To the Campus Community:
Despite a 3.8 percent increase in Georgia's net revenue collections for June 2010 (the final month of FY10), revenues dropped 9.1 percent over FY09. As a result, the Governor's Office of Planning and Budget (OPB) advised all state agencies that beginning in August, OPB will withhold 4 percent of the monthly agency allocation.
In addition, current economic conditions have necessitated that the state utilize the last of the federal stimulus funding to offset budget deficits, thus leaving none of this stimulus funding available for use in FY11. As a result of this loss and the additional 4 percent cut, Georgia Tech will begin this current fiscal year with a $12.2 million reduction in the FY11 budget. This is in addition to the cuts sustained by Georgia Tech over the past two fiscal years, which have totaled $67 million, or 24 percent of the total state appropriation base.
While this is certainly not good news, in anticipation of continued declines in revenues, we have been tracking the state revenue numbers and preparing for the possibility of reductions in both the FY11 and FY12 budgets. In response to the request from the University System of Georgia, we are assessing the impact of these reductions to our state allocation and preparing budgets that incorporate 4, 6 and 8 percent reductions to the original FY11 budget, for submission to the Board of Regents in early August. It is important to note that these reductions are to the state appropriation, which only provides a portion of our funding, making the actual projected reduction below the 4 to 8 percent range.
We have communicated this situation to the vice presidents and deans and will keep you informed as we develop a strategy for handling the reduction planning. Foremost in our efforts will be to ensure that we preserve the core mission of the Institute while maintaining our investment in the future.
I thank you for your continued patience and support as we analyze the impact of these planning scenarios on the Institute and prepare for the coming year.
G. P. "Bud" PetersonPresident, Georgia Tech
To the campus community of Georgia Tech:
During its monthly meeting yesterday, the University System of Georgia's Board of Regents (BOR) set tuition and fees and also approved budget allocations for the upcoming fiscal year, FY11. I want to take this opportunity to explain our current financial situation, the BOR actions, and the impact of those actions.
At this point, the Georgia General Assembly has completed its work and the amended budget for FY10 has been signed by the governor. In addition, while the proposed FY11 budget is in the hands of Governor Perdue, there is still some uncertainty with regard to how the budget will be apportioned and if furlough days will be required as part of the overall plan. We anticipate that these questions will be resolved by the BOR and the chancellor in the next few weeks. The information we have been provided, however, does allow us to complete our plans for the current fiscal year, FY10, and begin our planning for the FY11 budget.
The legislature and the governor recently amended the FY10 state budget to reflect the continued downturn in the receipt of state revenues. This was not unexpected and through a combination of additional federal stimulus funds, the mid-year reductions we implemented last fall, and careful stewardship, we appear to be well positioned to close the current fiscal year successfully.
The proposed budget for FY11 forwarded by the General Assembly to the governor for his signature requires the University System of Georgia to absorb additional formula and line item appropriation reductions of $161 million, or 8.1 percent. This amount is partially offset by additional one-time stimulus funding of approximately $23 million, which will have to be absorbed in future years. However, the proposed budget also provides the system new formula funding and cost adjustments in the amount of $126 million.
At yesterday's meeting, the BOR distributed the additional cuts and new formula funding to the individual institutions. Georgia Tech's portion of the appropriation reduction is $5.2 million, but this is offset by federal stimulus funds and additional formula funding totaling $12.3 million, some of which is earmarked for fringe benefits and physical plant cost increases. These additional cuts bring the total reduction for Georgia Tech over the three most recent fiscal years — FY09, '10, and '11 — to $67.2 million, or 23.8 percent of our FY09 base. In addition, it is important to note that the federal stimulus funds we received to date are not expected to be available in FY12 or the following fiscal years.
In a separate but related action yesterday, the BOR also approved a $500 per semester increase in tuition for both resident and nonresident students at Georgia Tech, excluding those students on the Guaranteed Tuition Plan. For in-state students who qualify, this increase will be covered under the HOPE Scholarship program. This tuition increase will move us closer to the market value as determined by comparison with our peer institutions and will provide some limited flexibility in budgeting for Institute programs.
