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Planning underway for FY2005 budget cuts

The University continues its efforts to respond to reductions in state support while protecting its core academic activities, Provost and Executive Vice President for Academic Affairs Paul N. Courant said May 20 in a budget update to the Board of Regents. He said further budget-cutting measures will include reductions in faculty and staff positions—many through attrition—and cuts affecting units throughout campus.

Courant said both state funding and contributions from the newly launched The Michigan Difference fund-raising campaign are essential to the University's ability to sustain itself as a leading public research university.

"In an environment of reduced state funding, philanthropy becomes even more important, but it can never be expected to entirely support our ability to provide an education that is among the best in the world," he said.

Between the current budget year and the coming fiscal year, which starts July 1, the state will have reduced the base appropriation for the Ann Arbor campus by about $43 million. One-time cuts to date total an additional $29 million, including a $16 million cut in December 2003.

Courant estimated the total budget gap for the Ann Arbor campus in FY2005 will be at least $50 million. The shortfall comprises not only lost state revenue but includes necessary cost increases for items such as salaries, utilities and other commitments, as well as funds to support essential initiatives. After factoring in other sources of revenue, U-M will have to cut about $20 million out of its expenditures for the coming year.

The provost said budget-cutting measures include eliminating 120 staff positions campuswide through a combination of attrition and reductions in force. The staff cuts come on top of 275 regular staff positions lost last year. Faculty will be reduced through attrition by 40, in addition to the 50 positions cut last year.

Courant described to regents some specific cuts that are planned by campus units in response to the budget constraints for FY2005.

For example, he noted, the Information Technology Campus Initiatives (ITCI) is being dissolved for a savings of $1 million. ITCI, part of Information Technology Central Services, was created to encourage and develop information technology that would improve the learning environment throughout all academic units. The remaining $1.5 million of the ITCI budget will be used to support collaborative learning initiatives and will be administered by existing staff in other offices.

A three-term course sequence in the Sociology Department, designed to teach students field research methods, also is being eliminated for a savings of $170,000.

Building Services personnel are being moved to the day shift, and offices will be cleaned less frequently—every other week rather than weekly—to reduce overtime and shift premiums, saving $881,000 in Plant Operations. Similarly, facilities maintenance work will occur during regular business hours, except for emergency work, for overtime savings of $40,000.

Although these measures will create significant cost savings, they may result in increased inconvenience for faculty and staff as maintenance and cleaning crews conduct their work during the day, Courant said.

In addition, the Periodic Health Appraisal Unit (PHAU) was eliminated along with 3.5 FTE positions, for a savings of $400,000. The unit provided periodic physical examinations at no cost to faculty, senior administrators and some retirees. Courant said the savings are possible because all University health insurance plans now offer this benefit.

Additional cuts already implemented or that will take place in the fall include:

• The Business School reduced the number of sections of certain courses and raised the enrollment caps on others. The result is 32 fewer sections of courses, 25 fewer adjunct supplemental faculty members and a savings of $1.5 million. Similarly, other academic units across campus are reducing course sections, increasing course sizes, and reducing reliance on adjunct and visiting faculty;

• Departments are bringing fewer visiting faculty and guest speakers to campus. Similarly, funds have been reduced for faculty travel for purposes of research and scholarly activity;

• Units are cutting back on publications and newsletters;

• The University Library expects to cut journal subscriptions by 1,000 titles and monograph purchases by 5,000 titles. Service hours at some of the campus libraries will be reduced;

• Departments are reducing their use of temporary personnel to fill vacancies left by staff members on sick leave or vacation, as well as open positions that haven't been filled yet. Many vacancies will be held open indefinitely, or the open positions will be eliminated;

• Computer replacement cycles continue to be extended, which means departments must make do with older computers and related technologies. Some schools have postponed planned upgrades to their instructional technology.

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