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Budget Update – Dealing with the Crisis

Posted by | September 27, 2010

Dear Colleagues,

I am sure you have seen the headlines and messages from state officials concerning the fiscal crisis that grips our state. Revenue forecasts continue to lag, and Governor Gregoire has called for further “belt tightening” within all state agencies. These additional cuts come in the wake of reductions from the FY 09-11 biennial budget that reduced WSU’s gross budget by approximately 23 percent (11 percent after factoring in tuition increases) and a 6.3 percent reduction that went into effect at the beginning of the current fiscal year.

Given these unique circumstances, I want to make sure to communicate as clearly and consistently as possible about how we as a college will approach the challenges ahead.

The Situation

As noted above, prior to the beginning of the current fiscal year (July 1, 2010), WSU was assigned a 6.3% ($13.5 million) reduction to its state permanent budget. The University Administration elected not to distribute this reduction to colleges and other units prior to the beginning of the fiscal year because they did not want to make these budget decisions during the summer when the majority of faculty were not on campus. They did impose a policy that retained open positions deemed non-priority and allocated these to a pool of funds to be used for meeting the $13.5 million reduction.

Last week, the Governor announced another 6.1% ($11.2 million) “call back” of funds allocated to agencies for the current fiscal year. Higher education was also told to prepare for a 10% reduction in the biennial budget to be developed for FY-12 and FY-13. It is not know whether the 6.1% “call back” is included in the projected 10% for the next biennium, but those closest to the situation believe that it is not. That means that the 6.1% will also be eliminated from our baseline budget for the next biennium.

So, in summary, over the coming months, we will be dealing with three separate reductions: 6.5% imposed prior to FY-11, the additional 6.1% recently announced by the governor, and the projected 10% for the next biennium. The sum of these cuts approximately equals the reduction imposed on the university prior to the beginning of the current biennium.

Budget Responses

Budget planning is ongoing at all levels – university, college, and departmental. One thing is for certain, reductions of this magnitude cannot be met by simply passing these cuts down to the colleges of units. Something significant has to be implemented at the university level. Nothing is off the table, including such responses as furloughs, tuition increases, and program and/or unit eliminations. However, despite any rumors you might have heard, no decisions concerning these responses have been made, either.

To date, CAHNRS and Extension have not been assigned any specific reduction target for the FY-11 reduction nor the recently announced 6.1% reduction. By holding open non-priority positions, we have been aggressively working to address our yet-to-be-determined share of the FY-11cut. With these funds, as well as our unallocated reserve, we believe we can meet our share of the FY-11 reduction without requesting additional funds from departments, centers, or districts. Unfortunately, this strategy will leave us with little flexibility to address our share of the $11.2 million “call back” or not-yet-determined biennial reductions.

While specific plans have not been made for addressing the recently announced “call backs” and the anticipated biennial budget reductions, I can assure you that we will follow several guiding principles in arriving at any budget decisions:

  • Across-the-board cuts will not be employed.
  • Productivity (both individual and unit-level) will be important factors in allocating budget reductions.
  • To the extent possible, reductions to areas of strategic priority will be minimized (we have worked too hard and for too long to sacrifice these areas for short-term budget considerations).
  • Under no circumstances will we employ a strategy of laying off untenured faculty for the purpose of meeting a budget reduction (we are committed to retaining our high-quality junior faculty who represent the bright future of WSU).

Budget Advisory Committee

In response to the budget situation that gripped the state in 2008, I created a college-wide Budget Advisory Committee (BAC), composed of faculty, staff, and administrators. Since that time, WSU Extension has been integrated with CAHNRS, and hence, we will be adding three new members to the BAC to represent Extension counties and districts. The magnitude of the issues we face requires we get the best thinkers around the table, regardless of where they work within our organization. This group will serve as a generator of creative solutions and a sounding board as we seek means to reduce operations, increase revenues, and identify areas for increasing efficiencies.

Communication

As I said at the beginning of this message, I am committed to keeping communications about these issues as clear and consistent as possible. There no doubt will be continuing media coverage of the state’s economic situation; some of that will be accurate, and some of it will not be. As an organization, we will make wiser decisions more efficiently if we are informed with the facts. To that end, I will relay relevant factual information as I receive it.

Best regards,
Dan Bernardo