Our current plans are to use the new tuition dollars to preserve and enhance our instructional and student-related activities, address critical academic issues such as the faculty-student ratio and the availability of course sections for our undergraduates, and continue to support the core mission of research.
We believe that the steps taken to date to set aside contingencies and reserves, the additional workload allocation, new tuition revenues, and the diligent efforts of our campus community have positioned us well for the forthcoming fiscal year. These changes will allow us to begin FY11 with a budget that is essentially comparable to how we will end FY 10. However, we still face lean budget circumstances as we enter the new fiscal year, and we all must do our best to ensure wise and careful stewardship of the resources entrusted to us.
In light of the challenging time we all face and the uncertainty surrounding the continued use of furlough days, which will be addressed by the BOR at its June meeting, I have asked the Office of Parking and Transportation to reduce the proposed permit rate increase for a general campus parking permit for the upcoming year from 5 percent to 2 percent. Though a modest saving for the individual, it represents a significant reduction in operating revenue for that program and may need to be reconsidered in future years.
These have been extraordinary times, and we are appreciative of the investments the governor, General Assembly and BOR have made in Georgia Tech. I believe that these investments will allow us to continue to maintain the level of excellence of our education, research, and service mission while continuing to drive the innovations that will facilitate the state's economic recovery. I thank you and want to express my appreciation for your continued support as we work our way through these many challenges.
As I am sure you are aware, last week the Joint Appropriations Higher Education Subcommittee of the Georgia General Assembly, requested that the University System of Georgia identify the impact of a proposed $300 million reduction to the state appropriation. This would result in an additional $38 million reduction to Tech’s appropriation.
Building on the hard work of a number of others, this past weekend members of the executive leadership team and I prepared and forwarded to the System Office a plan that outlines how Georgia Tech could potentially incorporate these additional reductions in our FY ‘11 state appropriations. What we submitted represents our initial thinking at this point in time, and outlines how we might deal with an additional reduction of $38 million on top of the nearly $55 million we have already received over the past two years. Because some of what we have provided to the University System of Georgia is likely to appear in the press, I wanted to provide you some context.
The proposed reduction is significantly greater than we had anticipated and it appears that there is a great deal of discussion regarding the context of the request we received. It is also important to understand that what we submitted, which includes a possible reduction of about 450 positions, was made on the basis of several assumptions imposed by the Committee, including no tuition increases, no formula increases, and several other significantly limiting conditions. As such, it represents a first estimate of how we might respond to the budget reductions being discussed at this point within these restrictions.
To date, we have managed the budget reductions without substantially impacting the quality of what we do. Incorporating the proposed additional reductions will make this considerably more difficult, however this will continue to be our goal—to ensure the quality of what we do, even if it means we must do less.
While I do not believe that Georgia Tech or the University System should be immune from additional budget reductions given the serious and continuing drop in revenue the state is experiencing, rest assured that we continue to do everything we can to impress upon our legislators the long-term implications of a reduction of this magnitude. Higher education, and particularly higher education at Georgia Tech remains one of the best investments the state can make, both in terms of the graduates we produce and the economic development we generate. Our concern is that to enact a cut on the order of magnitude legislators are considering will sacrifice the state’s long-term prosperity in order to help to address what many believe to be a short-term problem.
I hope that this provides some insight into our situation and current thinking. While I realize that words are often of little comfort when faced with the consequences of this magnitude, I want to assure you that we do not take the impact of these proposed actions on our community lightly, and we remain committed to being as open, inclusive and direct as possible.
In the meantime, we will continue to work the issue to develop the best possible approaches to what is a very difficult situation. Thank you for your continued cooperation and support - it is greatly appreciated.
