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Budget update: March 27

March 27, 2019

Marmian Grimes

— by Dan White, chancellor

As we continue to advocate for the university, I want to use this week’s column to break down and explain the different components of ����Ӱ��’s budget. The budget can be complex and confusing when you hear it discussed across multiple platforms such as social media or local news.

����Ӱ��’s budget is broken into four categories: unrestricted general funds (UGF), designated general funds (DGF), federal receipts and “other.” It is important to note that a budget is only the authority to spend money. Only the UGF portion of the budget is direct revenue from the state. The remainder of the budget is derived from external sources such as federal grants and student tuition. Hence the term “receipt authority” is used to refer to all funding sources other than UGF.

Our first category, unrestricted general funds, is the direct funding from the state of ����Ӱ�� that is used to finance the base operations of the university including ongoing support for teaching, research, outreach, administration and fixed costs (e.g. building debt and utilities). We also receive a portion of our research grant matching funds under UGF. This funding is important to our research mission as many granting agencies have match funding requirements. We also receive ����Ӱ�� Mental Health Trust funds under UGF that support specialized curriculum, allowing UA to offer an in-state pathway for social workers to earn a master’s degree.

Designated general funds, our second category, comprise a suite of revenues generated by ����Ӱ��. These include student tuition and fees; student housing and food services; corporate, private, and local government grants and contracts; and endowments. DGF comes from a mix of unrestricted and restricted sources. The university may apply unrestricted funds to any purpose to support our mission, while restricted funds are limited to specific projects or purpose by the grantor, donor or external source. It is important to note that in nearly all cases, the ability to receive DGF depends on our receipt of the state’s UGF. For example, UGF is used to pay for the professors who teach classes. With fewer professors, ����Ӱ�� would offer fewer classes that are our source of tuition revenue. Likewise, without the UGF funding for researchers, fewer faculty could apply for fewer research grants. In both cases, less UGF translates directly into less DGF. Conversely, however, more UGF from the state allows ����Ӱ�� to grow, increasing our ability to attract non-state sources of revenue into our economy, to educate more students and to generate more groundbreaking discoveries.

The third category in our budget, federal receipts, encompasses the authority to accept and spend federal grants and contracts. These funds are considered restricted and use is limited to specific projects or purposes by the grantor, donor or external source.

����Ӱ��’s final budget category, “other,” is funds received from grants and contracts with state agencies as well as internal transfers.

The bottom line is that the university has a diversified portfolio of funding and spends more money in ����Ӱ�� than it receives from the state in the form of UGF. The university is a good investment.

Thank you to everyone for your advocacy efforts and to those who supported the university at the legislative information office this past Sunday. Your efforts and heartfelt comments were heard and are making a difference. Thank you again for your continued support.