Looking Forward in higher education...budget cuts

I spent two days last week participating in a retreat of the Board of Regents. We reviewed strategic objectives for each campus and heard from Presidents on how they would handle budget cuts in Fiscal Year 09 (this current year) and FY10. We asked Presidents to prepare statements on a 2% FY09 base cute and a 3% FY10 cut. The most popular cuts that we heard were:
- maintaining the hiring freeze
- further backlogging deferred maintenance
- financial aid for students.

We asked the Presidents to prepare these numbers in expectation of budget cuts in the current year because of the mid-year estimated budget shortfalls (see previous entry). It is estimated that the Governor will cut just over $220 million this year, and because higher education is such a large share of the discretionary budget, we expected to see cuts.

Since the retreat, we have heard from the Governor's office that we should expect to see a base budget cut of $10 million and a cut from our fund balance reserve of $20 million. While we will see a total of $30 million in cuts this year, the lasting effect on the budget will only be a cut of $10 million from each year out.

Of course, this budget situation is a tale of two cities. The Governor has worked very hard to support higher education, and planned to fund a tuition freeze for undergraduate in-state students at the cost of $16 million and fully funded the rest of the operating budget and capital projects. On the other hand, the system did not raise tuition because the Governor planned to fund the difference; but now with budget cuts, those dollars will now not come to our institutions.

Of course, things will be difficult over the coming months and couple years. A partnership with the Governor's Office is critical to maintaining as much funding as possible for education. Governor O'Malley been very supportive in the past and I do not doubt that he will be in the future.