G. P. "Bud" Peterson President, Georgia Tech
To the campus community:
This past week Governor Sonny Perdue issued his proposed budget for FY 2011 (beginning on July 1, 2010), along with an amended budget for the current fiscal year. Over the course of the next several months we will be working with our legislators as the FY 2011 budget moves through the legislative budget process and we will keep you apprised of its progress and how we believe it will impact Georgia Tech. I do, however, want to provide you with our best assessment of how the amended FY 2010 budget will impact our current operations.
Based on the amended budget presented last week, the state budget reduction for the University System of Georgia for FY 2010 will be approximately 8.2 percent, slightly higher than the 8 percent reduction approved by the Regents at its November 2009 meeting. This represents a $21.2 million reduction in FY 2010 for Georgia Tech, and brings the total reduction over the past two years to $55.1 million, or approximately 19 percent of our state funding.
You will recall that last November, the University System of Georgia’s Board of Regents approved two measures to help us meet this $21.2 million shortfall – a mandatory six-day furlough program and a $100 increase in the Institutional Fee for all students. For Georgia Tech, these two measures will yield $6.1 million and $1.7 million, respectively. The remaining balance of this year’s $21.2 million cut – $13.4 million – must come from our current operating budget.
In anticipation of these reductions in state support, earlier this past fall we asked all of the units on campus, both administrative and academic, to plan for a reduction in their FY 2010 general operations budgets of 3 percent. This, when coupled with other measures taken centrally, will allow us to meet the current budgetary shortfall and provide a modest institutional budget contingency for possible reductions in the remainder of the fiscal year. We will continue to work with the administrative leaders of the various units to assist them in minimizing the impact of these reductions.
There are numerous facets to this recession, and while we have developed a way to meet our obligations in the short term, there continues to be a great deal of uncertainty as to when the economy will more fully recover, and the state revenues begin to increase. Until that happens, our goal is to minimize the impact of reductions on our core missions of teaching, research, and public service.
One final note: while we believe that the actions outlined above will allow us to adequately compensate for the reductions, recent media reports have stated that the governor has proposed additional furloughs for all state employees. We are currently working to determine how this might apply to the University System. At this time, we have not adjusted the Institute’s budget reduction plan to reflect additional furlough days. If additional furlough days are mandated by the state or the Board of Regents and we must absorb unexpected additional reductions, we will amend the plan.
We will continue to explore all our options and will keep you informed as these discussions progress.
G. P. “Bud” Peterson President, Georgia Tech
Late yesterday, the University System of Georgia (USG) Board of Regents approved plans to adjust the System's budget from a 6 percent reduction to an 8 percent reduction for the current fiscal year (FY10). The Board's actions will require each of the System's 35 public colleges and universities to make appropriate cost adjustments as well as increase the mandatory institutional student fee.
You may recall that the regents initially approved an 8 percent reduction option as part of their financial planning in August 2009. For Georgia Tech, the 8 percent reduction in the state-funded portion of the FY10 budget will mean a total of $20.3 million in cuts. To meet this target:
The remaining $12.5 million will come from campus reductions and other revenue sources, many of which have already been implemented. We are awaiting further direction from the regents on how the budget reduction will need to be implemented.
The current student fee, set at $100 per semester, will increase to $200 beginning with the upcoming spring semester. It is important to note that this was an option of last resort; an increase would not have been necessary for reduction goals lower than 8 percent. But as state tax collections continue to slide, this action is important to help spread the cost equally among all students.
Higher education is a unique entity. Unlike businesses in a recession, we cannot reduce production and inventory to align with reduced demand. While our resources are shrinking, the demand for our services is rising. In addition, the federal stimulus funding we have received is helping in a number of important areas, however, those funds are not a long-term solution.
With the assistance and support of the entire campus community, we were able to address the prior year reductions with minimal disruption to our daily operations. However, our challenge for FY10 is considerable, particularly in light of the reductions already taken by the Institute. As a result of this latest action, Georgia Tech’s reductions from the original FY09 state appropriations now total $54.3 million, equal to a 19 percent cut over the two-year period.
