Dear Campus Community:
I'm writing to give you an update on the substantial progress we have made in meeting our budget challenges. In addition, I'm summarizing UMD's proposed Operation and Maintenance (O&M) allocation from the University of Minnesota for next fiscal year (FY15), which begins July 1, 2014.
Pending final approval from the Board of Regents, we are optimistic that UMD will be in a much improved financial position going into fiscal year 2015. As a result of the program prioritization initiatives, voluntary layoffs, new revenue generation, and a larger allocation of state funds from the University of Minnesota system, we are hopeful our structural and recurring deficit will be reduced to approximately $5.5 million, and our non-recurring $3.9 million deficit for fiscal year 2014 will be eliminated.
President Eric Kaler's proposed O&M allocation for UMD increased $4,178,467 or 13.2% over fiscal year 2014. Of that amount, $2,978,467 is an expected increase as part of the biennial budget approved last year by the state Legislature and Governor Dayton that allows UMD to continue to freeze in-state undergraduate tuition. The remaining $1.2 million is a recurring budget increase for UMD from the University of Minnesota system. If the Board of Regents approve President Kaler's proposed budget, state funding will contribute 26% of UMD's O&M budget, an increase of 3% over last fiscal year. In addition, the state Senate has proposed a $2.5 million allocation to the University of Minnesota system to help UMD address our non-recurring budget. President Kaler's budget proposal augments that potential state allocation to eliminate UMD's non-recurring deficit for the current fiscal year.
I want to thank the entire campus community for coming together to find creative ways to operate more efficiently. This has not been easy, and we still have hard work ahead. We are starting immediately on strategies to address our remaining structural deficit. However, we also have great things in our future as we continue to pursue our vision and continue to position and to transform UMD for the 21st Century.
At this time, we have cut in half the budget deficit I announced last September, from $11.9 million to approximately $5.5 million. We will be more certain about the $5.5 million deficit after we close out fiscal year 2014. Even though this deficit number may shift, I am confident we will get through this challenge over the next couple of years. As we solve these challenges, we will remain focused on our strengths and achieving higher levels of excellence. That is why we chose not to make across-the-board cuts, but made strategic reductions that had the least negative impact on our academic areas and on students. We have established true budgets in all units that allow people greater freedom in planning and monitoring those budgets with increased control and accountability.
I also want to thank President Kaler, Vice President and Chief Financial Officer Richard Pfutzenreuter, and system Budget Director Julie Tonneson for listening to our UMD campus community and partnering with us to address our budget challenges.
The proposed University of Minnesota budget will be discussed in a public forum on Friday, May 9 from 12:30 - 1:30 p.m. in the Board Room of the McNamara Alumni Center on the Twin Cities campus. The budget is subject to approval by the University of Minnesota Board of Regents on June 13, 2014.
Sincerely,
Lendley C. Black
Chancellor
