Faced with a forecast of declining operating budgets, The University of Texas at Austin has begun implementation of a plan to make budget cuts totaling about $14.6 million in annual recurring expenditures.
More than 90 percent of the cuts come from administrative units. These cuts in the administrative portfolios range from 8 percent to 1 percent. Only about one-half of 1 percent come from academic colleges and schools. The university's cuts involve recurring expenditures so they affect spending beyond the next fiscal year.
In addition, the plan calls for vice presidents and deans to re-allocate funds to support a 2 percent merit-based salary increase for staff and faculty in the next fiscal year. Staff and most faculty members did not receive salary increases this year.
"The university began last summer to address budgetary challenges that will require a re-allocation of funds to address institutional priorities," said William Powers Jr., president of the university. "Because little or no budget growth is seen in our long-term forecast, we must reduce our expenditures and strategically re-allocate our resources. Making these budget decisions now enables vice presidents, deans and unit heads to plan more effectively for the next fiscal year, which begins Sept. 1.
"Our primary goal has been to protect the core missions of the university--teaching and research," Powers said. "This implementation plan is an important first step. However, because we do not foresee a marked increase in funding in the future we will continue to closely examine our expenditures and seek strategic opportunities to re-allocate funds to enable the university to continue to make progress. This remains a long-term initiative.
"This plan enables us to be well-prepared for financial developments and challenges that may lie ahead," Powers said. "While making these kinds of budget cuts, and those we may be confronted with in the future, we will try to maintain the highest educational standards and quality programs as these decisions are considered. I fully understand the impact these budget reductions have on the people of our university community."
The academic and administrative units have been permitted to phase in budget reductions between Aug. 31, 2010 and Aug. 31, 2011. Some units may choose to move forward immediately.
When the budget reduction plan is fully implemented, about 200 positions in the administrative units could be affected, according to Kevin Hegarty, vice president and chief financial officer. Included in the total are about 125 positions that have already been eliminated campus-wide in the past year. Seventy positions have been eliminated by restructuring in Information Technology Services. More positions in academic units will be affected in the future when deans implement their own re-allocation plans to accommodate budgetary constraints.
"We hope the reduction in work force can be implemented predominantly through retirements and attrition," Hegarty said. This is aided, he said, by the phased approach to implementation.
Administrative units have reduced or eliminated expenditures in operational areas such as travel, equipment, supplies and services, and printing and mailing.
"It is essential that we set aside funds to reward excellence in our faculty and staff," Powers said. "If we don't do that we won't remain competitive and retain the best talent available. We remain committed to pursuing our goal of becoming the leading public university in the nation."
The university has been engaged since 2003 in an initiative to reduce costs and improve efficiency, Hegarty said. It has saved about $50 million annually through programs to centralize services such as purchasing and significantly reduce power, heating and cooling costs.
"Our administrative costs as a percentage of our overall budget remain among the lowest in higher education," Hegarty said. "These continuing efforts and other new cost-saving initiatives will ensure we remain lean administratively and are good stewards of the public's money."
View the university's budget reduction plan (PDF) for 2010-11.