ECU's Budget Picture
The budget picture is bleak. The most recent projection from the Fiscal Research Division of the North Carolina General Assembly is for a $4.6 billion gap between revenues and expenditures for the next fiscal year, which begins July 1. The House Subcommittee on Education Appropriations is in the budget development process and will have about $1 billion less to spend on education (universities, community colleges, and K-12) than did their colleagues in the Senate in April.
Just a few months ago, we prepared scenarios for a 7 percent cut for the coming year and we considered that the worst case. Today, a 7 percent base budget reduction would be welcome. If we are given a 10 percent reduction for the new fiscal year, that would be a loss of $28.5 million, and some people are predicting it could be twice that much.
Uncertainty about these targets might continue for several months into the next fiscal year. But we must reduce expenditures now in order to realize enough savings for the coming year. While we managed last year's 7 percent one-time cut with little disruption to campus and no budget-induced layoffs, that success will not be possible next fiscal year. We are preparing for dramatic cutbacks that will affect every aspect of our mission.
ECU is fortunate to have clearly defined priorities approved by our Board of Trustees. The first priority is to protect core academic functions and opportunities for student success. However, even this central aspect of our mission would take significant hits under the scenarios we are now planning for. Students can expect larger class size, more difficulty enrolling in electives, and significantly reduced services outside of the classroom.
Board policy requires that we reduce expenditures in virtually every other aspect of the university, even for essential support services and functions in which we take great pride. So, hiring for critical positions, salary increases, the beauty of our campus, purchasing of routine office items, travel of all kinds, campus events, and dozens of additional items have been severely reduced. We have a plan to reduce administrative expenditures by $9 million over a three-year period (fiscal years 2008 through 2010). Nine business groups — affecting such essential services as parking and transportation, information technology, and research administration — have been initiated with targets to consolidate and reduce expenditures by 20 percent to 30 percent. The campus Budget Task Force has reported and a majority of its recommendations are being implemented. We continue to work cooperatively with Faculty Senate leadership, the Student Government Association, and the Staff Senate.
Despite this work, we are forced to cut many more millions from our expenditures. Therefore, I have asked the vice chancellors and the deans to:
- Immediately implement a 7 percent base budget reduction;
- Prepare for an additional 2 percent reduction to be implemented this summer, or as soon as we receive further guidance from the General Administration; and
- Prepare plans for a total spending reduction of 14 percent for fiscal year 2009-10, or a base budget cut of $39.9 million.
Vice Chancellor Kevin Seitz will oversee this process and help me ensure that Board policy and UNC guidelines are followed in each division.
I will continue to update the campus if and when the picture becomes clearer. This crisis will test our will, but it will not change the character and soul of ECU. We will work together as one community and we will emerge from this recession as a great university, committed to being a national model for public service and regional transformation.