Dear members of the university community:
This past Monday morning the Executive Committee had the first of several budget planning sessions to address the challenges presented by the 2009-10 budget. Clearly, the state revenues continue to drop and the overall economic condition of the country continues to decline. Those factors have a direct effect on our budget and that of every state agency.
On one hand we are optimistic and aggressive in pursuing possible funding sources, including federal economic stimulus dollars. But having spent the last two days in Tallahassee, I can tell you that we must not be overly sanguine and start planning for what could be a 12 to 15 percent cut to our already much reduced state funding.
It is still early in the budget planning cycle and there are many factors that could influence our situation, including what the economy does in the coming months, whether a federal stimulus package passes, and ultimately how our State Legislature decides to distribute the cuts during the regular legislative session, which starts March 3, 2009.
Just as we did last year, we intend to approach the problem in a thoughtful, methodical and strategic way that is inclusive of the entire university community. Provost Ronald Berkman and Senior Vice President Vivian Sanchez have already started to talk with deans about next year and the Budget Stabilization Committee continues to meet on a regular basis. You can anticipate that we will schedule Town Hall Meetings and that there will be ample opportunity for your input.
Follow proven strategy
Going into our second year of budget cuts due to state revenue shortfalls, we will follow the strategic plan we designed last year. I think you will agree that the fact that we did not have to make additional cuts in January (mid FY2008-09) is evidence that our approach is a successful one. Many of our sister institutions are struggling with crippling cuts mid way through the budget cycle, while we are able to fine tune our plan and look ahead. The strategy we put in place last year assumed a prolonged economic downturn so we planned for three years of cuts. FY 2009-10 is now projected to be even worse than anticipated. We will need to cut another 6 to 8 percent cut in order to meet the expected 12 to 15 percent shortfall. Given the economic climate, we will expand our plan to look ahead five years instead of three.
Our strategy for next year may be summed up as retention and preservation. We are looking to retain our students and deliver a high quality education to them.
Employees will be asked to make sacrifices
We are also looking to retain our talented and committed employees. But it’s going to be a tough year. In an effort to mitigate or eliminate layoffs, we are considering implementing a number of measures that may include some or all of the following:
- Dip into reserves (State mandated minimum 5 percent of state budget)
- Freeze hiring
- No raises in 2009-10
- Eliminate the possibility of over time pay in non-critical areas
- Implement a furlough plan (time off without pay). One day, across the board, furlough represents $1 million in savings for the university.
All of these ideas are under consideration. And this is where we most need your input.
Tuition and fee increases
Our students will be asked to contribute more as well. This fall, a 15 percent tuition increase goes into effect for many of our students. This increase was approved by the Legislature, in part, to help us get our tuition closer to the national average. It will take more than seven years of 15 percent increases for us to reach that national average.
It is also likely that after consulting students, we will adopt the maximum-5 percent-technology fee allowed by the legislature. Student leaders at the state level are in favor of implementing this fee. An FIU University Technology Fee Committee has been appointed, composed of students and administrators to review the proposed fee and recommend a technology implementation plan to the administration. A plan will be submitted to the Board of Trustees for approval. This new source of funds is expected to bring in approximately $5 million to enhance instructional technology.
Foundation has been hit hard
Traditionally, when we have had diminishing state funding we have looked to our endowments for additional support. This year we don’t have that option. Like most other university foundations, our foundation assets have decreased by more than 23 percent. This could mean that our endowments may not yield a distribution this year. Scholarships, programs and even some positions may be impacted. We will not know for sure until the close of the fiscal year on June 30th.
I urge everyone who has access to foundations accounts to exercise extraordinarily caution in spending. The foundation staff is in the process of reviewing each account and prioritizing contractual obligations and other commitments. This must be done, of course, without jeopardizing the intent of our donors.
Budget planning agenda
In the coming weeks, you can expect regular updates from me as the budget situation develops. If you have colleagues who are not receiving this message, please forward it to them and ask them to send me an email message (firstname.lastname@example.org) so that they can receive future editions. It is very important that everyone be informed and has the opportunity to become involved in this process.
Next week I will share with you a schedule of budget planning meetings, many of which will provide opportunities for participation from the university community.
Here’s is the link to our Budget Crisis website, which will be updated as this process unfolds. http://president.fiu.edu/budget1.html
At times like these, more than ever, it is important for us to stay focused on our mission, and take time to celebrate our victories – big and small. The Biscayne Bay Campus just reopened the Aquatic Center, our researchers continue to secure grants, and later this month we will host an unprecedented Geopolitical Summit with some of the most respected thinkers in the field.
I invite you to participate in everything FIU has to offer and become involved in this most difficult process we must undertake. I look forward to your comments, questions and ideas to help us weather this difficult period. Please email me at email@example.com.
Modesto A. Maidique