Budget update, April 1, 2016

April 1, 2016

Marmian Grimes

With the month of March having just ended, we’ve heard from many people wondering about the status of the university budget and the first round of layoff notices we referenced several months ago.

While leaders throughout the university have been working to craft a plan to manage our shrinking budget, that process has been slower than expected. At this point, this is what we can share:

Even before the legislative session began, we knew this would be a difficult budget year. We initially planned for a $26 million budget gap in FY17, which includes both funding reductions and cost increases due to salary and benefit increases, utilities and other expenses. Because legislative action has made it clear that we may face even steeper cuts in our state funding, we have also been planning for the possibility of a $36 million budget gap.

It is virtually certain that the budget gap will be at least $26 million, so many units have begun implementing their budget reduction plans. Unfortunately, some of those plans include losing valuable people. Some UAF employees have received layoff notices and notices of non-renewal or contract reduction. We also know that nearly all units will be leaving most vacant positions unfilled next year, in an effort to balance budgets. For UAF as a whole, even our best-case scenario of a $26 million reduction will likely mean at least 300 people and positions affected.

While some units have begun implementing their plans, others are awaiting more information. Meanwhile, the UAF administration is weighing options proposed by each of the vice chancellors carefully. Recommendations from the Planning and Budget Committee on those options are expected to be presented to the cabinet in the coming weeks. The Board of Regents is expected to weigh in on the budget reductions next week and the Legislature is scheduled to adjourn mid-month. Both will give us more certainty on our next steps.

Budgeting with a constantly changing revenue target is proving a challenging task, and one that happens more gradually than all at once. As units have more clarity in the coming weeks and months, they will implement their plans. Regardless of the timing, all affected employees will be given due notice and provided assistance.

I ask for your patience and understanding in the coming weeks and months. I know you are all feeling the heavy load and uncertainty. I will continue to share updates as they become available. I would also encourage all of you to read your Cornerstone newsletters, as we will often use that mechanism to share information as we receive it, along with legislative updates.