The reduction targets Ohio University released Friday will allow the university to work with about $6 million more in state funding than expected.
These targets, based on an anticipated loss in state funding, outline the expected budget cuts for each of OU’s academic colleges, support units and general fee units. These units will be required to create specific scenarios by the end of this month regarding how they would work around the cuts.
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 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 fiscal year 2010 subsidy was deferred to the next fiscal year.
These combined factors reduced the state funding cuts OU is anticipating to about $5.33 million. Administrators originally believed the loss might exceed $11 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 state’s general revenue funding appropriation for OU in fiscal year 2011 is about $103.36 million, according to numbers released by Gov. John Kasich’s office. The projected state funding for OU for fiscal year 2012 is about $110.79 million.
Other components including 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.
However, 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.
To deal with the deficit, OU split its budget reduction targets between its academic colleges and support units such as the president and provost’s offices, Alden Library, the Office of University Advancement and the Office of Finance and Administration. Targets also were provided for Intercollegiate Athletics and the Division of Student Affairs.
“How (departments) end up perceiving reductions is totally up to them,” said John Day, associate provost for academic budget and planning. “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.
There will not be cuts for the Graduate College because of increased applications, according to a 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 Human Resources representatives about the possibility of buyouts, Day said.
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 those numbers will vary among units. 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.
There will be two budget forums this week that will allow anyone interested to discuss the proposed targets — one from 4 to 5:30 p.m. today and the other from 12 to 1:30 p.m. tomorrow. Both will be held in Walter Hall Rotunda.
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