Facing $10 million budget hole, OU braces for big cuts

With at least a $10 million budget deficit looming for next year, Ohio University President Roderick McDavis earlier this week sent an e-mail to all Ohio University students and faculty outlining the three-phase process by which the university will try to cut its spending.

"By communicating openly about our budget process, my hope is to alleviate some anxiety, begin to move conversations forward about where we should go from here, and encourage faculty, staff and students to share their ideas on how we can close this gap," McDavis wrote.

The first phase of the process will take place throughout the remainder of fall quarter and into the beginning of winter quarter, the president explained, when all senates, planning units and Budget Planning Council (BPC) will be asked to look at areas where they can cut spending and increase efficiencies. These bodies will also be asked to look at ways to increase revenue.

The second phase of the process, beginning mid-winter quarter, he wrote, will ask deans and members of the executive staff to review the suggestions made by the senates, planning units and BPC.

At the end of winter quarter, the third phase of the budgeting process will involve deans, executive staff and senate leaders making recommendations to McDavis about how and where to save money, he wrote. The president will then decide on final recommendations and present them to the Board of Trustees in April 2010.

The university is seeing such a budget shortfall because the state share of instruction (SSI) is dropping by $10 million, McDavis explained. Part of the reason for the decline is the new SSI funding formula based heavily on enrollment growth that OU did not fare well under. Because of the formula, OU is looking to grow its enrollment strategically over the next few years, particularly in the areas of science, technology, engineering, mathematics and medicine.

While OU knows for sure that it needs to cut $10 million to make up for lost SSI funding, McDavis wrote, the university very well could see a $21 million deficit based on increases in utility bills, raises and health-care benefit costs, according to a projected budget outlook for fiscal year 2011. For fiscal year 2012, the deficit could be even worse with a possible $36.5 million deficit, McDavis wrote.