UT Budget News

We now have a sense of how the university’s state funding will be affected by the State of Ohio’s latest budget bill.  In short, the university (not including the hospital) will lose approximately $8 million in state funding.  In addition, the hospital will lose about $1 million as a result of a new hospital assessment.  Lastly, low income students who qualify for Ohio College Opportunity Grants (OCOG) will lose about $4 million in state financial aid.

To offset a portion of this lost funding, the State of Ohio has authorized public universities to raise undergraduate tuition by 3.5% for both years of the biennium.  At UT, we will likely raise tuition this fall, but scholarship every dollar back to students.  Beginning in the spring, however, we will not scholarship the tuition increase back to students.  Raising tuition in this way allows the university to recoup approximately $2 million in lost state funding, and it preserves the university’s ability to raise tuition by the full compounded rate of 3.5% in the fall of 2010.

Beginning this week, the university will implement a process to adjust its operating budget to account for the loss of state funding.  The process will be guided by the following principles:

(1)  We will be transparent, seek the input of shared governance constituencies, and communicate as effectively as possible throughout the budget adjustment process.

(2)  We will value and respect every employee adversely affected by the budget adjustment, and attempt to retrain and place these employees into open positions that we must refill.

(3)  We will stay student-centered and patient-centered throughout the budget adjustment process.

(4)  We will stay strategically focused and committed to excellence as we continue to implement the university’s strategic plan and move the university toward a brighter future.

(5)  We will recognize the current economic challenges for what they are—an ongoing challenge to make the university of the future a leaner and more narrowly focused organization that continues to deliver academic quality in a dynamically changing world.  This is our new reality, and it isn’t a short-term challenge—it is here to stay.

The budget amendment process will be a three-step process.  First, the university will closely examine all non-revenue producing programs, non-essential support services, and all cost-saving and revenue-enhancing ideas offered by the university’s internal Finance and Strategy Committee (this committee has representatives from faculty senate, student government, deans, and administrators).  Second, the university will have informal conversations with the unions about voluntarily rescinding negotiated salary increases.  Third, if steps 1 and 2 are insufficient, the university will work with deans and vice presidents to reduce the workforce.

The university’s budget adjustment will be taken to the board of trustees at its August 24 Finance Committee meeting.

We will talk more about the budget adjustment process at Tuesday’s Town Hall meeting (which will be broadcast live on the Web at 11:00 a.m. Send questions to Townhallquestions@utoledo.edu).  In the meantime, I want to emphasize that throughout all these difficult financial challenges, the university continues to move forward, accomplish many great things, and work to create a brighter future for students, patients, faculty and staff.  I am honored to be a part of what we are doing here…improving the human condition one person at a time.

Scott L. Scarborough. Ph.D., CPA
Chief Financial Officer