Budget update: May 14, 2020
May 14, 2020
— by Dan White, chancellor
At yesterday’s special meeting of the UA Board of Regents' Audit Committee, President Johnsen gave a presentation on the UA FY21-22 budget outlook. The president outlined the reductions to both the state general fund (through the Compact agreement) as well as anticipated reductions as a result of COVID-19.
The budget presented looked at “worst case scenarios” assuming high COVID-19 costs and a possible corresponding reduction in tuition and fee revenues. The presentation also cited the reduction in state funding under the compact agreement, the effect of the current price of oil on the state economy as well as other budget pressures. Across UA and at UAF we have taken measures and are taking more to meet the budget challenges. Although there are unknowns, I am proud of the work being done. I am constantly amazed at the high functioning eCampus, student services, academic and advising units, financial services, facilities, research units and many other areas.
There are bright spots in the budget as well. In addition to ongoing efforts being made to reduce budget pressure through reductions, we expect assistance with near-term needs through a refinancing and restructuring of our debt. This should save us $3 million per year. Furthermore, we have received some funding from the federal government both directly and through the state to help with COVID-19 costs. There is currently an effort in Congress that could increase that amount significantly.
At the end of its meeting, the Audit Committee passed a motion charging the president and university administration to develop options for the Board of Regents’ review on the following things:
- Additional academic and administrative integration
- Revision of the current budget allocation model (not pro rata)
- Structural changes (e.g., mergers, closures, changes of mission)
The President’s Executive Council (President, Chancellors, Vice President Layer and Vice President Michelle Rizk) will begin this conversation. In the coming days and weeks ahead, I will be providing whatever assistance I can to help address the Audit Committee’s request. The BOR will review these options and make final budget and related decisions at their June 4-5 meeting.
These conversations are not new to us. At UAF, we have been looking at innovative ways to cut costs, create efficiencies and increase revenues for some time now. We have identified and shared our FY21 and FY22 plans, and we will continue to move forward with our planning efforts to ensure that wherever the revision/restructure takes us, UAF is thinking well beyond FY22.
We have the benefit of so many bright minds and all of our dedicated faculty, staff and students to help us with our thinking. As we rise to the challenge, I continue to be confident that we will remain a strong and vibrant university for students inside and outside of Alaska.
I thank you for your patience and steadfast commitment to UAF as we navigate a constantly changing landscape. I am looking forward to the fall semester and to seeing all of you, on campus and/or virtually.
As I read in the paper about great athletes signing to compete for UAF or new grants received to lead cutting-edge research at UAF, I am heartened. Our students and investors are with us for the long haul. Thank you for being part of our present and our future.
Thank you for choosing UAF.