April 4, 2002
Budget discussion begins
Gov. Gary Locke is expected to sign the 2003 budget bill into law soon. That means UW officials, after a grueling legislative session, can finally turn their full attention to planning the campus’s next fiscal year budget.
That will be no easy task.
The UW will have to work with a final state budget that likely cuts the campus operating budget — including money for pay raises — by about $24.6 million, or 6.8 percent. Lawmakers did allow for greater tuition-setting authority next year, which will help balance the books.
A series of discussions on how best to absorb the cuts begins today when all UW faculty are invited to a special Faculty Senate meeting at 4 p.m. in the Walker-Ames Room at Kane Hall. That will be followed by Board of Regents meetings on April 23 to discuss tuition and financial aid and again on April 29 to receive the draft budget. President Richard L. McCormick and Provost Lee Huntsman will host an all-campus budget discussion on May 2. Those events lead up to a May 16–17 meeting when Regents are likely to approve the final 2003 budget.
“We want to update the faculty as to what’s going on,” Faculty Senate President Brad Holt said, referring to today’s meeting. “There are University-wide decisions that are going to be made, but folks at the individual college level, particularly faculty members of college councils, are going to have to deal with those decisions. So they need to be informed.”
While much of the talk at the various budget sessions on campus will be about dollars and cents, there will be implications for the UW’s mission and its national reputation as a leading teaching and research university. Continued investments are needed to keep top faculty and students on campus, to keep research dollars coming, and to keep facilities competitive with other institutions.
Perhaps the most glaring problem budget makers face is how to deal with faculty salaries that are already lower than they should be. UW faculty are paid less than most of their peers at similar institutions.
For example, the Office of Financial Management designates eight institutions similar to the UW for the purpose of comparison. In 2000-2001 faculty at the UW were earning, on average, about $73,000 annually. Faculty at the other institutions were earning, on average, $82,500. That means the UW would need a more than 14 percent increase in salaries just to reach the average.
Maybe even more telling is the fact that when faculty left the UW during the 1999-2000 academic year, their salaries shot up on average by $40,500. If the University is to remain a national leader, it needs to be able to pay competitive salaries. The administration and the faculty adopted a principle in recent years to give “minimum meritorious” pay increases of at least 2 percent annually, whether or not state funding was available.
That will be a challenge this year. Honoring the principle by giving the raise is likely to cost some combination of layoffs and programmatic cuts. But setting aside the principle for fiscal reasons would make the UW’s salary structure less competitive than it already is. Discussions of how to resolve the issue are already under way in the faculty and administrative budget committees.
“I wouldn’t anticipate zero layoffs and I wouldn’t anticipate large-scale massive layoffs,” said UW Vice Provost for Planning and Budgeting Harlan Patterson. “Unit leadership has been developing contingency plans for months now, knowing that budget cuts would be coming.”
Many current and some future vacancies are likely to go unfilled, according to Patterson. In fact, Huntsman sent a directive to unit heads in February that puts the UW in a virtual hiring freeze.
Perhaps the best news from the recently completed legislative session is that the University gained some tuition-setting freedom. For the 2002-03 academic year, the Board of Regents will be able to increase tuition by up to 16 percent for resident undergraduates. There are no limits for nonresidents or for graduate and professional students. Currently the bill for tuition and fees for resident undergraduates at the UW is 15 percent less than what is charged at the 24 institutions considered peers by the state’s Higher Education Coordinating (HEC) Board.
A 16 percent increase for resident undergraduates would bring in an extra $10 million to help offset the UW’s $24.6 million budget shortfall. But it’s unlikely things will be that simple. UW officials want to set up the right kind of tuition structure that will work for the long term. That end result, Patterson says, will be guided by three principles — predictability, accessibility, and the idea that those who can afford to pay more should pay more.
Predictability refers to a tuition structure that is stable enough that students and the University can count on steady increases but have little or no fear of dramatic hikes like the one that could be imposed in the coming fall. The idea is that it will help both sides budget more accurately. In terms of accessibility, officials have said emphatically from the start that any tuition increase would be accompanied by an increase in scholarships and financial aid for students.
The idea that some of the students at the UW can afford to pay more is backed up by numbers. For example, the median family income for students newly enrolled during the fall quarter of 2001 was $64,500 and more than 40 percent of those students are from families with an income of more than $75,000. Fifteen thousand of the UW’s 26,000 undergraduates, or 57 percent, don’t even apply for financial aid.
But how the principles that Patterson referred to play out in terms of a UW budget is hard to determine.
“It’s easy to talk theoretically about principles, but it’s going to be more difficult to put those into practice,” Patterson said. “There’s a lot of agreement on the broad principles, but there are more variables now.”
Patterson said there will be broad input on the preliminary budgets. Undergraduate and graduate students; deans and the faculty senate; and administrators from Seattle, Bothell and Tacoma will have an advisory role throughout the draft budget process. That input is imperative, according to Patterson.
“The specifics of the cuts are decided at the unit level,” he said. “The directors are going to understand the best way for their respective units to operate under any given circumstance, so it’s important that this be an open process.”
It’s too early to know exactly how the University will respond to the budget deficit, but potential effects include reductions in: the number of faculty and teaching assistants, the number of class sections offered, the diversity of classroom subjects, and various administrative services.
“Whatever we do, we want it to be something we can live with for the long term,” Patterson said.
