Dear Students, Faculty and Staff,
As we continue our work at Ohio University to focus our time, attention and financial resources on our top strategic priorities, we also are paying very close attention to external factors that affect us. Ongoing changes in the State budget have a profound effect on Ohio University. State support represents approximately one-third of the University's revenues in any given year. To that end, my message today provides an update on a number of developments at the State level.
Last month, the Ohio Supreme Court ruled that Ohio voters can be allowed to vote on the question of allowing slot machines at Ohio racetracks. This decision of the Court has budget implications for the State, delaying or even closing the door on the possibility of $844 million in projected slot machine revenues, which were built into the State of Ohio's biennial budget to support Kindergarten through 12th grade (K-12) education in the state. The original plan called for the slot machines to be in place and producing revenues beginning May 2010. With a voter referendum delayed until November 2010 at the earliest, the planned revenues for K-12 must come from another source. As a result, Governor Strickland announced last week his proposal to suspend the 4.2 percent cut in income taxes that took effect January 1, 2009. Suspending the income tax reduction would fill the $844 million hole in the K-12 budget originally targeted for funding from slot machine revenues.
At this point you may be asking yourself what a hole in the state's K-12 budget has to do with Ohio University. That remains an open question. The Governor and the General Assembly have a number of options open to them. The first option, outlined above, is to fill the hole in the K-12 budget with income tax revenues.
Another option would be to let the income tax reduction continue as planned, re-open the biennial budget and move funds from other areas of the state budget to the K-12 area of the budget. If the state leaders choose this option, the higher education budget could possibly be one area that would be targeted for reductions to fill the K-12 funding gap. The impact this would have on higher education would be extremely negative, as higher education is already facing cuts in Fiscal Year (FY) 2011. We know for certain that Ohio University's Athens Campus will receive $10.5 million less in State Share of Instruction (SSI) in FY 2011 than we are targeted to receive in FY 2010. Further cuts to the higher ed budget would make the cuts even deeper for Ohio University in FY 2011.
The challenging economic times that our state, region, nation and the world have faced over the last 18 months have created an environment of very difficult decisions for policymakers and government leaders. I pledge to keep you informed of the many external and internal factors affecting Ohio University. If you have questions, please contact me or my Chief of Staff Becky Watts at wattsr@ohio.edu.
I also encourage you to stay connected with the work of the University Budget Planning Council and with your representatives on Student, Graduate Student, Faculty, Administrative, or Classified Senate.
In this time of uncertainty, I encourage you to ask questions, seek reliable information and communicate openly and often with your colleagues and with me.
Cordially,
Roderick J. McDavis
President
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