As I have written before, UCF has weathered the financial crisis better than many other universities. Despite adverse economic conditions, we continue to be an institution of first choice for students, conduct groundbreaking research and attract world-class staff and faculty members.
The economic forecast for our state remains unclear. But when a recovery does occur, I believe UCF will be positioned to move ahead as well as any university in the country.
On Nov. 19, the UCF Board of Trustees approved a plan that addresses the budget crisis and supports recent changes in how we fund colleges and divisions. In this Update, I will explain how this decision further strengthens our ability to rebound from more than two years of budget cuts.
Reserves Vital to Budget Future
Earlier this year, the Board mandated that we remove all one-time funds from our budgets by July 1, 2011, when federal stimulus money will disappear. Unfortunately, UCF will still face a substantial recurring budget deficit at that time, and immediately removing all one-time funds would be difficult.
However, because we have strategically built our one-time reserve funds over the past two years — and because our projections show a steady increase in tuition revenue — the Board authorized a more gradual phase out of our dependence on one-time funds. The plan approved by the Board allows us to continue to use reserve funds to augment budgets until July 2014.
At that time, we project that increased tuition revenues will negate the need to regularly draw upon one-time reserves.
This plan is possible only because we have built up our reserves. If we had not done so, it is very likely we would face more program eliminations and layoffs.
Since additional state-mandated budget cuts are possible, the plan approved by the Board is structured to accommodate a modest budget cut without requiring layoffs or program closures. However, state-mandated cuts of more than a few percentage points would force us to reevaluate how we ensure the university’s long-term success.
With everything we know to date, this plan represents the best way forward for UCF.
New Budget Plan Means More Faculty Hires
The Board also supports a new budget process that replaces the current budget allocation method. Beginning immediately, tuition revenue will be distributed as follows:
- 65 percent will go to colleges. Funds will be allocated based on both current enrollment and enrollment growth.
- 25 percent will go to administrative units. This continues to be the lowest percentage for any public university in the state.
- 10 percent will be used for targeted investments, with most going for academic functions.
This approach to allocating budgets, along with tuition growth and one-time reserves, will allow UCF to gradually begin hiring more tenured and tenure-track faculty while also supporting the instructional and administrative staff needed to operate our university and serve our growing student population.
As the university emerges from the economic crisis, a critical first step to ensure UCF’s long-term success is to hire more tenured and tenure-track faculty members. I am pleased that this plan allows us to do that.
For more than two years, I have been awed at how diligently our talented faculty and staff members have worked. Despite the economic crisis, our entire UCF family has remained dedicated to providing exceptional learning experiences for our students and maintaining the university’s level of excellence.
Since this most likely will be the last Provost’s Update of 2009, let me offer my sincere best wishes to you and your loved ones as we enter the holiday season.
You all have worked very hard to help UCF through these difficult times. Thank you for all you do for our students and university, and I look forward to hearing your thoughts about the new budget plan.