Budget Process 2014-15

Dear Colleagues:

We have officially kicked off the budget process for the 2014-15 fiscal year.  I met with Budget Goals and Plans, and they are re-working the official request form to make it more user-friendly and to incorporate links to the new Strategic Plan.  The new form should be available shortly.  We will be tweaking the process a little this year, separating one-time funding requests from recurring requests. At this time, we are asking only for the requests for recurring funding.  The one-time budget process will begin in the spring to better align with our ability to forecast reserve balances.

Last year we had 144 requests totaling nearly $8 million.  We approved 28 requests (totaling about $1.2 million) in recurring funding and 12 requests (totaling about $900,000) in one-time funds.  The list of requests (funded and not-funded) may be found on my.newpaltz.edu in the Budget Information Center under the Faculty/Staff Services tab.

As we look forward to fiscal year 2014-15, we hope to fine-tune the budget request process.  The Provost, Deans and I discussed how to scale expectations to available resources, which at first blush appear to be far more modest than the past two years.  The primary reason for this projection is collective bargaining increases (currently estimated at $1.2 million).  While the Governor’s Office has agreed to provide SUNY with “maintenance of effort” funding, they have made it clear that this does not include funding contractual salary increases.  Therefore the campus must use part of its new tuition revenue to cover these increases.  Additionally, the campus has seen a decline in our enrollment for the fall 2013 semester.  While we met our incoming freshman and transfer targets, our attrition rates have increased, primarily through an increase in our graduation rates.  However, we continue to see a decline at the graduate level.  Since tuition revenue accounts for 75% of our total operating budget, we must temper our targets accordingly or we run the risk of running severe deficits in 2014-15.

As a result, initial projections for 2014-15 show only minimal funding for new initiatives if enrollment numbers hold.  If enrollment continues to decline, we will likely have no new revenue to invest.

You may be asking, “If we have no funds to invest, then isn’t this process just a waste of valuable time?”  The answer to that question is no.  In any circumstance, this process has value because it keeps the critical needs of the campus in the forefront and enables Cabinet to move swiftly if/when funding becomes available.   (I learned last week that System Administration has made collective bargaining part of its request to the Division of Budget.  Should this funding come through, this would definitely paint a rosier picture for our investment process…but it’s too soon to tell whether this is likely to happen or not.)

The 2014-15 budget process timeline is available on my.newpaltz.edu in the Budget Information Center under the Faculty/Staff Services tab, along with the entire request list from last year.  The Deans and Vice Presidents would like you to look at recurring requests that were not funded last year and evaluate whether or not you would like to put the proposal forward again for consideration.  At the same time, we ask that you re-tool the request to link it to the Strategic Plan.

The President and I will hold a budget forum on Monday, December 2, from 10:30 a.m. to noon in the Student Union Building Multipurpose Room to discuss the process and answer any questions we can about the 2014-15 budget.

Michele Halstead

Vice President for Administration and Finance

2013-2014 Budget Update

Budget Goals and Plans Response March 2013 (MS Word)

New Paltz Faculty and Staff:

Budget and financial matters are occupying much of our attention right now, with this year’s campus budget-allocation process nearing completion and legislative approval last week of a 2013-14 New York State budget.

In addition, last week, we responded to a series of thoughtful questions from the Budget, Goals, and Plans Committee about the campus budget – many prompted by your responses to the committee’s survey about the budget last spring.  Because our responses may be of broad interest beyond this year’s budget process, we have posted them in the Budget Information Center in my.newpaltz.edu and have attached them here. We encourage you to read the questions and our responses, as we believe they will help you understand important detail and complexity about our budgetary considerations and decision-making.

State budget. We expect to receive more detail in the coming days about the impact of the new state budget on our campus. The limited communication from SUNY administration since the budget passed tells us that there is still significant discussion about system-level decisions surrounding the budget and its implementation.  We will apprise you of further information as it becomes available.

We are fairly certain of the following (some paralleling the assessment you received over the weekend from SUNY Faculty Senate):

Tuition.  It looks like the next year of tuition increase ($300 for resident undergraduate students) has been approved.  This is the core of the new revenue that lets us even consider funding new faculty positions, support positions, and other initiatives – brought forward in this year’s budget requests.  We feel a strong obligation to include increased financial aid for students given the tuition increase.

State taxpayer support.  State taxpayer support to SUNY state-operated campuses such as New Paltz is expected to be flat; we believe at this time that the SUNY request for the state to fund contractual salary increases was not included in the state budget. The good news about flat taxpayer support is that we are not being cut, as we were in recent memory.  The downside is that any inflationary or contractual increases (e.g., regular inflation, multi-year software packages or service agreements with built-in inflation adjustments, collective bargaining agreements) must be funded from campus resources, most likely by allocating new tuition revenue for this purpose.  The multi-year increase in minimum hourly wage affects our student employment budgets, but we expect that impact to be modest; we intend to allocate funds to sustain both student financial support and departmental reliance on student labor.

SUNY hospitals. It is now virtually certain that sustaining SUNY hospitals, facilities and programs will impact all SUNY state-operated campuses; these programs are critical in educating health-care professionals in New York and in providing affordable health care to many New Yorkers.  SUNY and the State are working to develop a new financial model for Downstate Medical and its affiliated hospitals. While we hope that impacts on other state-operated campus budgets will be short-term, the impacts will be significant.

It is not clear whether campuses will contribute to this “bailout” through campus reserves, or through use of salary savings in the Deficit Reduction Leave (DRL) program.  Either way, planning for these financial impacts introduces a significant note of caution into our thinking about allocating new tuition revenue – again, our only clear source of new recurring revenue for new positions or initiatives.   Salary monies held back through the DRL will eventually be re-paid to employees. We will work hard to convince our legislators to allocate new funds for that purpose, if this is the source of funds used for campus contributions to keep SUNY medical schools/hospitals financially afloat.  But we cannot count on that investment, and we would be irresponsible to ignore this possible near-future commitment as we think about decisions to allocate new revenues for the coming year.

As explained in our memo to the Budget, Goals, and Plans Committee, our campus “reserves” or cash balances at the end of the year will be somewhat below the mid-point of the range directed by SUNY policy – sound, but not excessive.  Being required to use campus reserves to contribute to the hospitals would introduce a different set of financial concerns – how to ensure that we have set-aside sufficient funds for future emergencies or key opportunities.  In any event, our contribution to the Downstate Medical financial solution will clearly have an impact on our campus finances and planning.

Capital funding.  We do not know the final outcome of capital-funding decisions, but there was no cause for optimism leading up to the final budget.  It appears that the new state budget has no funding for new capital initiatives or deferred maintenance for New Paltz and most other campuses (again, bonding authority is in place for the new science building and the library renovation), and we are deeply concerned about losing significant ground on our critical maintenance initiatives.  We have no word on whether the “disbursement cap” limits that have delayed the new science building construction and the library renovation have been lifted.

The one bright spot on the capital side is the apparent decision to remove residence hall construction and renovation from the state bonding caps.  While we await final word on whether the authorization limits include both construction of a new residence hall and renovation of Lefevre Hall, we continue to plan both projects.

Campus budget process.  In the meantime, Cabinet is prioritizing requests for new funding. We want to be poised to finalize budget-allocation decisions as soon as our financial situation for next year and the following years is clear. We are planning a campus-wide budget forum on April 24 to share these priorities (details to follow).

Again, please stay tuned for updates in the next weeks.

Donald P. Christian, President
Michele Halstead, Assistant Vice President for Administration and Finance