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E-mail message to the
Campus
February 3, 2006
REMARKS
AND ESSAYS
Colleagues,
I am writing to provide an update on the strategic budgeting process for
the upcoming fiscal year. That process began many months ago with
the establishment of overall priorities at the university level and, over
the ensuing months, has involved many people in dealing with very difficult
challenges. The process is now nearing closure, and so I want to report
on the recommendations that, earlier today, Cabinet recommended for
the campus to consider.
First, though, I do thank the many people who have contributed during
the process, developing possibilities, sharing deep concerns in the most
professional and informed ways, and helping look for alternatives.
The budget we need to finalize and adopt is for the second year of the
2005-07 biennium. Normally, that would be a routine matter because,
last spring, we worked out a two-year budget based upon, as we were required
to do, the Governor’s biennial budget proposal.
Finalizing the second-year budget turned out not to be routine for several
reasons:
• The Joint Finance Committee added, unexpectedly, significant additional
base budget cuts so late that the fiscal year to which the cuts applied
had already begun. The campus discussed and then decided to delay dealing
with that ongoing base-budget cut so that we could use the normal process
for preparing the year-two budget.
• As part of our routine consultative budget process, several cuts proposed
last year by Cabinet were postponed after receiving feedback from the
campus about the need to more thoroughly investigate and understand consequences.
Two were involved: cuts in graduate teaching positions and cuts
affecting the Institute for Learning Partnerships.
• Five recent developments, not anticipated a year ago, seriously affect
our budget for the upcoming fiscal year. They are:
—large chargeback from UW System for the “common systems”
software development that has proved significantly more costly than had
been originally projected;
—the need to maintain the most basic functions for the Weidner Center for
the Performing Arts;
—escalating liability insurance costs;
—a large chargeback from the Department of Administration (DOA) for its
overhead costs in providing us with what, to this point, look like ephemeral
opportunities for savings in such areas as travel and purchasing; and
—as energy prices soar, a utilities bill for next year likely to be much
larger than what DOA had budgeted.
Add these up and they total an unbudgeted impact on our ongoing year-two
budget of $1,579,540.
Preparation of the budget proposed for the coming fiscal year has followed
our established strategic
budgeting processes. An analysis
of the current environment guided preparation of area-by-area
strategic budgeting plans. These were presented to campus via
the Web and through a budget hearing process.
These bottom-up preparatory steps provided bases for Cabinet to form recommendations.
Cabinet brings together people from the many areas of our university,
administrative and governance, and I want to thank the entire Cabinet
for being truly dedicated to forming the best possible recommendations
under very difficult circumstances and for their conscientious involvement
throughout the process: Provost Hammersmith, Vice Chancellor Maki,
Dean Hughes, Dean Erickson, Dean Keihn, Assistant Chancellor Rodeheaver,
Assistant Chancellor Swan, UC Chair Dresdow, ASC Chair Arendt, and SGA
President Petrashek.
Cabinet, as it is required by our budget process to do, met today
and formed its recommendations. Advising you of those recommendations
is the reason for this message.
There are two tables that summarize the recommendations that Cabinet has
prepared for campus.
One table briefly explains proposed reductions and identifies major
implications and consequences. A second
table lists the numbers.
Having a copy of that second table in front of you might make it easier
to follow the rest of this message.
That second table, in a “FROM” column, lists proposed sources
of funds. A “FOR” column lists the liabilities to which
those funds would be reallocated. A “DIFFERENCE” column
shows the balance between where funds would come from and where they would
go.
The table is further divided into “Base Budget” rows and “One-Time”
rows. This is a critical distinction that must be understood in
order to be able to provide us with a helpful critique. So,
I will take a moment to offer further explanation.
A base budget need “For” funds has a permanent, ongoing impact
on our budget. It most often is a result of a decision coming to
us from Madison. It can also include “unfunded mandates”
that are expected to be ongoing like an insurance premium increase and
the DOA and UW System chargebacks mentioned earlier. A base budget source
for funds appears in the “From” column and is a permanent,
ongoing reduction – often reductions in or eliminations of FTE positions
since 90% of our base budget is allocated to people and the positions
they hold.
One-time needs appear in the “For” column and are short-term
initiatives, impacts of brief duration, or impacts that vary greatly from
one year to the next. The cost of the upcoming North Central Association
institutional accreditation would be an example of a one-time need.
One-time sources of funds appear in the “From” column and
are funds available in one year but not necessarily in following years.
Funds from a position being vacant for part of a year would be an example.
Here’s the most important concept: One-time funds cannot be
used, for very long anyway, to cover base budget needs. It would
be like paying for your groceries each month by drawing on savings instead
of using a paycheck. May work for a while. But, only awhile.
Savings can help get over difficult spots but, eventually, the monthly
paycheck and the monthly expenses have to match.
And, here’s the basic problem for us: Our needs for reallocated
funds to cover cuts and unfunded mandates are largely in the base budget;
our available sources to cover those liabilities are largely “one-time.”
Cabinet proposes a budget that, for next year, is balanced overall.
That we must do. In the Cabinet proposal, though, the campus would
be postponing about $893,000 of additional base cuts for one year so that
the usual, more deliberative and participatory process can unfold.
This also allows us time to more precisely estimate some of those unanticipated
chargebacks and such that, at this point, are very approximate.
You know far too well that the cuts proposed for next year come on top
of serious reductions every one of the past five years. That
history of past cuts is available here.
These prior cuts have severely reduced our ability to protect our
core responsibilities. This time, Cabinet has found such protection
to be impossible. Several examples illustrate:
— Reductions in teaching assistantships will significantly reduce
our ability to attract excellent graduate students, thereby really damaging
one of our strongest “flagship” academic offerings.
— Reductions in FTE in counseling come at precisely the same time
as we, along with the rest of the country, are seeing increasing numbers
of students presenting needs and issues related to mental health.
— Reductions in instructional support will reduce class sections
available to our students.
— Changing one of two remaining police officer positions to a security
officer means that, at some times (evenings for example) waits for the
kinds of services that require a police officer (rather than a security
officer) will be lengthened as the response would come from the Green
Bay Police.
Next comes your feedback on the Cabinet proposal. The Strategic
Budgeting Committee, including as it does representatives of the three
governance groups, is the designated nexus for receiving and considering
those campus ideas and concerns. The Strategic Budgeting Committee
then considers your contributions and ideas along with its own analyses.
I then meet with the Strategic Budgeting Committee to hear the improvements
and changes the SBC might recommend before we finalize and submit our
budget to UW System.
I do strongly encourage you to share your thoughts with the Strategic
Budgeting Committee. Members are: Dennis Lorenz, Faculty,
Chair; David Kieper, Academic Staff, Vice-chair; Judi Pietsch, Non-represented
classified staff; Nathan Petrashek, SGA President; Sue Hammersmith, Provost
and Vice Chancellor; Tom Maki, Vice Chancellor; Dean Rodeheaver, Assistant
Chancellor. I am sure the SBC will be announcing avenues for further
discussion and campus engagement.
We must submit our budget to UW System at the end of March. The
SBC should have your feedback over the next three to four weeks.
I sincerely appreciate the efforts you make to fully understand and then
to offer guidance on a university-wide challenge.
Thank you,
Bruce
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