University prepares for $73.8 million budget reduction

The clouds of uncertainty looming above the University grew darker last week as University administrators received orders from the state to prepare for an even more dire budget situation.

In a memo to faculty and staff Thursday night, Chancellor Michael Martin announced the administration has been ordered by the state to prepare for a 35-percent cut, equivalent to a $74 million decrease in the University's operating budget for the 2011-12 fiscal year.

By Friday, top administrators were confused and dismayed by the memo because of what Martin called discrepancies in the formula used to make the projections.

The base funding the University receives from the state is $194.2 million, according to University administrators. Using this figure, a potential $74 million cut accounts for 38 percent.

"I'm not sure what they expect us yet to do," Martin told The Daily Reveille on Friday. "I'm going to await greater direction."

These numbers are only projections from the Board of Regents, designed to allow the University to begin planning for the next cut. These projections will remain hypothetical until the state begins work on next year's fiscal budget in early 2011.

"I think what they did is they did some rather marginal math," Martin said. "What they presumed to be 35 percent turns out to be 38 percent. There's been such enormous turnover that people [who] may have known what [the budget number] is are no longer there. And they're winging it."

Robert Kuhn, associate vice chancellor for finance and administrative services in the Office of Budget and Planning, said the discrepancy could have resulted from confusion over what exactly constitutes state funding. There is no single number for how much the state gives — the money comes from multiple funds and other sources lumped together as "state" funding.

The Budget Crisis Committee, a cadre of academics and administrators chaired by newly installed Provost and Executive Vice Chancellor Jack Hamilton, deals directly with these projections and assembled a three-tiered plan during the summer to implement cuts in the next fiscal year.

Originally, the committee used the LSU System's June budget cut projection of 23 percent from the operating budget — translating to $46 million in cuts. That number is now obsolete, given the new $74 million  projected reduction issued last week.

"The consequences of an additional cut of this magnitude would be catastrophic to LSU," Martin said in last week's memo.

The University has until Sept. 15 to submit a new report detailing how it could go about making what Martin called "an extraordinary reduction in funding."

The new projection is 12 percent more than what the University's three-level plan is currently designed to eliminate.

"To reduce the University's budget by 35 percent would be ruinous to LSU for generations," Martin said in the memo.

Before the revised projections were released Thursday, the committee organized its plan for budget reductions by dividing all programs and aspects of campus into three levels.

Level Three programs directly impact instruction, the "academic core." Level Two programs are those supporting the academic core but not directly related to students, including research programs, institutions and centers. Level One programs are those which do not directly impact students' classroom experience, including custodial staff and maintenance.

After dividing all campus units into the levels, the committee asked for student, faculty and staff input on the contents of each level. Hamilton said the input impacted some of the plans.

With the levels established, the committee then began to look for programs within each level that could be eliminated with the least damage to the student experience. The committee identified enough in each level to reach the $46 million June projection.

In June, the committee selected a total of about $9 million to be cut from Level One, $16.6 million to be cut from Level Two and $20 million from Level Three.

The programs selected for possible future termination within Levels One and Two have been made publicly available, but the committee has not yet released the detailed department and personnel cuts for Level Three.

Hamilton said those figures would not be released for fear of causing panic and flight within the departments on the list, losses that could be for naught given uncertainty about the size of the eventual cut.

Hamilton declined The Daily Reveille's requests for access to the Budget Crisis Committee meetings.

The committee has been forced to increase its projected cuts given the new $74 million figure. Hamilton said it's likely most or all of the additional cuts would have to come out of the academic core, for a total of $48.2 million.

Proposed cuts to Levels One and Two would remain as they are, as most of the University's funding is in the academic core, and the committee has already made cuts to the other levels, Hamilton said.

If these now hypothetical cuts materialize, Hamilton and Martin said financial exigency, the equivalent of academic bankruptcy, will be inevitable.

Hamilton said the $48.2 million cut from Level Three would be the equivalent of eliminating eight of the University's 14 specialized colleges. If the projections become reality, then the cuts would take place across campus, even allowing the elimination of tenured professors.

Although the future looks bleak, Martin and Hamilton said the student experience of the University has been largely saved for this year.

"I think we are committed to this academic year and providing all the possible requirements," Martin said. "Next academic year, you'll see some of those impacts. The last area that we intend to impact is the student experience."