Since the initial state reductions in the fall of 2008, we here at Georgia Tech have placed an emphasis on preserving its core missions of teaching, research, and public service. To that end the Institute has imposed differential budget cuts on administrative units, which have absorbed substantially higher reductions than academic units. In most cases, academic units have absorbed half of the budget reductions absorbed by support units. In addition, we have asked units to reduce expenditures on personal services as well as discretionary spending on travel, training, supplies, and equipment.
As we move forward with this difficult year, we will continue to monitor state revenues and to evaluate and consult with the campus about cost reduction strategies, efficiency initiatives, and, in the worst-case scenario, additional furlough days or other possible work-force reduction requirements.
As always, we will continue to keep you informed as more information is available. I greatly appreciate the support of the entire campus community as we work through these difficult times together.
Governor Sonny Perdue recently mandated both budget cuts and a statewide furlough to help close a $900 million state funding gap. Earlier today, the University System of Georgia’s (USG) Board of Regents voted to forward to the governor three state appropriation reduction scenarios. Because of the uncertainty surrounding future state revenues, prior to today’s meeting, the Board had asked each institution to develop and provide proposals for FY2010 state appropriation budget reductions at levels of 4 percent, 6 percent, and 8 percent. Each of these three scenarios was required to include six days of furlough for USG employees, to be taken between now and June 30, 2010.
By way of background, it is important to note that for Georgia Tech, the reductions to the resident instruction budget in FY2009 ($29 million) and in the initial budget reductions for FY2010 ($5 million) totaled $34 million, making the total reduction from the FY2009 original budget of $289 million, approximately 11.8 percent. The three new additional FY2010 budget reduction scenarios would result in additional reductions of $10.2 million (4 percent), $15.3 million (6 percent) or $20.3 million (8 percent). This would bring the “total two-year reductions” from our original FY2009 state appropriation to $44 million, $49.1 million, or $54.2 million for the respective reduction scenarios, representing a 15.3 percent, 17.0 percent or 18.8 percent reduction from the original FY2009 budget. Clearly, these levels of reduction present significant challenges for all of us here at Georgia Tech.
The required furloughs, as mandated by the Board, are expected to meet 2.75 percent, or approximately $6.5 million, of Georgia Tech's reduction target for each of the three FY2010 budget reduction scenarios requested. The Board also approved a plan for additional reductions of the overall total requirement to be accomplished at the system level through proposed changes in benefits or additional student fees. The remaining balance will be assigned to the individual USG institutions.
With the assistance and support of the entire campus community we were able to address the prior year reductions with minimal disruption to our daily operations. However, our challenge for FY 2010 is considerable, particularly when considered in light of the reductions already taken by the Institute. As we move forward with this difficult year, we will continue to evaluate and consult with the campus about cost reduction strategies, efficiency initiatives, and, in the worst case scenario, additional furlough days or possible work-force reduction requirements.
Chancellor Erroll Davis has provided USG institution presidents with limited flexibility to structure the furlough plan as they deem appropriate for their institutions, but has required that at least three of the furlough days be taken before the end of the current calendar year.
In anticipation of the possibility of furloughs, in mid-May we established an administrative working group to determine the optimal approach should furloughs be required. The group reviewed the financial and operational impacts of furloughing Georgia Tech employees, including any unintended consequences such as additional loss of revenue and operational impairments. The business case analyses and recommendations from the working group have been incorporated into the development of the campus furlough plan.
While not yet finalized, we have established some initial principles to guide our approach to the development and implementation of the mandated furlough program for Georgia Tech. These include:
Also, based upon these principles and the recommendations of the working group, we have determined that the best implementation strategy is to designate a four-day furlough period from December 21-24, 2009, as “required furlough days” for Georgia Tech employees, pursuant to the above criteria. This period coincides with Winter Break, minimizing the impact on the operation of the Institute and instructional activities. We are currently reviewing options for scheduling the remaining two mandated days in spring 2010.
