June 29, 2007
By Sally Linder
Ohio University's Board of Trustees today approved the 2007-08 budget. The final version was more favorable than earlier projections, thanks to the state appropriation bill handed down this week to the governor and modest enrollment gains.
The budget totals $350.5 million for the Athens campus, which is 3.5 percent higher than 2006-07.
"Our final budget is strong. It preserves important priorities and supports our academic mission," Vice President for Finance and Administration Bill Decatur said. "The many hours of hard work, debate and consensus-building that went into the budget have paid off."
The state budget will provide Ohio University with a 2 percent increase in State Investment in Instruction funds (or $2.6 million) and an additional $123,000 in Success Challenge funds for fiscal year 2008, providing the university does not raise undergraduate tuition or general fees. In fiscal 2009, the state budget calls for a 10 percent increase in State Investment in Instruction funds.
To offset the loss of tuition revenue in fiscal 2008, the state has agreed to add tuition replacement funding totaling $4.3 million for Ohio University.
Along with its allocations, the state is mandating a 1 percent efficiency requirement for fiscal 2008 and a 3 percent requirement in fiscal 2009. Although the mandate is not yet clearly defined, discussions indicate it will translate to about $1.7 million in efficiencies this coming year and a heftier $5.1 million in fiscal 2009.
"The new state budget is a decisive step forward for Ohio. It represents a clear consensus among state leaders that strategic investment in higher education is key to expanding economic opportunity and driving economic development in Ohio," Decatur told the trustees.
The fiscal 2008 budget that the trustees approved includes:
- a 3 percent raise or merit raise pool for all employees
- $2 million this year to cover information technology needs, with most of the funds being targeted for additional staffing
- $1.2 million in additional Group I faculty compensation, the first of five yearly planned increases of the same amount to make salaries more competitive and support faculty retention and recruitment efforts
- $500,000 to fully fund minimum wage increases for student workers
- a $681,000 enrollment reserve as a hedge against any enrollment and general fee shortfall
- $1 million to strengthen the university's balance sheet
- A $900,000 reserve to fund strategic academic priorities
- No increase in tuition, including graduate tuition (with the exception of the College of Osteopathic Medicine)
The approved fiscal 2008 budget is based on a number of assumptions, the most significant being essentially flat enrollment compared to last year. Current projections suggest the mix will include somewhat higher numbers of out-of-state undergraduate and total graduate students, however, yielding about $500,000 more revenue than this fiscal year.
Earlier this year, the administration had projected a $4.3 million shortfall in the current budget year that would carry over to fiscal 2008. The gap was a result of fewer-than-expected transfer students and reduced student retention. Enrollment picked up over the winter and spring quarters, however, reducing the gap to $3.1 million.
The fiscal 2008 budget experienced typical cost pressures from increases in health care (running in the past five years at about twice inflation), utilities, Worker's Compensation and Public Employees Retirement System rates. Employees will take on some additional cost sharing for health care in the coming year, and although the university will still experience budget increases for health care, they are expected to be held to less than $1 million.
The board also approved an increase of 6 percent for 2007-08 room and board. Despite the increase, rates will remain among the lowest in the state, Decatur said. The fees are necessary to implement planned residence hall renovations.
The total fiscal 2008 budget is $540.1 million. That includes the Athens campus, Ohio University College of Osteopathic Medicine at $23 million (a 5.2 percent increase) and Outreach and Regional Campuses at $66.2 million (a 2.6 percent increase).
The budget is approved but not final until Gov. Ted Strickland signs the appropriation bill, which a conference committee passed Tuesday and sent to the governor for his signature.