Although the current Legislative Session won't officially conclude until 6pm tomorrow, controversial issues associated with the State budget for the upcoming fiscal year appear largely resolved. With House Bill 1, the State's budget for the new fiscal year beginning July 1, approved by the Legislature and awaiting the Governor's final approval, it now seems likely we will avoid the worst-case budget scenarios discussed and debated in recent months.
As a result of approved increases in our tuition and fees, in combination with various budget solutions crafted by the Administration and Legislature, the loss of approximately $16 million in temporary Federal stimulus funds from next year's operating budget has been largely mitigated. However, continued implementation of a new funding formula as well as increases in mandatory operating costs negatively impact our financial resources.
The bottom line is we expect our fiscal circumstances next year to reflect a relatively modest reduction in net operating resources relative to the 2010-11 budget. The good news is that the GRAD Act provides an opportunity for our tuition resources to continue to grow in future years, contingent upon our continuing to meet required performance goals.
As you know, over the last couple of years, our university has absorbed multiple budget reductions totaling approximately $16 million. As a result, we have had to move quickly and aggressively to reduce spending in order to sustain critical operations while maintaining a balanced budget in the face of declining State support. The pace and magnitude of State funding reductions have meant that our traditional strategic budget planning processes have been largely supplanted by ad hoc efforts to identify and implement the necessary cuts.
Given the relative stability that now seems likely for next year's operating budget and the importance of utilizing limited resources to help ensure successful achievement of GRAD Act performance goals, I believe it is important that we move forward with our strategic budget planning process.
Accordingly, in the weeks ahead the Vice Presidents will coordinate budget planning discussions with budget unit heads within each of the Divisions. This process will guide the allocation of resources for next fiscal year.
As part of the budget planning process, budget unit heads should anticipate the following:
With the exception of vacant positions for which searches are currently underway, vacant faculty and staff lines will be eliminated. Allocation of new positions will be based on strong justification supported by GRAD Act and university strategic priorities.
Units will receive a base-line “roll over” beginning operating budget for next fiscal year equal to the reduced level of funding at the beginning of the 2010-11 fiscal year. As part of the budget planning process, budget units will have the opportunity to allocate these funds across expenditure categories based on rationale and justification supported by GRAD Act and university strategic priorities.
Additional operating resources beyond base-line levels will be allocated based on strong justification supported by GRAD Act and university strategic priorities.
I look forward to working with budget unit heads and the Vice Presidents to construct an operating budget for next year that supports our continued achievement of GRAD Act performance objectives and institutional strategic priorities, and thereby creates an environment conducive to our students' ultimate success.
As the Legislative Session concludes later this week, we will provide a more detailed campus update on legislative results, including more specific information about implications for Southeastern's budget.