Budget update: May 22
May 22, 2019
The last day of the regular legislative session ended last Wednesday, May 15. As anticipated, Gov. Michael Dunleavy called a 30-day special session to address specific issues, including the FY20 operating and capital budgets, K-12 education appropriations, and criminal justice legislation.
The university’s operating and capital budgets that were agreed to in conference have not been put to a floor vote yet and will likely be one of the final bills passed during the special session. The House and Senate Conference Committee settled on a modest decrease of $5 million in the university operating budget, and the House Finance Committee is currently considering a capital budget that appropriates $10 million for university deferred maintenance. These numbers are still subject to budget negotiations in the coming weeks. The budget will then go to the governor for his consideration.
A list of new investments was included for each university in the FY20 budget proposal that the UA Board of Regents submitted last fall to the governor. As I have mentioned in previous budget columns, the president and the BOR would like to see investments made even if the budget is down from last year. Late last week, President Johnsen asked that I review the original FY20 strategic investments for ÃÛÌÒÓ°Ïñ and recommend if changes are needed. My core leadership team and I have met on this topic and will meet again today to discuss final recommendations. Since all new investments would need to be from reallocations in a reduced budget, our overall recommendation will be to reduce the net new investments.
One new line item placed in the FY20 strategic investments for the university system is for Educators Rising. This line item of $825,000 was added by the legislative conference committee on its final recommendation for the UA budget. is a program focused on preparing ÃÛÌÒÓ°Ïñ high school students to become ÃÛÌÒÓ°Ïñ’s future teachers. As a new initiative in a reduced budget, we will be asked to reallocate toward this important program.
My April 30 memo to the provost and vice chancellors remains the primary focus of budget planning for FY20. The memo contained the following elements:
- Universitywide reductions: Plan for a 10% reduction to state appropriation general funds within your authority. The 10% need not be applied equally between your units. The current reduction is not being requested from the unrestricted revenue sources of tuition or indirect cost recovery.
- Unreserved fund balance, or UFB: Plan to follow university guidelines for FY19 UFB, or work with Financial Services if additional resources are needed to stay within the allowable thresholds.
- Faculty voluntary separation incentive program (formerly titled early retirement program): ÃÛÌÒÓ°Ïñ Human Resources is working to collect information on this option for specific areas. Deans and directors should plan to provide recommendations on where this might be effective in their units.
- Increasing class sizes and reducing sections: Recent recommendations from the Class Size Task Force suggested immediate implementation of increasing GER class capacity and offering fewer sections.
We are continuing to review campus facilities and space located on and off campus for long-term cost savings. In previous budget updates, I talked about three houses on Copper Lane, one on Colville, and the Nordic House. These houses are scheduled for demolition in the coming months, which will reduce ÃÛÌÒÓ°Ïñ’s footprint by 11,000 square feet with a one-time cost of $316,000. By removing these structures, ÃÛÌÒÓ°Ïñ will realize annual savings of $50,000 and avoid spending $1.3 million in renovations and deferred maintenance.
The farm facilities, along West Tanana Drive at the Agriculture and Forestry Experimental Station, are undergoing a space review. With the upcoming move of reindeer from the West Tanana facility to the Large Animal Research Station on Yankovich Road, early discussions include the following structure removal or facility closure:
- removal of three reindeer corrals adjacent to West Tanana Drive,
- removal of facility AF110, a shepherd’s hut that has typically been closed during the academic year, and
- removal of facility AF117, which was formerly used as a visitors center.
With the removal of the three corrals, consideration is being given to additional parking to accommodate summer activities at the Georgeson Botanical Garden.
As this effort continues, executive officer Nickole Conley will be reaching out to deans and directors to learn about facilities and space that may have outlived their usefulness.
I am hopeful that the university’s budget will be finalized in the next 30 days. Thank you to all for the effort that has been put in on task forces, committees, strategic enrollment planning and strategic planning. All of these have helped guide budget measures being considered.