Additional information regarding the furlough plan will be provided soon and we will keep you informed as those plans progress.
All of us here at Georgia Tech recognize that these circumstances will create a significant hardship for many in our community, and we will do everything possible to minimize the impact on our students and employees. We have established a Web site (www.gatech.edu/budgetupdate) to provide information and address many of the specific questions you may have. We will be posting additional information on this site as we move forward with the implementation of our plan and I encourage you to visit it for more information. For any other needs, please contact the Office of Human Resources at hr.ask@ohr.gatech.edu.
I recognize that these are difficult times and thank you for your cooperation and understanding. While the circumstances are challenging, I remain confident that we will be able to continue to offer our students a quality educational experience, and continue to support our outstanding research, service, and outreach programs.
Tomorrow, the University System of Georgia’s (USG) Board of Regents will hold its monthly meeting, and among the agenda items it will consider are budget reduction scenarios amounting to 4, 6, and 8 percent of our state funding. These reductions will be mandated to help close the state’s budget gap brought on by declining revenues.
Among the actions is a proposal to enact a six-day furlough for all USG employees, to be taken between now and June 30, 2010. Under the terms of this proposal, at least three of these days must be taken between now and the end of the calendar year.
Following the formal approval of plans, you will receive additional information on how Georgia Tech plans to implement a furlough.
Until then, please be assured that everyone recognizes that these reductions will create personal hardships for many members of our community, and we will do everything possible to minimize the impact of these cuts on our mission and the members of the Georgia Tech family.
In the near future, we will be setting up a Web site and scheduling a public town hall meeting to help answer your questions.
To the Georgia Tech Community:
As you have undoubtedly heard, as a result of the continuing decline in state revenues, late yesterday Governor Perdue announced a “mandatory three day furlough for every state employee to be taken before the end of the calendar year.” This of course includes Georgia Tech.
Although we still have unanswered questions, let me share with you what we do know and what we have planned. While we had hoped to be able to avoid the use of furloughs, we have had a “Furlough Contingency Plan Working Group” comprised of faculty and staff working on the issue of furloughs and how we might implement them should the need arise.
Over the course of the next several weeks, we will be interacting with that group, the campus leadership and the Office of the Chancellor to determine the specifics of the implementation. As we plan to comply with the governor’s directive, there are a number of questions that must be answered and issues that must be resolved. We will share this plan with all of you and present it to the Board of Regents for approval at their next meeting on August 11 and 12, 2009.
We will do everything possible to ensure that we are able to maintain the quality of our programs and fulfill our statutory mission of presenting outstanding education, research and outreach programs, while still meeting the governor’s directive. We will also do everything we can to work out the timing of the furlough days to meet the needs of your work groups and your personal preferences.
Because of the impact this directive will have on all of us and our families, I will continue to keep you apprised of the specifics of our plan as they become more clear.
All of us here at Georgia Tech continue to be very concerned about the recent crimes that have occurred in the areas surrounding the Georgia Tech campus. I want to reassure you that we are committed to making our campus and the surrounding neighborhoods, where our students, faculty and staff reside, as safe as possible. I have heard from a number of you who have asked what measures, in addition to the numerous safe campus initiatives we already have in place, we are taking.
First, let me assure you that the safety and security of our students, faculty and staff is our highest priority, and we will continue to work closely with the Atlanta Police Department (APD) to protect you and make the Atlanta neighborhoods as safe as possible for everyone.
I have been pleased with the level of cooperation and coordination between the Atlanta Police Department and the Georgia Tech Police Department, and these two groups continue to work very well together. Yesterday, five members of the Atlanta Police Department, including Assistant Chief Peter Andersen and Assistant Commander for Zone 5 Joe Spilan, joined three members of the Georgia Tech Police Department and members of the senior leadership team from Georgia Tech to review our current efforts and discuss what additional steps we could take to enhance our partnership in addressing safety in the areas surrounding the Georgia Tech campus. Following this meeting, I spoke with Mayor Shirley Franklin and she assured me that the city would continue to support our efforts in every way possible.
