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University plans for budget rescissionby Karen A. Grava - July 21, 2008
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| The University has been notified by the state Office of Policy and Management that 3 percent of the state appropriation for the Storrs-based budget is being rescinded. The University’s state support will be reduced by $6.7 million, with an additional reduction of $2.7 million in related fringe benefits. This totals $9.4 million, or approximately 3 percent of the state appropriation. It is not yet clear whether support for collective bargaining increases (which comes from the state’s Reserve for Salary Adjustment account) will also be reduced, says Lorraine Aronson, vice president and chief financial officer. The rescission was imposed throughout the executive branch of state government because state revenues are not meeting expectations and, as a result, the state is projecting a $150 million deficit for the fiscal year that has just begun. In order to close that gap, Gov. M. Jodi Rell exercised her statutory authority to impose budget rescissions of up to 5 percent of state agency budgets. “While this news is not welcome, neither is it unexpected,” says University President Michael J. Hogan. “The state budget is in deficit and we, like other public institutions, must do our best to manage the realities of the day.” Hogan says the University will accommodate the rescission by reducing the permanent budget by 3.5 percent. Only energy, financial aid, and collective bargaining funds will be exempt from the cuts. Schools, colleges, and academic and non-academic departments were asked to submit reduction plans by July 9. Those plans will be reviewed in the next few weeks, before permanent reductions are made. “We have asked every unit to plan for a 3.5 percent reduction,” says Aronson. “This will enable us to meet the 3 percent target, because ultimately some areas will be unable to achieve the necessary savings. Substantial savings on energy costs have already been achieved through conservation and construction of the University’s co-generation plant. In addition, UConn has negotiated a favorable gas contract, and also reduced costs by participating in a new state electricity contract, Aronson says. She notes that work completed under UConn 2000 has resulted in substantial energy savings, through both energy-conscious renovation projects and infrastructure repairs and upgrades. Savings have also been achieved by limiting out-of-state travel, and by carefully reviewing vacant positions before they are filled. Vacancies that affect health, safety, or academic courses are the highest priority for refill; other vacancies are being carefully reviewed, Aronson says. “Our main goal is to ensure that students have access to courses, that we provide the high quality experience that we have promised and students expect, and that safety is ensured,” she says. Even though the budget poses challenges, the University has deployed resources toward strategic priorities, including the hiring of 30 new faculty who will begin work this fall. The Academic Plan, which will be completed by September, sets programmatic priorities. The Health Center is exempt from the state rescission. “We have had to ask the state for deficit assistance and the extremely constrained financial environment remains the overarching reality at the Health Center,” Aronson says. “The structural problems at the hospital will persist until a comprehensive solution is found.” Approximately $78 million in operational efficiencies have been achieved since 1999. Health Center officials are working with PricewaterhouseCoopers on further expense reductions and revenue enhancements, but are still projecting a deficit by the end of the fiscal year. |
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