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  October 29, 2001

Budget Crunch Leads to Recissions

The state's budget crunch has led the state's budget office, the Office of Policy and Management, to rescind funds from both the Storrs-based programs and the Health Center budget.

The rescissions total $2.9 million of the $193.6 million state budget for the Storrs-based programs, and $800,000 for the $74.9 million budget at the Health Center.

"We believe that we can meet this challenge with prudent and careful management," President Philip E. Austin says. "We do not yet face the need to cut back on programmatic plans at Storrs, but should the financial situation worsen, we may need to revisit that eventuality."

The Health Center, which has faced the serious budget difficulties affecting university health centers all over the country, has already implemented a number of austerity measures and has refocused its priorities in order to support programs that are the most important to the state.

"We are continuing with our focus on reallocations and efficiencies at the Health Center and may need to intensify our efforts as the year progresses," says Austin.

The state's concern about its fiscal health stems from a national recession deepened by the terrorist events of Sept. 11. "Connecticut is not unlike other states that are worried about the future," says Lori Aronson, vice president for financial planning and management. "We are the state's partner and must do all we can to maximize efficiency while at the same time being more productive."

The most recent estimate by OPM of the state's budget deficit now places it at approximately $300 million. One of OPM's cost-saving measures has been to rescind spending that was to be supported by the state's surplus accounts. Some of those funds were targeted for the University during a special session of the Legislature called during the summer to finalize the biennial budget for fiscal years 2001-02 and 2002-03.

For UConn, maintaining a balanced budget will require special attention, Aronson says, because the final state budget approved for the 2001-2002 budgets for both the Health Center and the Storrs-based programs was less than the amount to support services at last year's levels.

Austin has stated that UConn's growth will increasingly depend on non-state revenue, managing expenses, and making strategic decisions so that the state's allocation to the University can be maximized.

But not all of the factors within the budget are within the University's control. For example, energy costs, dependent on both weather and oil prices, are uncertain. Milder weather and cheaper prices could work to the University's benefit, just as colder weather and higher prices would further stress the budget and increase the need for cut-backs.

The Governor has called a three-day special session to discuss budget reductions, November 13-15.

Karen A. Grava

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