In a speech yesterday, Provost Teresa Sullivan offered a glimpse at the University’s budget process and decision-making, outlining several cuts that she plans on proposing to the University Board of Regents in June.
She stressed that while these cuts will benefit the University’s budget, they will not be to the detriment of the educational experiences of students on campus.
Sullivan spoke in front of the Senate Assembly, one of the University’s leading faculty governance bodies, to update faculty on how the economic crisis has affected the University and provide specific information on some things being done to cope with anticipated decreases in state appropriations to the University.
“I’m not expecting us to get an increase in appropriations,” Sullivan said. “I just don’t think that’s in the cards.”
Sullivan said she is concerned about appropriations because the state is experiencing such tough economic times.
“I’m not angry about it because the legislature has a very difficult task,” she said. “They have declining revenues coming in and they’ve got lots of worthy agencies and causes that need the money.”
Sullivan told faculty that though the University has suffered from the current economic crisis, it has not been as adversely affected as other schools across the country because it has been dealing with the state’s financial hardships for the past several years.
Sketching out some ways University administrators are planning to continue to manage tight purse strings, Sullivan discussed five specific cost-containment measurements that will be proposed.
Among the recommendations, the University will more carefully review and likely cut back on capital projects, Sullivan said.
“We have denied or postponed requests for capital project funding,” she said. “The number of projects we were willing to go forward with have been blocked off for the time being until we’re certain that we can successfully complete those.”
Sullivan’s statements came on the same day that $69.5 million in new University projects were proposed in documents prepared for this Thursday’s Board of Regents meeting.
Sullivan said she and other administrators are also currently exploring purchasing and outsourcing possibilities that would allow the University to utilize its size and scale.
Specifically, Sullivan said she was currently exploring changes to the University’s telephone service, as many phones on campus aren’t used within the course of a month.
“Twenty percent of the telephones at the University neither receive nor make a call in a month,” Sullivan said pointing out that eliminating some phone lines, especially in residence halls, could save money.
Additionally, Sullivan said limiting vendor options could allow the University to qualify for lower pricing, saving the University money.
“Why should we let people buy 28 colors of Post-it notes? Couldn’t we get by with just 14 colors of Post-it notes instead?” she said. “If we can limit vendor options in that way, we can typically achieve cost savings in what the vendor eventually charges us.”
Sullivan also said a one-year waiting period for the University’s retirement savings plan would be implemented for all new hires.
“For new hires there will now be a waiting period of one year before the retirement savings plan begins,” she said. “That one change surprisingly saves about $6 million a year, which is a lot of money for the general fund.”
Sullivan discussed changes that will be made to employee health benefit plans as well. The measure, which was discussed last fall and was officially made public last month, will increase employees’ expected contribution to health care plans from 20 percent to 30 percent.
Finally, Sullivan said University administrators would review their processes and develop a set of best practices for the use of gifted funds.
Sullivan said that together these proposals, which will likely be paired with other cost-cutting measures, will help to cut expenses while not interfering with the quality of education offered to students.
Over the past several years, the University has made several similar cost-cutting measures, which have saved approximately $135 million. Some measures have included combining information technology services to increase efficiency, implementing more energy efficient processes and better using existing classrooms.
The finalized budget proposal will be submitted to the Board of Regents at its June meeting. Last year was the first year the budget was submitted in June. Previously the budget had been submitted in July.
Sullivan said by finalizing the budget in June, incoming freshmen will know what tuition will be earlier in the summer, but that the University will then be put at greater risk.
“That was a change I initiated, because I thought it was fundamentally unfair to freshmen for them not to have any idea what they were going to be paying until sometime towards the end of July,” she said. “The trade-off is that our freshmen will know sooner what their tuition will be, but we’ll be less certain about what state appropriations will look like.”