Budget update: Nov. 1
November 1, 2019
— by Dan White, chancellor
This week your leadership team spent time on high-level budget planning for FY21. While we are still waiting for the full FY21 budget distribution plan and guidance from the president, we are preparing to begin the public discussion of our budget at our annual open forum on budget on Nov. 21.
Per the compact between the Board of Regents (BOR) and governor, it is our expectation that the BOR will submit a reduced budget ($25 million less than FY20) to the governor with the additional need for internal reallocations to fund market increases, fixed cost increases, and strategic initiatives of the BOR. This budget is on the agenda for approval at the Nov. 8 Board meeting. Additionally, since the FY20 budget came to us so late in the year, we are using a mixture of vertical cuts, horizontal cuts, and one-time savings to bridge the present budget gap. As such, in FY21 we will be making adjustments that reflect both base cuts avoided in FY20 and the anticipated FY21 decrement. Of course, there are many unknowns at this point as the state’s budget process has not begun.
As we start to think about meeting the FY21 budget, a number of reviews and strategies will need to be involved. One suggestion that I forwarded several months ago was to grow the shared services models that were organically begun at UAF some years ago. We can benefit from this strategy more broadly as a way to provide service and preserve expertise. The best practices developed to date in a variety of grassroots shared service models across UAF that can now inform a more expanded approach.
Expedited academic program review planning is already underway. I’ve been asked whether we have a target in mind for savings to be realized from these reviews, and the short answer to that is no. The primary purpose of program reviews is to evaluate the quality of our programs, their effectiveness, efficiency, and their alignment with UAF’s mission. While the results of the reviews will clearly inform decisions that must be made to play a role in our current budget, we’re not asking the review committees to recommend cuts to reach a specific dollar amount. It’s also important to keep in mind that any savings that may result are not immediate or short-term in nature.
In parallel with the academic program reviews, I will be working with Faculty Senate on a process for review of UAF administration. Like the academic reviews, this review will not be working towards a specific reduction target. I anticipate Faculty Senate will work with Staff Council and ASUAF student government on proposing/recommending a process to me and in helping to populate the team conducting the administrative review. Since administration supports academics and research, we will want to consider the administrative support needed in the context of recent changes and forecasted needs. I look forward to this review.
As always, we will be evaluating what we are doing in a time when resources are constrained, and what we might need to stop doing. Where possible, I continue to implement vertical reductions and further reduce our facility footprint, operations and maintenance costs, and deferred maintenance bills. And while there are many unknowns, reviews to occur, and discussions and deliberations yet to be had, unit leaders are anxious to start their budget thinking for next year. So that this can occur, I have recommended to vice chancellors to begin their preliminary thinking around a 15 percent reduction to unrestricted general fund support in FY21. Obviously, that is just an early estimate of the need for reductions at the unit level at this stage in the process.
I have asked Provost Prakash and VC Queen, co-chairs of the Planning and Budget Committee (PBC) to initiate meetings to evaluate the current plans, recommendations, and unexplored ideas to meet the FY21 budget target. Though it may feel early at this stage, I have also asked Provost Prakash to start the process of soliciting FY22 strategic initiative proposals for review by the PBC.
Please keep sharing your good thinking.
Thank you for choosing UAF.