OU budget committee projects $15.7M budget 'gap'

Ohio University's Budget Planning Council (BPC) laid out a set of budget assumptions last Friday for the upcoming year that includes plans for $750,000 in faculty raises and 3.5 percent tuition and general fee increases.

The BPC reviewed the university's key revenue and expenditure drivers all fall quarter and prepared the assumptions to recommend to OU's President Roderick McDavis. McDavis will decide upon the final assumptions sometime this winter, taking into consideration BPC's recommendations, said Rebecca Watts, chief of staff for McDavis.

If these assumptions are approved, the university will be looking at a $15.7 million funding gap that must be resolved through budget reductions and/or revenue enhancements, according to Rebecca Vazquez-Skillings, OU's assistant vice president for budget planning and analysis.

"In general, I think what BPC tried to do with this is to balance things," Watts said. "President McDavis has not rendered a decision based on these assumptions yet, though."

As for university revenue, the submitted budget assumptions plan for no enrollment increase for fall 2010, a 3.5 percent tuition and fee increase, no change to graduate instructional fee or non-resident surcharge, a loss of $9.5 million in federal stimulus money, and a loss of $10.4 million in state share of instruction, Vazquez-Skillings said.

"What we know is that the number of high-school graduates in Ohio is on the decline," Watts said. "But the flat enrollment does mean matching the highest enrollment ever in the history of this institution."

Though the plans project the 3.5 percent increase in tuition and fees for fiscal year 2011, the BPC continues to review the ratio of tuition to general-fee increases. While general-fee money can be used for university operations such as Student Health Services and Intercollegiate Athletics, tuition money is restricted to mainly academic functions of the university. The university's Board of Trustees must approve any increases to tuition and fees.

On the expenditure side, BPC planned for $750,000 in additional Vision Ohio investments in faculty salaries contingent upon meeting the fall 2010 enrollment estimates. The body also projected up to $1.2 million to support additional faculty lines based on instructional capacity needs caused by enrollment growth, Vazquez-Skillings said. This year, OU's Athens campus enrollment grew by 681 students.

BPC also budgeted for $1 million in targeted Vision Ohio investments.

On top of the $750,000 for investments in faculty salaries, BPC recommended a 2 percent merit increase pool for faculty and administrators, 2 percent increases for classified non-bargaining unit employees and a 2 percent increase to support graduate, research and teaching assistants.

The body also planned for a 9 percent increase in the cost of health benefits, but opted not to pass that increase along to OU employees. Last year, McDavis approved a controversial $2.1 million cut to employee health-care benefits that went against the recommendations of Faculty Senate.