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University plans for budget cuts

Faced with the possibility of substantial budget cuts in the coming year, President Mary Sue Coleman told the Board of Regents the University is prepared to make tough choices that will allow for expenditure reductions while not compromising the quality of education at U-M.

Coleman further noted the need for a cooperative spirit following Gov. Jennifer Granholm’s Feb. 19 announcement that public universities will bear a significant portion of cuts in her 2003-04 budget. “We are going to work closely with the governor and the legislature to manage our share of the cuts to university general fund appropriations,” Coleman told the regents. “We will do our fair share.”

It is important to preserve the core quality of the classroom experience and the academic environment for students, Coleman said. U-M will “minimize the tuition burden for our students and families as much as possible,” she said.

Another challenge is to demonstrate to state residents that universities in Michigan allocate state funding efficiently and that “the money the state invests in its public universities is crucial to Michigan’s long-term economic recovery and well-being.”

During the Feb. 20 meeting, Paul N. Courant, provost and executive vice president for academic affairs, outlined some ways the University will reduce costs. He said administrative units are being asked to plan for general fund cuts in the coming budget year of up to 6.5 percent and academic units are planning budget reductions of up to 6 percent. The reductions will be needed to compensate for a state appropriation that is projected to be significantly less than it was in FY 02 and FY 03.

The FY 04 cuts would come on top of FY 03 reductions announced in December and on Feb. 19 totaling 3.5 percent, or a $12.7 million cut for the general fund of the Ann Arbor campus, Courant said. Courant said the University will not increase tuition during the remainder of the current academic year.

All units on campus are seeking ways to cut back on current activities and programs while protecting essential activities, Courant said. “Our first priority will be to protect the quality of our students’ learning environment—now and in the future,” he said. “At the same time, we must continue to make a Michigan education accessible to the students of the state.”

“We will protect financial aid from any cuts,” he said, “and we will continue our policy of meeting the financial need of all resident undergraduate students.”

He said the University is looking at all areas, large and small, including: eliminating nonessential travel; holding positions open; reducing the number and use of departmental vehicles; lengthening the replacement cycle for computing equipment and furniture; adjusting thermostats and turning off lights; reducing the use of temporary employees; eliminating or reducing overtime; determining appropriate minimum sizes for classes and determining where it is possible to teach fewer sections with larger enrollments without significantly reducing learning quality; and more.

The need to decrease expenditures is occurring at a time when demands on the University are increasing, he noted. “We have more students and more sponsored research than at any time in our history,” Courant said. “Overall, the cost of what we are doing this year will be close to $50 million higher than last year, prior to any cuts.”

Already, the University is making some of the necessary changes, he said. “We have realized economies in purchasing and in utilities that amount to well over $10 million a year relative to what we would be spending without improved management,” Courant said.

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