Regents approve FY 08 budget request

Submitted by Kate Ripley
Phone: (907) 450-8102
11/02/06

The University of Alaska Board of Regents on Wednesday approved an operating budget for the next fiscal year that would require $315 million from the state treasury, about a third of the amount necessary to run the 15-campus system. That amount does not include extraordinarily high increases in the state-run retirement programs for the coming year.

University-generated revenue makes up the rest of the income stream, including federal research grants, private donations and other funding sources. The total operating blueprint for the year, with all revenue sources combined, is $879 million. That compares to the current year’s $774 million operating budget, which includes $282 million from the state.

"We asked many questions about this spending plan, and received thorough answers. I think this is a good budget, a solid budget and one that continues moving the university forward, for the betterment of the state," said board chair Mary K. Hughes of Anchorage. "Many of our high-demand programs established in recent years were in direct response to state needs. This budget keeps that effort on track."

The budget next goes to the governor for consideration and then to the Alaska Legislature.

The $315 million figure does not include increases necessary to cover the latest hefty rate increase for retirement in the state-run Teachers Retirement Program, TRS, and the Public Employee Retirement Program, PERS. Board members agreed with the UA administration that extraordinarily steep increases in the TRS retirement ought to be paid directly to the program, rather than pass through UA’s budget first. That strategy, regents agreed, would hold the university relatively harmless when seeking competitive federal research grants. About 20 percent of UA’s budget comes from federal research agencies.

In the past, retirement funding was included in UA’s budget and then paid back into the TRS program. With the Alaska Retirement Management Board’s recent decision to require a 54 percent employer contribution, however, the result to UA is an inflated staff benefit ratio that could hurt the institution when competing for federal research dollars. The university already has seen its retirement costs double from FY 04 levels prior to the ARM board’s latest action.

UA’s budget plan also provides for 5 percent program expansion, allowing for the continuation of allied health offerings statewide, a dental hygiene program in Fairbanks, a doubling of enrollment in the first-year medical school partnership program (WWAMI), expansion of the engineering program in Anchorage and an investment in UA’s competitive research.

In addition, regents approved seeking $332 million in state funding for capital needs in the coming fiscal year. The No. 1 priority, regents agreed, is $44 million for facility and equipment renewal, renovation and code compliance statewide. Second on the list is $105 million for a new biosciences facility and West Ridge heating capacity expansion at UAF. The biosciences facility would replace existing biology teaching and research labs built prior to 1960. The new facility, at 110,000 square feet, would better serve students and allow more hands-on research, regents agreed. Third on the capital list is $67 million toward deferred maintenance, renewal and renovation across the system.

For a complete look at the Board of Regents’ agenda, go to www.alaska.edu/bor. Budget documents can be found at www.alaska.edu/swbudget/.