U-M prepared for current state budget cuts,
concerned about future funding
Provost Paul N. Courant says the governor’s announcement that he
will slash 2.5 percent in state appropriations mid-year for colleges and
universities will be manageable in the short run. Gov. John Engler’s
plan for balancing the state budget will cost the University about $9
million out of an anticipated state aid budget of $364 million for the
current fiscal year, Courant says. The estimated savings from all higher
education cutbacks is $55 million in a state budget with a projected $500
“The state’s budget concerns are enormous, and we know that
these are very difficult decisions for the governor and the Legislature
to make,” Courant says. “The proposed cuts do not come as
a complete surprise, and we have been taking steps to prepare for them.
Nonetheless, dealing with this budget cut presents significant challenges.”
Courant says the University will manage the mid-year cutbacks by continuing
to shave costs and by postponing a number of expenses: deferring maintenance,
holding positions open, limiting travel, and reducing or delaying the
purchase of supplies and equipment.
“We are asking campus departments to tighten their belts and do
the best they can with less in the short term, and we can do this without
permanent harm to our academic quality,” Courant says. “We
also have continued to look for economies in our administrative areas
and business operations in order to minimize the impact on our core academic
activities. We will be able to handle this short-term cut without any
mid-year increase in tuition.”
Courant says the biggest concern is for the next fiscal year.
“If the budget cut is permanent or goes even deeper next year, a
strategy that relies in part on postponing expenses is no longer workable.
We would have to make more permanent reductions in both our administrative
and academic units,” he says. “In the long run, that will
have an impact on our academic strength and quality, affecting class size,
availability of courses and student services, and the like. It will also
place upward pressure on tuition.”
Courant says he has been meeting with deans and administrative units to
discuss plans for handling a mid-year rescission and possible budget scenarios
for next year. He expects to make a final report in a few weeks on the
University’s plan to handle the mid-year cuts.
Engler’s executive order, announced Dec. 5, also calls for a 3.5
percent cut in revenue sharing to local communities and a 2.5 percent
across-the-board cut in state departments. Engler is required to balance
the budget before leaving office.