Yesterday afternoon the Atlanta Police Department hosted a news conference on the Georgia Tech campus to outline their enhanced strategy. While it would not be prudent to go into detail about the additional safety measures begin taken by either the Atlanta Police Department or our own Georgia Tech Police Department, the APD has committed to the initiation of strategic roadblocks in Midtown, Centennial Place and Home Park, as well as increasing foot patrols in the neighborhoods that have experienced an increase in crime. The city will also begin tighter enforcement and control at nearby clubs and bars, and is utilizing technology such as automatic tag readers to quickly retrieve license tag information when looking for suspects and vehicles.
While there is no evidence to suggest that students are specifically being targeted, there is a clear profile. Individuals walking alone at night are at significantly higher risk than those who practice basic awareness and prevention techniques. We continue to advise our community to take every precaution possible to avoid placing yourself at unnecessary risks.
Because we are an open campus operating in an urban environment, we will continue to support vigilant campus safety programs. Our Georgia Tech Police Department includes more than 70 sworn police officers, operating 24-hour patrols on foot, motorcycle, bicycle, car and Segway. We have K-9 patrols and five duty stations staffed by officers, 190 “blue light” outdoor emergency phones located throughout campus and security cameras. In light of recent events, we have expanded the assignments and duty time of some of our public safety officers.
I want to close by again assuring you that we have the full support of the Atlanta Police Department and are working closely and collaboratively with the City of Atlanta. I am confident that these new measures, along with the cooperation of our university community, will improve safety in the neighborhoods surrounding Georgia Tech.
Regards,
To the Georgia Tech campus community:
As was announced earlier this morning, the state of Georgia has seen precipitous declines in monthly revenue collections, ranging from 20-35 percent in monthly revenues over a year-to-year basis. These are substantial and largely unprecedented, and we are being told that this lingering economic effect is similar to what is occurring around the nation. The most recent revenue figures for the month of May 2009 have forced the state to take action to preserve a balanced budget for the current fiscal year. As a result, earlier this week the governor requested that all state agencies, including the University System of Georgia, make additional reductions to their annual state budgets.
Here at Georgia Tech, we have been carefully monitoring the situation and while this latest reduction brings our projected cumulative budget reduction to nearly 14 percent for this past and the next fiscal year, we believe that we have developed a strategy for dealing with this reduction.
Because we are so close to the end of the fiscal year, we will again attempt to manage this latest reduction centrally, and will not require any immediate unit-level reductions. However, as we plan for the future, we will need to remain cautious and work together to ensure that the decisions we make in the coming weeks with respect to the FY10 budget and beyond, protect our core academic and research mission.
I know these are difficult times and I want to thank the entire Georgia Tech community — faculty, staff, students, and alumni — for your understanding and assistance as we continue to face these ongoing challenges. Georgia Tech has demonstrated its tremendous resilience in the past, and we will continue to seek out cost efficiencies and other means to ensure that we are able to educate and serve the citizens of Georgia as a top-tier research university.
To the Faculty and Staff of Georgia Tech:
At its monthly meeting, the University System of Georgia (USG) Board of Regents approved language that would enable the implementation of a mandatory furlough program. In addition, the Regents requested that each USG institution include this language in all annual appointment letters and contracts for the 2010 fiscal year.
While we do not anticipate the need to implement a mandatory furlough program at this time, this measure is intended to offer all of the USG institutions additional flexibility in managing their budgets in the event of additional reductions. As I am sure you are aware, we have been working to minimize the impact of the budget reductions on the mission of the Institute, and we will continue to pursue avenues that help reduce expenses without sacrificing the quality of our education and research.
I will continue to keep the campus community informed as our institutional decisions and the state’s fiscal outlook evolve over time.
