After receiving little notice and weighing potential budgets, the university administration unveiled Tuesday where belts would have to be tightened.
With the release of its 8 percent Section I, general funds budget reduction draft plan, the UW Office of Academic Affairs put into motion the roughly $15,664,903 in cuts (See a chart break down here: BudgetChart) that would come into effect July 1, 2013.
The cuts come in response to Gov. Matt Mead request on April 23 to reduce budgets statewide in light of low state natural gas revenue forecasts.
“The university recognizes the prudence of the governor and legislature in asking for budget reduction plans given the declining price of natural gas and its negative effect on state revenues,” UW President Tom Buchanan wrote in a memo to campus.
Next to the university’s general funds budget cuts, the drafts also include cuts for the Western Interstate Commission for Higher Education funding and other medical education funding.
General Fund / Budget Reserve Account Revenue Forecast. Courtesy of the Wyoming government.
Financial Aid Reduced and Harder to Get
In total, students would receive $2.3 million less non-Hathaway, UW-funded scholarships, including reduced graduate education initiatives, according to the University of Wyoming (Agency 067) 8 percent budget reduction draft plan.
Since these cuts would reduce institutional undergraduate scholarships, which could result in increased student debt, the draft plan suggests that this could lead to a potential decline in enrollment, “especially for nonresident students.”
For remaining scholarships, the draft plan foresees higher academic criteria by necessity, as well as characterizing awards as less renewable and capped.
“The wording in this [draft] is broad, because we’re talking about possibilities,” Director of Student Financial Aid Joanna Carter said when asked about which scholarships would be affected and what new criteria might look like.
“It is easier to say what [scholarships] are not [affected], such as awards received from private donors through foundations,” she said. “But if you were to cap an award, it would mean that instead of eight semesters, you would have six instead, for instance.”
Carter said that renewal of awards could also be restructured from every four years to a year by year, based on funding.
She said there is no need for students to panic about receiving their financial aid.
Up to 125 Fewer Jobs Filled
While Buchanan wrote in his memo that cuts would be made in non-personnel areas to minimize workforce reductions, he also warned, “given a reduction of this magnitude it appears inevitable that UW will need to make reductions in workforce. As many reductions as possible will be made by attrition. We will endeavor to retain positions most closely aligned with the university’s core mission and our areas of distinction identified in UW’s strategic plan.”
The difficulty in avoiding personnel reductions during budget cuts comes from the relatively large sum that salaries make up in the Section I budget.
“Approximately 73 [percent] of the institution’s Section I budget is in salaries and employer paid benefits,” according to the faculty senate input for 2013-14 budget reduction scenarios.
Personnel cuts are planned in the academic, non-academic and administrative workforce, resulting in $6,448,903 budget reductions, making up about 41 percent of the total budget cuts.
In total, the budget cut would require the elimination of 60 to 90 administrative and non-academic positions through attrition or reductions in force, according to the draft plan. The impact this could have ranges from the loss of financial guidance and enrollment assistance to impaired IT and maintenance and repair.
Academic personnel, such as professors, lecturers, librarians and more, face a reduction of 20 to 35 positions, according to the draft plan. Whereas non-academic and administrative reductions might be mostly direct eliminations of positions, academic personnel would mostly be reduced through attrition, leaving positions open and not refilling them.
Potential results for students include “increased class sizes in large enrollment courses, some closed courses, eliminated options available within some programs of study and a reduction in statewide off-campus services,” according to the draft plan.
“Unfortunately, when 75 percent of you budget is wrapped up in personnel, you really can’t address a budget reduction of this magnitude without impacting positions. I think that’s the real hard part and the real unfortunate part of the financial circumstances we find ourselves in,” Buchanan said.
‘Other’ Budget Cuts Range From Athletics to School of Energy Resources
Of the $6.1 million reductions in non-personnel support budgets, affected areas would include instructional excellence, intercollegiate athletics, classroom technology and research computing, operations and maintenance of plant, administration costs and student services.
Impacts of cuts in these areas were not detailed in monetary numbers, but effective value.
Athletics operating budget would see reductions in part time staffing, outreach, summer school, fifth year grant in aids, scholarships, recruitment, team travel and equipment – such as funds for new uniforms, practice gear or shoes.
Student services are anticipated to see reduced grant writing capacity, student mentorships, advising and student transition services.
Other reductions would revolve around less up-to-date equipment, modification of insurance coverage and premiums, reduced rates of repair and reduced library collection acquisition.
In addition to these non-personnel support budget cuts, the School of Energy Resources would see a reduction of $816,000 in matching funds and graduate assistantships.
Thorny Path to Budget Cut Decisions
A hot button issue among both staff and faculty on campus has been a lack of salary increases over the years. Buchanan preemptively addressed the issue in his memo to campus earlier this month.
“We are all aware that UW salaries for academic personnel, administrators, and staff are significantly below the average for our comparator institutions. We have worked hard to bring salaries closer to average but have yet to reach that goal. A cut in salary and benefits would represent a serious setback to those efforts. Our employees are our most important and most valued resource. A cut in salary and benefits sends exactly the opposite message and could result in departures of the employees we most want to retain,” he wrote.
While the cuts will not be received as a blessing, Buchanan wrote in his memo that the state deserves the university’s support.
“Historically UW has benefitted from almost unparalleled, strong support from the State of Wyoming; now we are being asked to do our part to help the state survive what we all hope is a short period of weak natural gas prices,” he wrote.
The price for natural gas has been low because of a combination of demand imbalances and unusually mild weather in a traditionally high-demand heating season, according to a state revenue forecast.
“[This combination] has resulted in storage levels more than 11 [percent] higher than last year at this time. Prices at major hubs in early January fell below $3.00 [per million cubic feet] as a result, at a time when prices have historically exceeded $5.00 [per] mcf,” according to the forecast.
Wyoming’s General Fund and Budget Reserve Account revenue is estimated to lose $113.1 million in tax revenue in the 2013-14 fiscal year. Other funds affected by this include the School Foundation Program and the Permanent Wyoming Mineral Trust Fund. Taking into account all factors, the SFP is estimated to see a net loss of $74.4 and the PWMTF to have a reduced tax flow of $14.3 million, according to the forecast.
By the time Gov. Mead made the request, natural gas prices had been as low as $2.00 per mcf, according to a press release. In the release, Gov. Mead estimated that the statewide 8 percent budget cuts would save $74.5 million in fiscal year 2014.
“We have to see what we can live without,” he said.
