Please find below my remarks to the Faculty Senate at its meeting on Friday, January 22, 2010.
While I am focusing the bulk of my remarks today on budget issues, I do want to share a message from the Chancellor, who is attending an Arkansas Presidents and Chancellors meeting, regarding the draft IRB Policies and Procedures.
Status of IRB Policies and Procedures
Chancellor Anderson has asked Matt McCoy in the UA System General Counselās office to review the UALR draft document against the backdrop of compliance with federal regulations and in comparison with similar documents at other institutions both in Arkansas and outside of state. Discussions between Joel and Matt are ongoing. That document and the comments on it ā both in support and in disagreement ā are on the Chancellorās radar screen.
Budget Cuts Earlier This Fiscal Year
UALR received some one-time funding in the budget processes of Spring 2009. President Sugg instructed the various UA campuses to set aside one-time funding in a reserve in anticipation that we might very well encounter budget cuts during the course of the current fiscal year. In fact, we encountered two budget cuts in the second half of 2009. Because of the reserve fund and increased enrollment in the fall, UALR was able to accommodate the budget cuts without any impact on budgets around the campus.
Budget Cut Announced January 11
UALRās share of the $106M budget cut which Governor Beebe announced on January 11 is $1.415M. UALRās reserve fund designed to take care of budget cuts was depleted in October 2009, so the Chancellor instituted two freezes: hiring and purchasing.
The hiring freeze impacts both this current year (in the Academic Affairs division, these are largely non-faculty positions) and next year (both faculty and non-faculty positions).
The purchasing freeze impacts non-personnel budgets. As Chancellor Anderson detailed in his January 13 memo, the purchasing freeze is a temporary freeze through February 4 and is designed to give the institution the time to review our current budget situation and accomplish the immediate budget cut thoughtfully and with as great a degree of flexibility as possible.
The various divisions of the institution are pursuing their allocated cuts which are proportional to the percentage of the overall institutional budget the various divisions supervise.
The Academic Affairs percentage of the budget cut is $1,085,822. Here is how we are accommodating this figure:
1) We are looking first at all non-faculty personnel vacancies to see if these can be frozen for the rest of this fiscal year. Salary savings from these positions can be applied toward the cut. While there will probably be a few exceptions for positions in particularly critical areas, most of these will be frozen. Were state revenue to turn around in the coming months resulting in our not having to take a cut in next yearās budget, those positions would be available to be filled with the beginning of the next fiscal year. This process just claims salary savings from non-faculty personnel vacancies for the rest of the current fiscal year.
2) The second target for budget cuts is the provostās instructional reserve budget. This is the account in my office where faculty salary savings accumulate. Thus, if a faculty member resigns and the position is not filled, the money accumulates in this account. Note: this is not a carry-forward account; that is, I lose any unspent funds in this account at the end of the fiscal year (June 30). However, this funding source is reserved exclusively for instructional purposes and is my only source of funding for emergency hire situations (faculty member has to be replaced because of catastrophic illness, for example), suddenly needed extra classes (as, for example, has occurred because of our remarkable surge in demand for calculus classes), and additional funding to supplement college summer budgets to accommodate summer enrollment demand. I am collecting the best estimates possible on summer school needs for this summer to ensure that I have enough to accommodate summer enrollment demand, a process which will help me know how much of the provostās instructional reserve I can contribute to the budget cut.
3) The rest of the budget cut will have to come from non-personnel budgets (maintenance budgets, predominately) around the campus. I will distribute proportionate cuts to the deans who will work with their colleges to accommodate these one-time cuts.
After we have identified the sources for UALRās budget cut, we will remove the purchasing freeze and continue with business as usual.
Next Yearās Budget
The budget picture for next year is unclear. The Governorās budget presented on January 11 does call for a cut. In addition to these expected cuts, we are also aware of some known additional costs which are headed our way ā increases in utility costs (ca. $500,000 by current estimates) and in health care insurance (ca. $600,000 if UALR covers the cost of the employeesā portion of the increase as it has done in recent years). There are additional unknowns: state revenues could be better or worse than forecast; the General Assembly will soon convene for its first-ever fiscal legislative session and it is unclear what the implications of such a session might be; student enrollment for next year is unknown (though maintaining and even growing the UALR student population will be a top priority); and we do not know whether or not a modest tuition increase is likely, taking into consideration, on one hand, the trying circumstances in which many Arkansas families find themselves and, on the other, the anticipated budget cuts faced by universities who are experiencing significant enrollment increases.
The picture is unclear. It is my hope that we will get some guidance soon on how much UALR might expect in cuts for next year so that we might engage in a thoughtful planning process. However, until we get such guidance we are on hold and the hiring freeze, with very few exceptions, will be in place.
We do anticipate that we will have to cut our budget next year; we do not yet have a sense by how much. It will be imperative that we cut strategically and respond to the resulting situation creatively to ensure that we maintain our institutionās momentum.
In light of the anticipated budget cut, we will not host our regular budget hearings which tend to focus largely on how to spend anticipated new monies. The chancellor will, however, orchestrate budget discussions to maintain the transparency we value at UALR and to glean input and feedback as we target strategic decision-making.
I am grateful for the patience, goodwill, and understanding demonstrated by our university community as we face challenging times. We will get through this tough period, emerging as an even stronger, more focused institution of higher education.
Provost and Vice Chancellor for Academic Affairs