USF prepares for budget cuts

After a year of massive budget cuts pillaged the universitys cash reserves, USF President Judy Genshaft had more somber news to deliver at the Board of Trustees (BOT) meeting last week.

The $36 million taken by the legislature was meant to be a one-time (cut), she said. One time, they said. One time. Its just going to be this one time. Ha ha. This isnt just one year that weve had budget reductions (not) two years, three years, four years, five years but a $36 million reduction out of our recurring budget is enormous.

But while USF Director of Governmental Affairs Mark Walsh said no iron-clad directives have yet been given from the state legislature as to what next years budget will look like, he said USF must take steps to protect itself against the possibility of being socked with the same level of cuts next year.

Walsh said USF and other Florida universities will present to the Board of Governors (BOG), which oversees the states public universities, later this week to voice their legislative requests, which will then be sent to the Governors office, before it issues its budget in January.

USF Provost Ralph Wilcox said in an interview with The Oracle it is important for the university to prepare.

As it turned out, as the budgets became clearer, it became quite clear that reductions were being made to the recurring base budget institutions, he said. Of course, were all hoping for the restoration of those funds in the next legislative session, but theres no certainty associated with that. Were planning for a recurring deduction that will take effect July 1, 2013. If that doesnt happen and were prepared for it, then there are several things that could happen. If we receive that $36 million back, we can reallocate it to the areas we took from, but I think thats unlikely.

In the meantime, USF has implemented a spending and hiring freeze.

All funds must be dedicated to our core mission and to our strategic priorities, Genshaft wrote in an email to all faculty and staff on Aug. 31. In order to do that, the vice presidents will determine the implementation of the freeze within their divisions. Simply put: All hires and new expenditures must be approved under the freeze procedures and justified as essential strategic investments supporting our mission.

But the freezes wont be absolute.

We will have to make some hires during this time, Genshaft said at the meeting. For example, one of the folks said to us, Well, we have a turnover of some custodians every week, maybe 20 people, and infrastructure is very important, so well have some modified hiring to be done. But we need to be very careful and track everybody and every spending (decision) going on.

Wilcox said while the freezes will have no practical implication now, its important for the university to prepare.

We have already approved faculty hiring plans for the coming year, so those arent affected, he said. We will continue to search for faculty and we will honor the commitments made to new deans who came in this year, some of whom came in with conditions that allowed them to hire new faculty. At this moment in time, it has practically no effect at all. The challenge will come if throughout the year the freeze continues and we lose some faculty members, then well have vacant positions we arent able to hire on. Theres an awful lot of uncertainty at the moment.

USFs United Faculty of Florida Faculty spokesman Greg McColm said in an email to The Oracle that some faculty are concerned about existing limited resources.

Since there is no credibility in the legislatures assurance that the money will reappear next year, President Genshaft may have had little choice in imposing the hiring and spending freeze, he said. But the freeze will strain our already overstretched faculty, professionals, staff and other employees as they try to maintain high standards in the face of legislative indifference to the future of Florida.

The university has yet to decide how the $36 million has already been cut will be absorbed.

Genshaft said administrators have been meeting to discuss plans and will soon consult with the Faculty Senate to discuss how to implement the cuts.

At last weeks BOT meeting, trustee member Stephen Mitchell asked for the BOG response to the $36 million cuts being recurring, and Genshaft said the Board was planning to request a 15 percent base tuition increase from the legislature equal to about $29 million in projected revenue next year.

BOG Director of External Relations Diane McCain said to The Oracle while she hadnt listened to the BOT meeting herself, she was surprised to hear the remarks, as she said it was too premature for the BOG to make any decisions for the next legislative session. BOG members, she said, will listen to requests from each university on Wednesday and Thursday this week before making any requests to the state.

The State University System took a $300 million cut to higher education last year, and while the Associated Press reported last week the state expected to see less drastic budget cuts across the board, Genshaft said the university system may still be at risk based on a case now being addressed by the Florida Supreme Court in relation to a 3 percent reduction in take-home benefits for state employees.

One of the concerns brought up to us presidents was that the Legislature had banked on that benefits would be decreased to all employees, and we dont know what the decision is, she said. That money is spent, so if the court is to turn the case around and the state needs to come up with that extra million dollars, the likelihood of getting the $300 million across higher ed is at risk.

But BOT Chairman John Ramil said the chance of seeing the money return is low, and USF must protect itself.

The concerning thing to us was that for those of us who live in the world where you cant print money and you cant just go borrow from other countries, we express concern about drawing down what were reasonable improving cash reserves, and we were told, Oh, dont worry about it. Its just a one-time, he said. Now its not a one-time … (and) last time, we were looking around for help from others singing the same song, but we didnt see a whole lot of it.

Wilcox said as the University works to fill the budget gaps, it will make sure faculty are involved in the process and students are well aware.

All we know is that we have a $36 million hole, and we do that either through reducing services or expenditures, plug in the hole with reserves or generate
revenue from somewhere else, he said. Were looking at all three scenarios, and at the end of the day it will be a combination. We will be reducing some services, using some reserves and of course, utilizing some of the tuition differential revenues to offset some of those losses.