On Budget Cuts and Planning for Fiscal Year 2012
January 26, 2011
With Governor Nathan Deal’s first budget proposal now in the hands of state legislators, I wanted to take the opportunity to give you an impression of how these early projections are likely to impact Georgia Tech’s operations, both for the five months that remain in this fiscal year as well as next year’s cycle.
On January 12, the governor presented two proposals: an amendment to the Fiscal Year 2011 budget, in which he reduced the revenue estimate, and the Fiscal Year 2012 budget that begins July 1, 2011. The revised revenue estimate means Georgia Tech’s overall state appropriation has been reduced by a total of 6 percent this current fiscal year, or more than $13 million. Fortunately, due to careful planning and prudent budget forecasting, we anticipated this and are reasonably well prepared to absorb a cut of this size with minimal impact on our operations. While this reduction will require a permanent 1 percent budget reduction for each campus unit, we anticipated this and have planned accordingly. As a result, you will probably see little or no impact.
To date, we have managed budget reductions without substantially impacting the quality of what we do for our students and for the people of Georgia. However, every additional reduction makes this task increasingly difficult. We continue to keep our focus on our primary goal: to ensure that the quality of our academic and research programs remains nationally competitive, even if it means taking undesirable actions such as reducing course offerings, limiting our state business outreach, or capping enrollment growth.
The Fiscal Year 2012 budget holds significant challenges for everyone. The governor has recommended another 2.6 percent reduction in the base budget, which, if enacted, would bring Georgia Tech’s total budget reduction to more than $87.5 million over four years — one-third of our 2009 state funding base. In addition, the governor has recommended no new formula funding for the University System — revenue needed to keep up with enrollment growth as well as the operation of new facilities, including the Clough Undergraduate Learning Commons. The budget reductions, the elimination of new formula funding, and the sun-setting of the federal stimulus funds will mean that without a tuition increase, additional unit reductions will be needed in this next year to compensate for these losses.
Given an uncertain future, we are planning for a range of scenarios, while working closely with student leaders and colleagues in the University System to maintain an open dialogue with our elected representatives. Most importantly, I intend to keep you informed at every point in the process and to ensure that we remain true to our principal missions of education, research, and service.
This extended period of financial austerity has been unlike any in my experience as a professor, a researcher, or an administrator. In spite of this, I continue to be deeply moved by the spirit, dedication, and passion exhibited by the members of the Georgia Tech community. It is a privilege to be able to tell the stories of the people who have helped to shape our success.
Thank you for your continued support, your hard work and dedication, and most of all your concern for our students and the well-being of this great institution.
G. P. “Bud” Peterson
President, Georgia Institute of Technology