Friday, January 16, 2004

UC to cut budget $6.6 million

University's midyear trim may affect jobs, courses offered

By Kristina Goetz
The Cincinnati Enquirer

UNIVERSITY HEIGHTS - University of Cincinnati must cut $6.6 million from its $800 million budget by June 30 - one of the biggest midyear slashes in school history.

President Nancy Zimpher made the announcement Thursday afternoon at a faculty senate meeting.

"We are confronting what could be termed an economic near-perfect storm," she told the standing-room-only crowd of more than 300. "I have been cautioned about using this literary reference, but I use it here to illustrate a budget environment triggered by a set of circumstances not unlike those encountered by the Andrea Gail."

Midyear cuts are uncommon; UC has seen only a handful in the past 25 years, school officials said.

But the outlook for the 2004-05 fiscal year is already grim.

The best-case scenarios project an additional deficit of between $4 million and $8 million, on top of this year's $6.6 million shortfall, Zimpher said.

Zimpher's budget cut announcement was the second this week from a university president in Greater Cincinnati.

On Monday, James Votruba, president of Northern Kentucky University, announced that tuition at his school could increase as much as 20 percent this fall if Gov. Ernie Fletcher's plans to reduce higher education funding are passed.

At UC, the cuts could have widespread impact for the 14,000 people who work for the city's largest employer. They may pay an even greater share in the cost of their health care, including professors and administrators, Zimpher said.

For students, it could mean cuts in programs, as well as a tuition increase.

"We will do everything we can to constrain increases," Zimpher said of tuition hikes. "But I can't speculate (on how high the increases might reach). Unfortunately, when you have this kind of midyear reduction, it has implications for course offerings and section availability.

"We have instructed our deans to do everything they can to protect course offerings. Will we cut programs in the future? We might. That depends on our academic priorities."

The cuts might also mean staff layoffs, said university spokesman Greg Hand.

"With a cut of this magnitude, (layoffs) are not out of the question," he said. "Every time we have had cuts of this magnitude, there have been positions that have been eliminated."

Since fiscal year 2001, state support to UC has dropped from $160 million to $141 million for the central campus alone. This year, for the first time in school history, tuition and fees provided more of the school's budget than the state.

But two recent factors also contributed to the deficit. Despite welcoming its largest freshman class in a decade, UC fell short of its overall enrollment goal. The university is weathering the cumulative effect of a decadelong enrollment shortfall with its related loss of tuition income.

"Each year, the university assigned a $3.5 million, one-time cut while waiting for an enrollment turnaround," Zimpher said. "We may be getting close to this turnaround, if we continue our coordinated efforts to improve recruitment and retention."

UC's bond rating agency also told the university that it can no longer defer the cost of employees' health insurance.

The university has budgeted a certain amount of money based on its health care contracts, but because of rising prices, it has had deferred millions of dollars in payments every year.

"Ultimately, our goal is to stop playing catch-up and to stop chasing targets to resolve the budget," Zimpher said. "We are at a turning point where we must begin to more proactively plan for our future."

Student government president Ron Ricks said he anticipates a 9.9 percent tuition increase next fall because of current budget conditions. UC students (in-state) now pay $7,623 in annual tuition.

"I'm telling students to expect the worst," said Ricks, a senior from Toledo. "But we're focusing on the 1 percent tax repeal because, like Dr. Zimpher said, there will be a budgetary crisis without that."

Ricks was referring to a proposal in the Statehouse to repeal part or all of the 1-cent state sales tax increase, which Zimpher says would bring the university face to face with even more dire circumstances than it already faces.

Richard Karp, chairman of UC's faculty senate, said he is confident that the university can make the cuts necessary to balance the budget and continue the good things that the university is doing.

"She is showing a tremendous amount of fiscal responsibility by biting the bullet now," he said.


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