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Archive Notes - November 2008
The Budget Situation
This semester has been both challenging and exhilarating. We?ve observed an historic presidential election and watched the economy suffer badly. I know you have all been keeping tabs on the budget reports coming from Albany, and I would like to take this opportunity to address where things stand at the College.
SUNY Potsdam stands at a precarious point. The Governor and Legislature have required us to cut our budget by $2.5 million in the current fiscal year. We are managing these reductions out of our current financial plan by one time only measures in a manner that largely protects the core mission of the College. Unfortunately, the $2.5 million in current year reductions will become permanent in the 2009-2010 fiscal year, and we must identify what we can eliminate in order to live within our means. In addition, we are receiving word from Albany that additional actions being contemplated by the Governor and Legislature can impact our budget with an additional loss of $1.5 to $3 million. The Cabinet and I are doing a complete analysis of the operations of the College in order to approach these cuts on the basis of data, not impressions.
As I pointed out in my State of the College address, if we look at that portion of our budget represented by state support and tuition, what we call the operating budget, approximately 82% consists of salaries and wages paid to employees. Of our larger budget, called the financial plan, which includes fee accounts and remittances from the Foundation, salaries and wages constitute about 75%. It becomes painfully clear that to reduce our budget by something on the order of $2.5 to $6 million, we will have to reduce what we spend on salaries and wages. We are committed to maintaining the essential operations of the College as intact as we possibly can.
A tuition increase could help to ameliorate the devastation caused by the diminution of State support. The Board of Trustees has approved a $310 increase for the spring, and $620 for next year. While the Trustees have the legal authority to set tuition and to authorize the campuses to collect it, we may not spend the money without authority from the Legislature. Consequently, we await word from Albany as to how to proceed regarding tuition increases. What is crucial here is that given the reductions to our budget already in effect, and the likely reductions in the future, even this tuition increase will do little to resolve the structural deficit in which we find ourselves.
The Cabinet and I are looking at how we can reduce what we do in a manner that is both consistent with our deeply held common values of teaching, learning, and service to the student, while at the same time moving the College in the strategic direction outlined in the Bicentennial Plan. Our efforts need to be aimed at preserving our greatest resource: the faculty and staff of the College. As these plans become finalized, I will be sharing the broad outlines with the campus and more specific details with the Senate Business Affairs Committee. While discussions involving specific personnel must be confidential, be assured that we will weigh fairness to individuals and the long-term interests of the College carefully and thoroughly.
In light of all of this, I wish to announce that in order to more effectively deal with the critical budget situation, I am imposing a hiring freeze effectively immediately. All searches currently underway will be evaluated in light of the essential operations of the College to determine whether or not to proceed. Once every quarter, the Administrative Cabinet and I will evaluate the newly vacant positions to determine if and when the position will be filled.
In the next fiscal year, 2009-2010, OTPS budgets will be restrained. Although we have not yet determined the exact details of that restraint, one might anticipate restrictions to travel, professional development, and technology and equipment purchases. I ask departments and offices to begin to exercise restraint right now in order to better position themselves for reductions to come. Saving money in every way possible will put the campus in a better position to deal with the more critical situation that we know comes in the next fiscal and academic year. Funds not expended this year will roll over to assist departments and offices next year.
No one could have foreseen the extent of the impact of this financial crisis on our campus. Nonetheless, the manner in which we approach the problem will define us for the future. Just as in the Ice Storm of 1998 and other crises, the campus community acted decisively, so we should approach this fiscal crisis as an opportunity to work together to achieve our common goal of serving our students in the best way possible within the resources at hand. We need to understand that the changes that will come, though difficult, can make us a more purposeful and focused community.