A semester after scrambling to find over $7 million to return to its parents, The University of Texas-Pan American is now reeling over another round of cuts, as the UT System has mandated that each of its schools give back an additional 10 percent from its budgets.
UTPA President Robert Nelsen, who succeeded interim president Charles A. Sorber in January, was quickly greeted with the news that Gov. Rick Perry and other state officials on the Legislative Budget Board (LBB), has asked all state agencies to return five percent of previously encumbered funds. The decision which includes universities throughout Texas originally meant UTPA would return $7.4 million plus account for an added $1.2 million in employee benefits the state has paid in the past.
However the LBB will add an extra 10 percent of returned funds for the FY year 2012-2013 on top of the five percent to further assuage the state shortfall, which is expected to be near $4 billion. The decision will officially be made when the Legislature meets in January.
This means the university has to dish out an extra $10.6 million to cover the loss of state funds, plus $3.7 million in employee benefits will have to be accounted for during the FY year. The loss of those funds, plus the $7.4 million given back to the state, means a net loss of $21.8 million for UTPA.
“Because the state pays employee benefits in proportion to the state appropriation versus tuition charged at the institutions,” reported J.C. Gonzalez, assistant vice president of business affairs and the budget director for the university, “as the state’s proportion grows smaller, more of the employee benefit costs get shifted to the institution.”
Gonzalez further explained that the university is currently working to initiate budget cuts during the upcoming FY year 2010-2011, approaching in September, to spread the cuts over two FY years rather than “getting hit hard in one year.”
One route the university has taken toward satisfying the state-mandated cuts is identifying 12 percent in general revenue for each division, from funding from the state. For example, Academic Affairs is the most expensive in terms of budget therefore its target is $7 million of the 12 percent. Other divisions include Enrollment and Student Services, Business Affairs and University Advancement.
“This is all still very tentative,” Gonzalez said. “It’s an ongoing process; we still need to assess with President Nelsen. It is then that we can figure out which programs we need to keep or which we can shift funds from.”
President Nelsen has said no layoffs or furloughs are expected, although some individual salaries have been reduced. The Faculty Senate has agreed with the elimination of merit raises; therefore no one will get laid off, which has been a faculty/staff fear all along.
Salary sweeps, a process by which the university tales allocated funds back for positions that have not been filled, will also be used. The president suggested that hiring might slow down as a result of the budget crunch.
“We may not be able to hire as many people as we have in the past,” Nelsen said. “We’ve definitely not been able to fill as many positions of faculty who have left or retired, but that will continue for the time being.”
However faculty concern on campus is said to be rustling about the budget decrease and its effects on finances and instruction. An anonymous faculty member has felt concern much like other colleagues.
“We have been told there will be no merit raise for FY 2010-2011,” he said. “Once the added 10 percent decrease is approved by legislation in January, the university will likely look at another FY year of no merit raises. This means both faculty and staff will have no pay raise for three years [2010-2013].”
Eyebrows have not only been raised about finances and pay, but also about the instruction each college will have to do without. If a faculty member leaves the university, the position remains unfilled.
This furthers speculation that the decrease will eventually affect students.
“Students may face fewer courses or bigger sections because of the pressure to generate more revenue but it doesn’t help in the long run,” said the faculty member. “It’s a campus-wide issue.”
Thus far the university has accumulated $5.5 million of state-mandated funds with $1.7 million gathered through division budget cuts.
The next step is to turn in a scheduled budget plan for the five percent reduction along with a separate plan for the 10 percent reduction. Both plans are to be submitted during the month of August for the Legislative session in January.
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