Dean Shares Grim Budget Outlook

UCBA Dean Cady Short-Thompson shared some bad budget news with faculty and staff of the college last week.  As she explained things, two negative budget impacts will occur immediately in the current fiscal year and in the years ahead.

First, the Ohio Board of Regents and the university’s Institutional Research offices provide all colleges and universities with an estimate, based on a new and complicated formula, of how much State Share of Instruction (SSI) UCBA will receive in the coming year. The College uses that estimate to predict its revenues, along with tuition and fees from enrollment projections (the College budgets conservatively for flat enrollments, the Dean said). 

This year was the College’s first year in the state’s new formula, which changed to focus more on graduation rates than course completions.  However, 40 percent of the formula focuses on graduation, and UCBA’s graduation rates are not as high as other colleges and universities (because the College is open access and also more than half of UCBA students are transition students who often don’t earn their degrees but transition to Clifton).

Therefore, UCBA has seen a significant decrease in the actual amount of State subsidy funds for this fiscal year.  “To be specific,” she said in an email to faculty and staff, “by June 30, 2015, I will have to close a financial gap of $1,136,472, which is how much less subsidy we will receive from the predicted amount for this fiscal year.” 

Additionally, because subsidy calculations are on a rolling three-year average, UCBA can now also expect to have this reduced amount of subsidy in the next couple of years.  

The second budget impact comes from the University itself, which hired a consultant to study the overhead rates of the auxiliary units of the University (there are about 10 different units, including UCBA). 

All of these auxiliary units use some of the main campus units, such as General Counsel, Provost’s office, P+D+C, UCIT, and more and each unit pays an overhead rate each year to cover its portion of those costs. Last week UCBA received the new overhead rate (which includes the provost’s fee), and the overhead rate is also an increased amount over what we are currently paying.  

Effective next fiscal year (2016), UCBA will have to pay an additional $440,520.  The following year (2017), the College will pay $596,222. And in 2018, it will pay $927,499.  The last amount ($927,499) is the amount the consultant determined UCBA should be paying immediately; however, the University arranged for a gradual, three-year increase (which is a good thing, the Dean said). 

“This process has been very specific and transparent,” she explained, “we can see who is paying what—which we’ve never seen to date.” However, the factors combined, in her words, for a “nasty financial picture for us over the next three years.”

It all means that UCBA will have $1,136,472 less money this year (FY 2015), $1,576,992 less next year (FY 2016), $1,732,694 less the following year (FY 2017), and $2,063,971 less in FY 2018.

The Dean says that she is certain that the College “can weather all of this but we’ll….need to be even more frugal, strategic, and creative….All budget managers will need to examine their budgets closely for any non-essential expenditures as well as more affordable solutions to meet our college’s needs.  We will also need to work hard in enrollment management, development, grant-writing, and alternate funding sources….We are heading into some lean years.”