University Senate

August 2008 Meeting

President’s Report

 

 

President Leland thanked new and returning senators for their service to the University Senate. As the university’s official policy recommending body, the University Senate plays an important role in shaping decisions that affect students, faculty and staff.

 

President Leland provided a brief update on the Provost & Vice President for Academic Affairs search. She stated that the search committee would be selecting candidates for airport interviews in the upcoming weeks. Based on search committee recommendations, the president expects to invite 2-4 candidates to campus in late September or early October. An open forum with faculty will be scheduled for each candidate.

 

President Leland then focused on the budget situation in the State of Georgia. She shared the following budget information with Senators and responded to their questions.

 

• During the summer months, state revenue forecasts for this fiscal year have projected significant revenue shortfalls in the budget approved by the Governor and General Assembly during the last legislative session. To date, this shortfall is estimated at $1.6 billion. As a consequence, all state agencies--including the University System of Georgia--have been asked to prepare for significant budget cuts.

 

• A 6% budget reduction has already been applied. For Georgia College, that amounts to a permanent reduction of over $2,226,000 from the base budget. The university was able to handle this initial reduction centrally, mainly by applying institutional reserves and tuition carry-forward to the reduction. President Leland noted that she previously built reserves in anticipation of the revenue shortfall and that she had hoped to spare individual units from the pain of budget reductions. Unfortunately, the state’s economic picture has become even gloomier than expected and additional budget cuts this fiscal year are anticipated.

 

• Specifically, university system institutions have been asked to plan for further reductions totaling an additional 4%. For Georgia College, that would amount to losing another $1.5 million from the current base budget. A cut of this magnitude would be unprecedented and cannot be managed by tapping reserves, lapse (unfilled vacancies), and excess tuition revenue. For this reason, President Leland implemented temporary freezes on expenditures (including travel and equipment exceeding $250), new hires, and has asked each academic school and vice presidential division to develop plans for sustaining a 1% and 2% budget reduction during the current fiscal year.  This will be both challenging and painful, but the goal of this planning exercise is to determine the best ways in which to sustain the university’s instructional mission and the services that support it and also to avoid--if at all possible--staff layoffs. For example, President Leland noted that the university currently has approximately $3 million committed to unfilled positions. The planning exercise will help the university to determine which of these hires might best be deferred for another year or two because such deferral would cause the least harm to the continued operation of the university and fulfillment of its mission.

 

• The expenditure and hiring freeze does not mean that the university will need to curtail all travel, all expenditures in excess of $250 or even all hiring for new positions. There is a process for seeking exemptions that will be managed at the school and division level. However, schools and divisions need to plan for the worst-case scenario and ensure that such exemptions are consistent with a sound strategy for sustaining further cuts to our budget. Governor Perdue’s Office of Planning and Budget has asked state colleges and universities to document their efforts to eliminate non-essential operating expenditures and hires. The freeze with its exemption process will allow the university to produce the required documentation as well.

 

• State policy makers and the Board of Regents have been discussing additional strategies for coping with the state’s revenue shortfall—and not all of these strategies will be popular with students and employees. These include: 1) deferring January merit raises for state employees; 2) implementing a temporary student fee; 3) abandoning the university system’s “fixed for four” guaranteed tuition policy; 4) increasing employee share of health insurance premium costs; and 5) temporary changing in rules that will allow us to apply auxiliary funds and interest income to operating expenses. President Leland emphasized that the situation remains extremely fluid and promised to keep the university community informed regarding further actions that the university may be required to take with respect to the current budget situation.

 

In response to questions, President Leland stated that the university plans to go forward with merit increases and the faculty salary study implementation plan unless prohibited from doing so.