February 9, 2004

Proposed Budget Presents New Challenges

Gov. John G. Rowland last Wednesday made the University's financial challenges clear, when he recommended a revised 2004-05 budget that would set UConn's Storrs-based state appropriations at a level below the amount funded in 2002-03, but increase funding for the Health Center by a modest $650,000 compared to two years ago.

"With state revenues beginning to stabilize, we thought some relief from the deep cuts of the biennium would be possible," said

Lorraine Aronson, vice president and chief financial officer.

The governor's recommendation for a state appropriation of $191.75 million reflects a reduction of nearly $9 million from the Fiscal Year 2005 appropriation approved in August as part of the biennial budget. The proposal makes permanent previous reductions stemming from the Early Retirement Incentive Program (ERIP).

Aronson said the recommendation also assumes - incorrectly - that the University will save $10 million in general funds based on the wage freeze agreed to last year by faculty, professional staff, and administrators. She said the actual savings are closer to $5 million.

"This is not only a financial blow," she said, "but it fails to acknowledge the sacrifice made by our employees, who were the first in the state to step forward last year to offer a salary freeze. Seventy-five percent of employees at the Storrs-based programs will see no wage increase for the current fiscal year."

UConn officials already were struggling with a Fiscal Year 2004 budget that fell nearly $15 million short of current services for Storrs-based programs, and $3.6 million below current services at the Health Center. The governor's 2004-05 recommendation for the Health Center was $73.86 million, slightly below the $74 million the legislature appropriated last August.

The budget recommendation also includes a $4.4 million increase to the Department of Correction's budget to address, then make permanent, the current year's shortfall in the Health Center's Correctional Managed Health Care program.

In the original biennium budget, officials had sought a current services budget for 2004-05 of $218.7 million for Storrs-based programs. The original request for the Health Center was $81.1 million.

"The biennial budget passed last summer already had left us significantly short, financially, and then we had to respond both programmatically and budgetarily to the ERIP reductions, as enrollment continued to climb," Aronson said. "While we will continue to emphasize cost control, the reality is that we must hire permanent faculty and staff to provide students with the quality educational experience they expect and deserve."

The governor's package also contains no funding for the Endowment Matching Grant program to support private fund raising. The governor acknowledged the program's success, but indicated that the severity of the state's fiscal crisis did not allow funding for the program at this time. State support for the program has been in limbo since the latter part of 2000.