By Katie Quaranta
Gov. Ted Strickland's proposed budget for the upcoming biennium was less dire for higher education than Ohio University officials had expected, but challenges still remain. The institution must continue to look for ways to economize, officials said, although the worst-case contingency plans most likely won't become necessary.
The governor released his budget proposal Monday.
For fiscal 2010, the first year of the biennium beginning July 1, Strickland called for an overall 6 percent increase in state share of instruction (SSI) funds if four-year universities agree not to increase tuition next year. In the second year of the biennium, state funds would rise an additional 0.8 percent, but universities could increase tuition by up to 3.5 percent. SSI and all other state subsidies currently account for about 25 percent of Ohio University's budget.
The governor's budget proposal asks regional campuses and community colleges to freeze tuition for the next two years. Information regarding funding for regional campuses is expected within the next few weeks.
In addition, universities must find efficiency savings totaling 3 percent of their budgets each year of the biennium.
President Roderick J. McDavis applauded the governor's efforts to keep college affordable.
"Students should hear loud and clear that Gov. Strickland is committed to college affordability and has 'walked the walk' of his talk by proposing a third consecutive year of holding tuition and fees steady for the undergraduate population," he said.
The increase in SSI funds, however, is not a guaranteed amount because each institution's allotment will be based on an outcomes-based funding formula that measures affordability and access, among other things. In addition, it is unlikely the budget will remain the same as it makes its way through the legislature or if the economy continues to decline.
"As we have seen this past 15 months, when state revenues fail to meet projections, the governor has to make mid-year revisions," McDavis said. "We must plan carefully and thoughtfully so that we are prepared to respond in a way that keeps our academic mission as a top priority if such cuts should occur."
It's also important to note that the state's budget reduces overall spending on higher education by 1 percent, officials said. That means that funding for other higher education programs, including some at Ohio University, will be reduced.
The Voinovich School of Leadership and Public Affairs and the College of Osteopathic Medicine were among the affected programs. These units already saw cuts during the last three rounds of state budget reductions. Budget planners still are in the process of determining if other university programs may be affected by cuts to specific line items in the proposed budget.
The governor's budget now moves to the state legislature, which will develop a compromise proposal that Strickland must sign into law by June 30.
Line items affected
Under the budget proposal, the Voinovich School and several of its programs would sustain $1.04 million in cuts because of line-item reductions or eliminations:
- General funding for the school would be reduced to 2007 levels, or $336,082, for each of the next two years. That represents a 44 percent reduction from already-reduced fiscal 2009 allocations.
- The Appalachian New Economy Partnership, which supports business development in the region. In fiscal 2010, its budget would fall 20 percent, to $844,634, and remain at that level in fiscal 2011.
- Funding for the Rural University Projects program, which provides technical and planning assistance for local governments and non-profit organizations, would be eliminated from the state budget under Strickland's proposal. This fiscal year, the program received $570,700.
The total cuts are in addition to $118,000 in reductions sustained in September and $136,000 in December.
Although Voinovich School Director Mark Weinberg acknowledged the proposed cuts would present challenges, he said the school remains committed to engaging students in applied learning and providing service throughout the region.
"We're going to do everything we can to maintain our role as an economic leader for the region and the state," he said. "We're going to continue our collaboration inside the university in areas such as energy and the environment and faculty engagement, and externally in areas such as research and educational access."
Under the governor's budget proposal, OU-COM would sustain 6 percent reductions to its clinical teaching subsidy as well as to line items that encourage study in the areas of family practice, geriatric medicine and primary care. It also would sustain a 22.6 percent cut to the Area Health Education Centers Program Support line item, which helps fund community health initiatives. The cuts total $355,000.
The college's budget also was reduced by $269,000 in September and by $311,000 in December.
Still, Dean Jack Brose said college officials were thankful for the governor's investment in higher education. They had feared that the cuts would be much worse, he said.
"Our priority is always our educational program. That we will protect as much as we possibly can. Our second priority is research and community service," Brose said. "We're going to continue to streamline our operations ... to try to protect those programs as much as we can."
Budget work to continue
Ohio University's Budget Planning Council (BPC) will continue to look at major expenditure and revenue categories to develop recommendations for the coming biennium. Even before the state announced a projected shortfall of $7.3 billion in the next biennium, planning units were instructed to plan for three scenarios that anticipated university deficits of $20 million, $30 million and $40 million.
As a result of the governor's proposed budget, McDavis said the $30 million and $40 million scenarios will not likely become a reality, providing higher education remains a priority as the budget works it way through the House and Senate.
The university is still under budget pressure from an uncertain economy, rising costs and investment losses, however, and will continue aggressive planning in order to meet whatever budget reductions become necessary.
Working groups composed of executive staff members and academic deans have been examining functions university-wide for potential savings and revenue generation. That work will help the university identify reductions necessary to balance its fiscal 2010 budget. Other groups, such as the Health Benefits Committee, are compiling recommendations for savings, giving a menu of options for meeting a range of reductions. And planning units will need to continue taking a hard look at how they can trim their bottom lines.
According to McDavis, the steps are paramount so that the university can continue to focus on its core mission of undergraduate education, even during difficult economic times.
"The governor called for shared sacrifices and tough choices, and we still feel that is ahead for us," he said.
Updates on an action plan related to identify efficiencies from the groups will be presented in the next few weeks, he added.
McDavis acknowledged that higher education fared much better under Strickland's budget than many state agencies, making it all the more important for universities to conserve resources and exercise fiscal responsibility.
"It is important to note that while the governor's proposal is good news for universities, that support from the governor comes at a high cost to other state agencies, including those that provide human services throughout the state," McDavis said. "In Southeastern Ohio, where these services meet a very critical need, the cuts to state-provided services will be deeply felt by families throughout our region."