Monday messages

KU's Budget Outlook

Dear Colleagues:

The newspapers have been full of dire economic news lately, and experts have concluded that the country is in a recession.  Whether the economy has slumped because of the trauma of September 11, or the lack of consumer confidence, there seems little question that we will struggle economically this year.

Kansas is affected by the economic downturn, and the news out of Topeka has become increasingly discouraging.  As the Legislature begins planning for the 2002 session, which begins in January, three prominent numbers emerge. First, state revenues for FY 2002 will be $113 million less than anticipated.  Two, the Senate president has reported that commitments for FY 2002 and FY 2003 exceed the funds available by $375 million.  Third, the Governor explained Friday to state agency heads that the shortfall in the FY 2003 budget is $225 million.

The state's budget director, Duane Goosen, announced two weeks ago that his recommendation would be no new money for anything in higher education.

What will be the effects on KU?  If no new money were added to KU's budget, we would have to limit our spending in order to reallocate funds to pay for the salary increases authorized last year but only partially appropriated. Ensuring your base salary must be a priority.

It provides little solace, but most other states are experiencing the same kinds of difficulties.  Missouri and Ohio recently cut university budgets by five percent.  Iowa has cut university budgets four percent.

Whenever a budget crisis occurs, two responses emerge.  The first is to cut expenditures so that you can balance the budget.  By law there can be no deficit spending in either the KU or the State of Kansas budgets.  The second is to look for ways to increase revenue.  Usually this takes the form of tax increases, tuition increases, fee increases, additional private gifts, or additional federal grants and contracts.

The right combination of these two actions - reduced expenditures and increased revenue - is what the university searches for.  It does so because the long-term goals of the university transcend the ups and downs of the budget for any given year.  It is critical that we not lose sight of our goals while we are dealing with the current crisis. KU will be spending the next few weeks trying to figure out which combination of expenditure reduction and revenue enhancement will be necessary to protect the quality of a KU education.  You will be a part of that dialogue because you know where expenses can be cut, and you have ideas about increasing revenue.  I ask you to think about both sides of this equation and let me know your thoughts.  In the meantime, we will await specific word about the Governor's budget recommendations and what actions will be imposed.

As you are considering this dilemma, I would like to comment on another economic issue that the university faces, support of GTAs.  GTAs are vitally important to KU, and they teach or assist in teaching about 20 percent of lower division instruction.  The average GTA salary at KU is $9,946, plus free tuition, plus $276 in campus fees, plus $342 in health insurance.  When the value of the tuition waiver is added in, the average pay for out-of-state GTAs is $14,857 for a maximum of 20 hours per week over a nine-month period.  The average pay for in-state GTA's is $11,924.

The Union would like the salary to be higher.  So would the university.  The GTA salaries, like faculty and staff salaries, are ten to fifteen percent below KU's peers.  The university has the same interest here as the GTA's. The better GTA's are paid, the more competitive KU can be in securing the best and brightest graduate students.

The problem becomes, how can we raise GTA salaries in a year in which the state has said there will be no new money, budget cuts are imminent, and faculty and staff salaries are not likely to be increased.  The university stands ready to work with the Union toward increased salaries, but clearly the state economy makes it difficult.

I pledge to you that we will work hard in this difficult year to secure the best appropriation possible from the legislature.  I know it is discouraging, but I ask that you not lose sight of our larger goal of national recognition for KU's outstanding education and research.  The budget crisis will be painful, but it will pass; our belief in KU and its commitment to excellence must remain strong.