UA President Robert Shelton explained during the Faculty Senate meeting on Monday that cutting operating expenses and taking funds from university reserves would be the main options to survive budget cuts.
Shelton said that he and his colleagues have been actively planning for the 2012 fiscal year since the state was looking to reduce investment in higher education. He explained that for the past couple of years, the university has limited hiring, lost more than 600 staff members, appointed more outside personnel and looked at ways to reduce overhead while increasing consolidations and efficiency.
“”As we reduce our expenditures, we’re eliminating people,”” he said.
Shelton explained that in order to survive the proposed $78 million budget cut from the state Legislature, $39 million must be permanently cut from the university’s operating budget, which he said meant eliminating university employees.
In addition, Shelton said that $17 million out of the $28 million in reserves would be used to close the remainder of the budget gap.
“”This still doesn’t solve the problem,”” he said, because “”certain costs go up no matter what you do.”” Employee related expenses are an example of one of these costs.
Provost Meredith Hay said that all colleges and units within the university would be affected by budget cuts.
“”Right now, from my perspective, state dollars are (temporary) dollars,”” she said.
Hay added that the university must “”rethink”” the environment that it is living in, and that it should focus on increasing endowments.
Shelton also addressed financial aid, saying that the UA will pledge to maintain its level of support for fiscal year 2012 if the Arizona Board of Regents approves the tuition increases.
He explained that $160 million of awarded financial aid was the UA’s “”own money”” from grants, gifts and tuition, not federal dollars. The two “”large pots”” of money left are employee salaries and financial aid, he said, and reducing either would not be a “”good choice.””
Shelton added that fiscal year 2013 “”should be a relatively stable year for the state of Arizona”” with income coming from places like Proposition 100, a temporary Arizona sales-tax increase that was approved by voters last May. However, he did say that there would be another tuition increase for fiscal year 2013.
“”Sorry, but we’re going to keep it as low as we can,”” he said.
Shelton reiterated that financial planning for next year is a “”balancing act.””
