was made to include representation from throughout the campus. The group has worked diligently and has made thoughtful recommendations to the executive cabinet. They deserve our thanks for taking on a painful task.
Proposed Budget Cuts for FY 2011
|
Total FY 2010 E&G Budget |
% of total |
Proposed cuts for FY '11 |
% of total |
Academic/Academic Support |
$ 123,998,403 |
68.26 |
$ 7,250,000 |
64.43 |
Institutional Scholarships |
13,022,262 |
7.17 |
|
0.00 |
Administrative/Institutional Support |
44,623,993 |
24.57 |
4,001,882 |
35.57 |
Total E&G budget |
$ 181,644,658 |
100.00 |
$ 11,251,882 |
100.00 |
Discussion
We are still looking for additional efficiencies and are in the discussion stage for most of the recommended changes. If you are not clear about any proposed reductions in your unit, please talk with your supervisor at once.
We are open to alternate solutions. Final decisions will be made on the basis of reasoned arguments, not public relations tactics.
Next Steps
I am asking you, the leadership of our campus, to talk with your constituents about the realities of a sustainable budget. By that I mean, a budget that serves us in the bad times and the good.
I ask that you advise your colleagues to keep their eyes on the prize. Every vital sign of this university is healthy! Enrollment is up. We have improved retention this year. We have a healthy research enterprise and we have increased private giving substantially. Every department on this campus is capable of success - IF - that's what you want.
If, however, it is more fun to complain about our troubles - go ahead. If you would prefer to do nothing but wring your hands, I guess you can do that too - for a while.
Know this. Economies ebb and flow. We will get through this. The money will flow again to Southern Miss because we are going to work hard to make that happen. But rest assured, for as long as I am president here, it will flow to the creative, the bold, the determined...and the brave.
Conclusion
They say, "You become what you believe."
I believe that the same spirit that enabled Southern Miss to evolve from the state's first teachers' college to a premier research university is still with us.
I believe we are a healthy university.
I plan to keep it that way.