State legislators last month approved a 1999-2001 operating budget that includes more than $650 million for UConn and its Health Center - more than Governor Rowland recommended but less than UConn officials sought.

The package of state support for Storrs and the regional campuses, primarily for salaries and fringe benefits, totals about $240 million in 1999-2000, including a one-time payment of more than $8 million to pay for a calendar oddity that creates 27 pay periods in the year rather than the usual 26. The first year also includes about $2.5 million that will allow UConn to freeze tuition rates for the second consecutive year, and another $2.5 million to help end a long-standing legal battle with the original developers of the planned technology park.

During the second year, UConn will receive more than $241 million which, after subtracting the one-time payments included in 1999-2000, reflects an increase of nearly $13 million compared to the first year of the biennium.

While pleased that legislators awarded UConn an amount that nearly reflects current services, officials are concerned that few strategic initiatives received the funding requested.

"We received funding close to our base, but the strategic initiatives were not funded adequately, which presents a difficult set of challenges," President Philip E. Austin told the Board of Trustees during a budget workshop June 25. Some of those challenges, interim Chancellor Fred Maryanski said, would be met through reallocations in the budget.

The Health Center, which received about $92 million in each of the two years, including the one-time payment for the extra pay period, received no support for strategic initiatives and, like most teaching hospitals in the nation, faces serious financial challenges. Health Center officials did receive an estimated $6 million annual benefit, however, through legislation exempting Dempsey Hospital from the state's gross receipts tax and the sales tax on patient services.

Still, Health Center administrators are being squeezed from all sides - cuts in federal Medicare reimbursement rates, less state support than requested, and the costs of supporting academic programs through earnings - said Les Cutler, chancellor and provost for health affairs.

Complicating the matter, Dempsey Hospital is the nation's smallest teaching hospital, and savings have already been accrued in so many areas that state officials recently said it was the most efficient hospital in Connecticut, leaving few additional areas for savings.

In Storrs, the pressure is less severe, yet Maryanski faces the challenge of funding key strategic initiatives with less state support than hoped for. Budget officials sought $2.6 million for program enhancements in the budget's first year, to be matched with some University funds but, instead, will receive only $700,000. In the second year, the University will receive $2 million for enhancements, instead of the requested $2.9 million.

Strategic initiatives officials will fund using reallocated and new money will include enhancements to the regional campuses; undergraduate education; student access; economic development; technology; professional schools; safety; and efficiency. The funding shortfall, however, will delay implementation of the initiatives.

The budget also includes language that allows the state to rescind some funding from all state agencies in the event of a state budget shortfall. UConn and higher education officials, however, mitigated some of that loss by persuading legislators to cut only 50 percent of the amount other state agencies are targeted for, saving UConn about $850,000 annually.

"We will have to make some adjustments in order to meet all commitments, and we'll be making changes during the course of the year to move funds toward academic programs. We also will be seeking additional support to grow our academic capacity," Maryanski said.

Reallocations, Maryanski said, will total about $6.6 million in each year of the biennial budget, while increased tuition revenues of about $8 million during the period, and other increases, will keep the budget in balance.

Legislators also approved a bonding package that includes funds to construct a convention center and Sportsplex at Adriaen's Landing, allowing UConn's football team to continue moving toward Division I-A status.

Richard Veilleux