Ohio University released budget reduction targets yesterday based on an anticipated loss in state funding that allows the university to work with about $6 million more than expected.
These targets outline the anticipated budget cuts for each of OU's academic colleges, support units and general fee units. These units will now be required to create specific scenarios regarding how they would work around the cuts they are being asked to absorb.
The reduction targets were released several days later than planned because of additional information the school recently received from the Ohio Board of Regents, said Becky Watts, chief of staff to President Roderick McDavis. The information suggested the reduction in OU's budget would be less than OU had originally believed.
Although an announcement in October suggested that OU might not receive its last subsidy payment for this year — creating a larger gap, the most recent information indicated there would not be a lapse in the subsidy for fiscal year 2011. In addition, $5.3 million of OU's 2010 subsidy was deferred to fiscal year 2011.
These combined factors reduced the state funding cuts OU is planning for to about $5.33 million. Administrators originally believed the loss might exceed $11 million.
General revenue funding appropriated to OU by the state for fiscal year 2011 is about $103.36 million, according to numbers released by Gov. John Kasich's office last week. The projected state funding for OU for fiscal year 2012 is about $110.79 million.
Other components involving utilities, health care, faculty raises and employee compensation add an additional $6.27 million to the gap, bringing OU's estimated total deficit to about $11.6 million.
OU expects to bring in an additional $1.96 million with enrollment increases and programs offered at its regional campuses.
Pitted against the estimated total deficit, these additional funds bring OU's anticipated budget gap to about $9.64 million.
Although the reduction in state funding is less than expected, another challenge is inherent in the lack of the one-time federal stimulus money OU received last year, McDavis said.
“I'd love to have every nickel we can get,” he said. “But the fact of the matter is $18 million of our budget this year was stimulus money, and that money is not going to be here (next year).”
The targets are split up between OU's academic colleges, as well as the president's and provost's offices, the library, Advancement and the vice president of Finance and Administration. Targets were also provided for Intercollegiate Athletics and the Division of Student Affairs.
The total budget reduction for the academic colleges is $6.19 million, a 4.47 percent decrease from their total budgets. The college of Arts and Sciences received the largest decrease of $2.65 million. However, the Russ College of Engineering and Technology received the largest percentage cut; its decrease of $1.1 million translates to 7.74 percent of its total budget.
Support units received a total cut of $2.87 million. The Office of University Advancement took the largest decline in funding with 24.11 percent of its budget, or $1.2 million, being cut.
Intercollegiate Athletics will see a $295,000 cut — 3.42 percent of its budget, while the Division of Student Affairs must cut $135,000, or 2.63 percent, of its budget.
There will not be cuts for the Graduate College because of increased applications, according to the statement from Executive Vice President and Provost Pam Benoit and Vice President for Finance and Administration Stephen Golding.
Factored into the reduction targets is the potential for buyouts. About 80 faculty and 90 staff members have signed up for sessions to speak with HR representatives about the possibility of buyouts, said John Day, associate provost for academic budget and planning.
Of the employees who take the buyout option, about 60 percent of the positions will need to be hired back at about 75 percent of the salary, Day said, adding that these numbers will vary among units.
Planning units will be asked to present the scenarios addressing their cuts at the end of this month.
“How (departments) end up perceiving reductions is totally up to them,” Day said. “It's not the same across the board. There are different abilities at different units to absorb cuts at different levels, and that's what (these targets are) trying to get at.”
The budget planning so far has not taken into account the possibility of a tuition increase, Day said. However, he estimated a 3.5 percent tuition increase would bring in an additional $5.6 million.
“We have to decide if the adjustments the departments want are worth (a tuition increase),” Day said.
Additional layoffs within units might also be a reality, Benoit said.
“Units will go back and look at their cuts, look at their priorities,” she said. “(Layoffs) may be part of their scenarios.”
She added that administrators are also considering room and board increases and will take those to the Board of Trustees for discussion.
The administration has also asked the Office of Student Affairs to absorb its raises by looking at fundraising, administrative restructuring and travel needs, Benoit said.
There will be two budget forums next week that will allow anyone interested to discuss the proposed targets — one from 4 to 5:30 p.m. Monday and the other from 12 to 1:30 p.m. Tuesday. Both will be held in Walter Hall Rotunda.
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