Dear UB Community,
Once again, I write to update our university community regarding the state of our budget. As you all know, the 2009-2010 NYS budget has been debated in Albany for a number of months. In the past week or so, we have been gaining additional clarity regarding the state budget and how the state’s fiscal challenges will continue to affect the financial health of our university.
Let me take a moment to recap the significant impact that New York State and the nation’s financial crisis has had on our university. In April 2008, the Governor’s office announced a $7 million budget reduction. Shortly thereafter, our university received an additional budgetary reduction of $14 million. Within the course of last fiscal year, our university’s budget was reduced by 10.7 percent, equaling a $21 million permanent state tax budget reduction.
In the wake of this unprecedented budgetary situation, President Simpson and I, along with our university’s senior leadership, initiated a participatory process to address this challenge. As you know, I convened a University-Wide Strategic Financial Management Advisory Group whose charge was to define and recommend core principles and actions to inform a university strategic financial plan. We also met with many internal constituent groups across the university, including the Faculty Senate Executive and Budget Priorities committees and the Professional Staff Senate, and sought feedback from all members of the university community seeking to offer their views. As an outcome of all these efforts, there was overwhelming consensus that decisions should be guided by the following principles:
With these core principles guiding our thinking, we developed a strategic financial plan with four parallel courses of action to help us manage this unprecedented financial situation, including: the generation of new revenues; the judicious management of university expenses; strategic budget reductions; and the prudent utilization of central fund reserves. At that time, we also implemented a hiring and purchasing moratorium which still remains in effect.
While acknowledging that these budget reductions have been challenging for some units and quite difficult for others to endure, we have been able to manage. We have been able to maintain the integrity of our education and research mission.
Today, New York State’s economy remains in crisis. And to the detriment of our university and region, state budgetary decisions are made seemingly with a present-day orientation and appear to ignore the inherent value of the university—specifically in terms of the translational value of our education and research mission on regional and state economies. At the present moment, we face a third round of budget cuts in less than one year. In addition to the $21 million in permanent cuts in fiscal year 2008-09, we are currently projecting another $7 to $10 million permanent reduction in our state operating budget. Moreover, our endowment has taken heavy losses: in addition to the above cuts we are anticipating an $8 million loss in centrally-held spendable endowment funds managed over the next two to three years, assuming financial markets do not worsen over that period. These endowment funds provide funding for many scholarship and educational programs across our university, and the loss of these funds in the near term will have significant and recurring impact upon our academic programs and our students’ educational experience. Fortunately, our capital funds have been re-appropriated allowing us to move forward on planned capital construction projects, but the significant loss of state operating funds will be a further challenge as we operate and populate new buildings and programs.
In Albany, we continue to advocate strongly for the restoration of our budget and for our UB2020 legislation. On campus, we are assessing the impact of additional budget cuts on university operations (both academic and academic support services) and devising specific approaches to manage this unparalleled budgetary challenge.
President Simpson and I, along with senior leadership and our University-Wide Strategic Financial Management Advisory Group, are discussing—using our defined financial management principles as a guide—how to manage the next round of budget cuts. As a preliminary outcome of these discussions, we have agreed that our attention must be wide-ranging in scope and, at the same time, we must continue to preserve our core academic mission. With this wide scope, we anticipate a review of whether student enrollment should be increased or reduced, a review of all extraneous expenses, and a review of all administrative and service operations throughout our university. Our concern is that we will have to go further, go beyond what these measures can provide in terms of cost savings and review all programs and activities that are ancillary to our core academic mission. As we do this, we may also have to reduce our workforce through, in part, natural attrition, retirement, and a continued moratorium on hiring.
These are very challenging times and, as a university, we have the responsibility to make some very difficult decisions. We can not lament failures in character or in systems that led us to where we are today. We can only commit to making the right choices for our university and to providing our students with the best education so the failures of today do not resurface tomorrow.
As I have written before, it is impossible to predict the length and depth of this economic crisis. Even with this uncertainty, we are working to the best of our ability to manage this hardship and take control of our university’s financial destiny. Our UB2020 ambition to be a premier public research university is a long-term goal in which every day together we seek to make progress. While the challenges in front of us are clear, we must remain steadfast in the pursuit of our university vision despite the economic vicissitudes of the day.
As always, I thank you for your engagement, your support, and your commitment to our university and to our shared vision of enduring academic excellence.
Sincerely,
Satish K. Tripathi
Provost and Executive Vice President for Academic Affairs
Last Modified: Tuesday November 03 2009