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Hoppe answers questions about budget cuts for 2003-2004

February 11, 2003

Facing a projected $511 million shortfall in state revenues, in late January Gov. Phil Bredesen asked all state agencies and departments to plan 2 to 8 percent reductions in their 2003-2004 budgets.

The request led to an immediate freeze in open positions at Austin Peay, as well as widespread speculation about the impact the cuts would have on the University's programs, policies, staffing and even its existence.
February 11, 2003

Facing a projected $511 million shortfall in state revenues, in late January Gov. Phil Bredesen asked all state agencies and departments to plan 2 to 8 percent reductions in their 2003-2004 budgets.

The request led to an immediate freeze in open positions at Austin Peay, as well as widespread speculation about the impact the cuts would have on the University's programs, policies, staffing and even its existence.

In an attempt to dispel rumors and provide factual information, Dr. Sherry Hoppe addressed many of the concerns and questions in a recent question-answer session.

Why are faculty positions always frozen before other positions?
The timing of faculty searches places them at the most critical budget time. With searches underway when the notification of budget shortfalls was received, it was imperative that action on faculty positions be taken quickly. Administrative and clerical positions, filled throughout the year, are dealt with on a different timeframe. Recognizing that faculty positions are critical for instructional purposes, we will make every effort to fill as many vacant positions as possible as soon as we have balanced the budget for next year.

Why are some positions frozen and others are not?
Some positions are funded by state appropriations (E & G-Education and General) and, thus, are affected by reductions from the state. Others are funded through Student Activities Fees (SAF), and those generally are affected only if there is a decline in enrollment or if selected E&G positions are more critical and can be legitimately transferred to SAF.

Still other positions are funded through auxiliary enterprises, such as housing and the child development center. Auxiliary positions must be funded through revenues generated by the auxiliary.

Lastly, a number of positions are funded through grants, which generally are not affected by reductions in state appropriations. This is the case in federal grants like Upward Bound. Exceptions are in grant-funded positions in areas like the Center for Creative Arts, which does receive state appropriations.

Some positions must be filled due to the critical nature of the job, e.g., positions in campus safety. Even in critical areas, a minimal number of positions may be frozen.

Some positions must be filled in order to meet accreditation requirements.

Some positions will be filled because they are in areas of institutional priority. For example, because APSU falls 10 percentage points below our sister institutions in retention, we will fill the new Director of Retention Services position in spite of the freeze. This is critical because of the potential loss of state funding due to attrition, etc. Even so, we may need to fill the position through transfer if that becomes our only option.

Which staff positions have been frozen or were frozen after the budget news was received from the State?



In addition to the above positions, more than 25 staff positions were frozen or eliminated in previous budget cuts.

Why are we buying lawnmowers instead of hiring faculty?
The institution's state appropriation includes a separate line item for Maintenance and Operations (M & O). We are required to spend 100 percent of M & O on physical plant functions. By state policy, these dollars cannot be spent on salaries or operating in areas outside physical plant operations. M & O is reduced by the same percentage as the overall institution's budget when impoundments or cutbacks occur, but we are still required to spend 100 percent of the reduced amount in physical plant operations.

Why will maintenance projects be done in Clement and at Archwood when most other renovation work has been frozen?
The final state appropriation for tornado recovery was specifically restricted to Clement and Archwood. The state recently has approved the final projects (soundproofing in Clement, basement water-proofing at Archwood, etc.) using those funds. The funds can only be used for tornado-related projects in those two buildings, and they require approval of the TBR for all expenditures. The funds cannot be diverted to other areas of the University.

Why can some people travel and others cannot?
As described in the question above, different sources of funds have different restrictions. For example, federal grants or student activities may require travel, even when state funded travel is frozen. However, the commissioner of finance and administration has asked state departments to restrict externally funded travel to the minimum required by the source of funding. Thus, even travel funded through non-state sources may be restricted to one person per trip in 2003-2004.

Travel funded by the institution may be for professional development or may be required for business purposes. Although the chancellor has reduced the number of meetings held in Nashville for various sub-councils, some business travel still may be required. Likewise, some travel for accreditation or other reasons will be allowed.

Should we continue to grow when the state continues to decrease our funding?
This is a tough question. If we DO continue to grow, we will have to serve more students with fewer dollars. If we DO NOT continue to grow, the long-term effect is that when the state is in better financial condition we will not be competitive for the new dollars. Plus, the ONLY new dollars we can anticipate in the near future are tuition dollars from increased enrollment.

It is important to remember that the reason we will be able to handle the current impoundment without major cutbacks this spring is that our enrollment growth last fall generated more than $600,000 in tuition revenues that were not budgeted. Consequently, at this point we do not plan to cut marketing, recruiting and retention efforts.

How are decisions made, and who is involved?
Decisions are made with consideration of the following priorities:



The president and the vice presidents conduct the first review of the budget cuts after receiving input from deans and directors. The second review is by the Budget Review Committee (president, vice presidents, chair of the Faculty Senate, president of the Staff Council, president of the SGA and chair of strategic planning).

When will decisions about next year's budget be made? When will we know if our jobs are affected? Is it likely many people will lose their jobs?
We will not know our exact appropriation until the legislature acts on the governor's budget, and that will probably not be until April or early May. However, it is likely that whatever the governor's budget includes for higher education will be the final number. We will have that information in approximately two to three weeks. Then we will make final decisions on cuts and will inform all whose jobs may be affected. We hope to handle most of the cuts through attrition; however, it is likely some jobs may be converted from 12 months to nine months. Should filled positions be cut or altered effective July 1, we anticipate affected individuals would be notified in early April.

Will this never end? Will APSU survive?
Yes, it will end, but we do not know when. It is highly probable that we will endure tight fiscal times for the next 4-5 years. We must once again do more with less, but we must remain committed to teaching and serving our students. Undoubtedly, we will survive. But we must work hard to keep positive attitudes despite inadequate resources. Working together, we can improve the educational level of our region so that in the future tax revenues will be increased as a result of increased incomes.

[Editor's Note: A university-wide update on budget deliberations will be provided later this week.]