By Casey S. Elliott and Katie Quaranta
State budget cuts, which Gov. Ted Strickland announced today, will affect a majority of agencies but preserve important funding guarantees to universities. As a result, Ohio University will retain most of its fiscal 2009 allotments from the state.
"This is a very difficult day for the state, but we are grateful that the governor has remained true to his commitment to higher education. This is welcome news for Ohio University and all public institutions of higher education in our state," President Roderick J. McDavis said. "By holding higher education largely harmless from today's state budget cuts, Ohio University can continue to focus on strengthening our academic enterprise and building our future."
Strickland announced that the state will adjust its budget by $540 million for the remainder of the fiscal year. This is on top of a $733 million budget reduction announced in January, bringing the total adjustments to $1.27 billion. The latest news will result in $198 million less being spent by state agencies through June 30, 2009. The remaining $342 million shortfall will be made up through a variety of cash management actions.
"I believe this decision is the best way forward, given the challenging economic environment we face in the months ahead," Strickland said. "We are making tough decisions while also protecting the core priorities such as investing in education (including K-12), children's health care and tax reform that I believe will help revitalize our economy in the long run."
Strickland stressed that Board of Regents line items for the Ohio College Opportunity Grant, Ohio Instructional Grant, State Investment in Instruction and capital components would not be impacted, citing their importance to the state's economy.
The budget adjustment includes a 4.75 percent across-the-board cut to state agencies, but holds harmless key programs. It also protects previously passed tax reform, the newly established homestead tax cut, children's health care expansions, the tuition freeze for state colleges and universities, and increased funding for local school districts.
"I believe we must educate our children," Strickland said. "Education remains a priority. Healthcare of our children remains a priority. … We have to invest in those things that are important to Ohio's future."
Strickland reiterated more than once his commitment to universities. "I made a promise to higher education when I asked for a tuition freeze. I wanted to make sure that I honored those commitments."
McDavis called that decision key for Ohio University students and their families, who can count on tuition rates remaining unchanged this year.
Strickland also said he would not seek authority from the Legislature to use the state's rainy day fund, citing his concern for potential financial bumps in the road in the future.
"I think it's safe to say it's raining now, but I fear there's a larger storm looming ahead," he said.
This prediction does not come as a surprise to McDavis, who said the university's planning has been realistic.
"The budget readjustments will mean some belt-tightening on our part, and we'll continue our specific contingency strategies in case that storm lets loose. We're already working on mapping out a stronger future," he said. "Fortunately, this university came together last year to develop very specific Vision Ohio goals that will help us not only strengthen our academics but also be in a stronger financial position going forward.
"This year, you'll be hearing about 'Vision in Action' initiatives, some of which are already getting under way, that address the bold moves we have to make in this economy," McDavis added.
Senior Vice President for Finance and Administration Bill Decatur is pleased that the reductions minimize the impact on general operations.
"The governor did everything to preserve core funds," Decatur said. "The only reductions that affect our general operations are the reductions to the Success Challenge program on the Athens campus and the Access Challenge program on our regional campuses. The remaining funds are restricted accounts set up for specific projects."
Programs at Ohio University that are supported by line items not exempt from the cuts include:
- Area Health Education Centers Program Support, College of Osteopathic Medicine
- OU-COM funding that encourages study in the areas of family practice, geriatric medicine and primary care
- Appalachian New Economy Partnership, Voinovich School of Leadership and Public Affairs
- Rural University Projects, a subsidy that supports a number of ILGARD initiatives
- Teacher improvement initiatives
- Outreach and regional campuses' Jobs Challenge funding, which provide job training for local businesses and industries
- Library depositories
The cuts add up to just more than $845,000.
Several other programs also may be affected, pending decisions by the agencies that support them. These include:
- WOUB (from e-Tech Ohio)
- Choose Ohio First Scholarships
- Ohio Research Scholars
- Student support services
- Police and fire protection
State department heads are expected to get their plans on how to achieve the budget cuts to Strickland by Sept. 22. The adjustments will be implemented Oct. 1, Strickland said.
McDavis said he conveyed his appreciation to the governor for the decision to largely spare higher education and keep his promise to Ohio's students and their families.
"Gov. Strickland and other state leaders realize the role colleges and universities play in the state's economy, and this decision underscores their commitment," McDavis said. "I encourage others who recognize the impact of this decision to convey that to the governor."
Click here to access a feedback form available on the governor's Web site.
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