As you may recall from earlier communications regarding the budget, there are four main causes of the persistent deficits at HSU. First, our campus provides a unique mix of high-quality and high-cost academic majors, small class sizes and a high proportion of tenured or tenure-track faculty that are largely unrivaled in the CSU. The cost of providing these programs in the manner they are currently structured exceeds the funding provided by the state and other sources. Second, the rapidly increasing costs of insurance, utilities, technology, salaries and our extraordinarily good benefits have outpaced increases in state funding and other revenue sources. Third, the funding of CSU campuses is now even more closely tied to enrollment. HSU's enrollment has declined over the last several years, and we have not met enrollment targets for our campus, further limiting state funding. Fourth, the Legislature has asked both the University of California and the CSU to return funds if enrollment targets are not met. Because of these factors, we have a deficit in our general fund budget prompting a thorough evaluation of our expenditures and revenue sources, including student fees.
The in-depth budget examination undertaken over the last several months included numerous steps: the outside survey last December by our former Provost and former President of Chico State University, Dr. Manuel Esteban; review by the President Emeritus of CSU Long Beach, Dr. Robert Maxson; extensive review and discussion by the University Executive Committee, Associated Students, Student Fee Advisory Committee, Staff Council, and the Academic Senate; and lastly, hours of public scrutiny and discussion by the University Budget Committee (UBC). Together, these activities have provided an open, inclusive, and exhaustive process to review and inform the allocation of university resources. Further information regarding the budget process can be found at the budget information web site at http://www.humboldt.edu/~budget/Pages/general.htm.
I extend my personal and heartfelt thanks to all who have contributed to these difficult deliberations. Many have spent long hours and personal time evaluating the budget, offering suggestions and ideas, supporting the work of the UBC, preparing and providing information, and much more. I am deeply grateful for this work and for the care of HSU and its students that has been demonstrated throughout this process.
The final decisions regarding the 2007-2008 fiscal year budget are as follows:
The academic affairs division will need to reduce its expenditures by $1,715,600 in order to cover the over-expenditure of its budget in the 2005-2006 and 2006-2007 fiscal years. (This above-budget expenditure is sometimes referred to as a structural deficit.) Actual budget reductions to the academic division will be phased in over the next three years with $900,800 being reduced for FY 2007-2008, followed by a reduction of $402,400 in 2008-2009, and a reduction of $276,600 in 2009-2010. To the extent possible, these reductions will not affect student progress toward degrees or enrollment. They will likely result in an increase in the student to faculty ratio to approximately 21 which remains below the CSU average. In addition, there will be cost saving changes in academic administrative structures.
The division of student affairs will be reduced by $311,000 resulting in the reduction of some student support services. The division of administrative affairs will be reduced by $400,000 resulting in decreased capacity to maintain facilities and grounds. The president's division will be reduced by $58,000 further limiting the discretionary funds available to assist campus units.
There will be some areas that will experience fewer reductions to their budgets than I have mentioned above. These are areas that have either been significantly reduced in recent years to cover operating deficits, have been historically under-funded, have potential for increased net revenue, and/or are particularly essential to the values and goals laid out in the strategic plan. These areas include police, advancement, and admissions, as well as many other areas identified by the vice presidents within their own divisions.
Lastly, starting with the fall 2007 semester, the Instructionally Related Activities Fee (IRA Fee) will be increased by $202 per semester bringing the total IRA Fee to $250 per semester. The bulk of this increase will be used to mitigate additional reductions to the academic units of the university that would have been necessary without a fee increase and to fund the Humboldt Energy Independence Fund and the JackPass. Further information about the fee increase can also be found at the university's budget information web site.
While all of us would prefer that budget reductions were not necessary, HSU should be proud of the collective effort we have made to balance the university's operating budget. These decisions and their implementation are difficult, but they also address the reality of our fiscal constraints and position the university for increased financial stability. In order to continue our efforts to stabilize and improve the university's financial position, we must also continue to work together to attract new students to HSU and to retain those who have chosen to attend. We have a wonderful education to offer students with the promise of a fulfilling and rewarding life.
Rollin C. Richmond
President