By Katie Quaranta and Casey S. Elliott
Although a potential state deficit of $640 million for this fiscal year is worse than Ohio University officials expected, they say university planning is on the right track.
Gov. Ted Strickland did not go into specifics about cuts during a press conference Monday, but he said tough times are likely to continue for the next several years. Even if all state agencies cut their budgets 10 percent next year, Ohio still would face a $4.7 billion deficit, he said. Without a 10 percent cut, the deficit could balloon to $7.3 billion.
"This is not an effort to alarm or exaggerate," Strickland said. "We're trying to be as candid and transparent as we can be."
Strickland and other governors met today with President-Elect Barack Obama to push for financial aid to help states cope with the current budget difficulties, which economists announced Monday officially qualify as a recession.
As the state weighs how to address the fiscal 2009 deficit, Ohio University Senior Vice President for Finance and Administration Bill Decatur said it isn't likely that higher education will be held harmless as it has been in two prior rounds of budget cuts totaling $1.27 billion. The university, he added, must plan accordingly.
Decatur said that although this year's contingency plans appear to be on target, the university likely will need to consider more aggressive plans for the upcoming biennium in light of Monday's news from the governor.
The university's contingency plans for the current fiscal year anticipate up to a 5 percent reduction in state funding. For fiscal year 2010, planning scenarios are based on assumptions of flat state funding, a 5 percent reduction and a 10 percent reduction.
Decatur said planning units should receive official reduction targets for fiscal 2010 by the end of this week. In addition, the Budget Planning Council (BPC) is looking for potential savings within the university's major expense categories, and the deans and executive staff are exploring more ways to promote organizational efficiencies, identify cost savings and enhance revenue.
"I think we are on the right path with everything we are doing," Decatur said. "The processes that are under way should put us in a position to begin making decisions about the fiscal 2010 budget in February."
By that time the planning units, BPC and deans and executive staff will have investigated various options, and university officials will know more about the state budget situation and fee caps. The governor will present his proposed budget in January.
"In light of these extremely difficult state and national economic conditions, Ohio University must prepare for the realities we will face in the short term and in the coming years," President Roderick J. McDavis said. "The good work our university community has done to create Vision OHIO will guide our universitywide planning efforts in these very challenging times."
Although the last two rounds of state budget cuts left Ohio University largely untouched, it did have to make some adjustments, trimming about $845,000 from several line-item programs. The Voinovich School of Leadership and Public Affairs and the College of Osteopathic Medicine were most affected by the reductions.
Governors from throughout the country met with Obama today to discuss the national economy's impact on their states. They pressed for more than $100 billion in aid to states, which could help mitigate the severity of the budget troubles.
"Now is the time for all Ohioans to join together, in an extraordinary partnership, to meet the challenges before us," Strickland said. "There will be shared sacrifice, but we also recognize that historic opportunities lie on the other side of our current economic challenges."
Read a news release* from the governor's office on the budget situation and a letter in which Strickland asks the president-elect to work with Congress to provide aid to the states.
To watch a video of the governor's news conference, visit the Ohio Channel Media Center* and click on "Nation's Economic Impact on the Ohio Budget."
* Please note, following these links will take you outside Ohio University's Web site.