As we approach the midpoint of the fiscal year, I write to update you on the state of our finances.
The last appropriation we received, approved June 30 by the governor, was a half-year, $48 million budget intended for FY17, but we instead had to apply it to FY16 expenditures. In the interim, we have relied upon money from tuition, fees and other sources to pay our bills.
We held out hope that the state might provide some relief. In fact, the Senate leadership proposed a bipartisan budget and regulatory reform bills that would have fully funded higher education. While this plan would have been a positive step forward, the General Assembly failed to approve the proposal during its two-day lame duck session last week.
We believe that the Senate and House will take up these bills in the coming weeks. However, to address our lost revenue from last year and to prepare for the fiscal uncertainties for the rest of the current fiscal year, we must now intensify the actions we have already taken that have resulted in approximately $50 million in savings over the past two fiscal years.
I have directed division vice presidents and deans across campus to put into effect budget-reduction plans that they devised last fall, which I discussed at our September Town Hall meeting. These are not across-the-board cuts; rather they are based on the individual circumstances of each unit and reflect university priorities. The reductions total an additional $11 million on an annualized basis. They are designed to preserve our core educational mission and to continue our ability to deliver on our promise of helping our students succeed in their careers and in their lives.
As has been the case over the last two fiscal years, most of the savings will result from filling only strategically critical job openings, implementing efficiencies, holding the line on salaries, deferring maintenance and reducing spending on all non-critical services and supplies.
I again want to provide reassurance to our students that we will continue to credit their MAP grants as we anticipate the state will fund that obligation this spring as it did last year. We also expect that cost savings, increased revenues from other sources and, ultimately, a budget fix from Springfield will enable us to fill the gaps.
I am aware that these uncertain times create stress for the entire university community. Please know that the leadership team and I appreciate all of your work and sacrifice. We are doing all that we can to work with legislators and the governor’s office to craft a long-term funding plan for higher education that restores stability.
More than ever before, our future depends on our ability to generate additional revenue from sources such as enrollment rather than state appropriations. We must operate in a new way – and in a more sustainable way – and we must align our resources accordingly. I am confident that we can achieve success in this reorientation, and I am optimistic that with this as our focus we will begin to see encouraging results this fall.