I write to provide results from the 08-09 fiscal year; the status of the 09-10 spending reduction plan; and to share recent budget news from Albany.

Fiscal Year 08-09

Last fall we announced the use of campus rainy day funds (reserves) to manage the 08-09 budget cuts while we developed a thoughtful plan to address the cuts to the 08-09 and 09-10 state funding. In order to absorb the 08-09 cuts we planned on using up to $2.8M in reserves to see us through the year. I am pleased to report that, based on our actual expenditures for the year, the actual use of reserves is much less – only $0.9M. This has been achieved by the fiscal restraint that all of us practiced in the spring as we evaluated our spending needs and endured hiring delays. The $1.9M savings was as follows:  $1M in utility costs; $0.6M in other than personal service costs and $0.3M in personal service costs.

Fiscal Year 09-10

Each department worked with its respective Dean and Vice President to implement the $6M spending reduction plan. Our efforts produced a total spending plan of $59.1M. The funding available to support this spending plan on July 1, 2009 is $59.7M, leaving the campus with $0.6M that is unallocated and currently available to support future budget cuts.

This $59.1M spending plan realizes $4.6M of the $6M plan. Implementation of the remaining $1.4M reduction will be recognized in one of several ways: throughout the year as vacancies occur (our three-month hiring delay); as we announce and implement our program of voluntary salary reductions;  as further attrition occurs in areas where we agreed to consolidate and reorganize; and, finally,  when program phase-out is complete, which will require several years.

Data on the 09-10 spending plan and an updated three year summary that compares our state funding to our expenditures/expenditure plans are being posted to my.newpaltz.edu.

Moving Forward – News of Mid-Year Budget Cuts from Albany

The state’s economic picture is stormy. We’ve all read of current year projected deficits in the range of $2.1 to $3B, $5B for fiscal year 10-11 and $13B in 11-12. In response, on October 6, the Governor ordered $500M in current-year spending reductions. On October 15, the Governor announced a two-year $5B Deficit Reduction Plan. This plan includes $500M cuts announced October 6. At present, SUNY’s share of the $500M cut is $90M. With the possible exception of a proposed cut to the Tuition Assistance Program (which will impact students) it appears that the additional $2.5B in cuts will have no direct impact on SUNY.

New Paltz’s share of the $90M cut is unknown; however, you may recall that last year’s cut of $96M translated to a $2.4M cut for New Paltz. Last week Chancellor Zimpher created a working group to provide recommendations for an appropriate methodology to allocate the $90M cut and to provide a budgetary framework as we look to the 10-11 fiscal year. This group will be led by five presidents representing our various campus sectors. The group will also include campus provosts, business officers, research vice presidents and SUNY executive leadership.

As you are aware, the cuts that we made to our spending plans for 09 10 anticipated that further future cuts would be made. That reality is now here and our hard work and hard choices last spring now put us in good stead. Our careful and consultative planning has provided approximately $2.0M to assist us in mitigating the impact of the coming cuts; has protected our reserves balances, although reduced from $5.3M to $4M; and has created an open and consultative process that can be deployed if it becomes necessary.  Further we have demonstrated that we can exercise fiscal restraint in our daily decisions regarding critical and necessary expenditures – behaviors that will be absolutely critical in our continuing implementation of our 09-10 plan and as we move forward in these uncertain economic times.

President Poskanzer or I will be certain to share further details as they become available.

Jacqueline S. DiStefano
Vice President for Finance & Administration

As you may know, the Governor and Legislative Leaders have announced a three-way agreement on the 2009-10 state budget. There are no substantive changes from the Governor’s proposed budget released in December. There are several notable items:

• Confirmation of the increase in undergraduate tuition ($620) and no change in the tuition increase share percentages. As had been proposed, only 20% will be retained by SUNY. More disappointing is that it will be four years (fiscal year 2012-13) before the “share” percentage reaches 50/50.
• Confirmation of use of reserves (one-time funds) to fill recurring base cuts.
• Restoration of the proposed reduction or elimination of many SUNY university wide programs ($22.8 million SUNY total) (e.g., academic equipment replacement and student computing access program).
• Confirmation of the proposal for a tuition increase for in-state graduate students to match the increase for out-of-state graduate students (21% instead of 14%) with the same tuition increase share percentage as noted above. The approval of the SUNY Board of Trustees will be required to enact this increase.

What does this mean as it relates to the estimated 2009 10 cuts for campus? Much of the uncertainty about our budget and the corresponding cuts has been resolved, although there are several items that require resolution before we have an exact figure. The most notable (and the one with most significant dollar impact (~$1.96M) to the campus) relates to funding for collective bargaining. The Governor has advocated for nonpayment or deferral of salary increases. Given his recent announcement regarding union negotiations and the layoff of 8,900 state workers, it seems likely that the SUNY budget will be adversely impacted either through additional cuts or lack of funding for these increases.

So, at present our envelop of cuts to be considered as we plan our 2009 10 budget is estimated from $3.9M to $6.2M. The $3.9M estimate assumes funding of collective bargaining, approval by the SUNY Board of the tuition increase for the item noted in the fourth bullet above, and no additional cut. The estimate of $6.2M assumes that collective bargaining is not funded, that the SUNY Board does not approve the tuition increase as noted in the fourth bullet above, and that there is no further cut. It is a worthwhile reminder that the campus will use a significant portion of its reserves (~50%) just to manage the 2008 09 cuts. Given these factors we will use conservative estimates (~$6M)
as we continue with our budget planning process for 2009 10.

This is our best understanding at this moment. As more clarification or information becomes available we will be sure to share it with you.

Jacqueline S. DiStefano
Vice President for Finance & Administration

As we all settle back into our routines following spring break, I thought this would be a good time to provide a quick update on the process currently under way to address the college’s budget deficit.

As you’ll surely recall from the ongoing series of updates from both me and Vice President DiStefano, New Paltz has been subjected to substantial cuts in state support for fiscal years 2008-09 and 2009-10. For the current fiscal year (which ends on June 30), the total reduction in our state support is $3.4 million. We are digging deep into our reserves (i.e., “rainy day” funds) to balance the budget. This gives us time to plan for the recurring cuts (ranging from $3.9 million to $8.6 million) slated to take effect next year.

Intensive meetings of our budget planning group—which includes all Vice Presidents, Deans, senior managers and several faculty governance leaders—continued throughout spring break. The group has been evaluating all the revenue-generating and cost-saving ideas submitted to Vice President DiStefano, testing them against the criteria we’ve developed as a campus. In accordance with the schedule we’ve previously shared with you, the group is now concluding this part of its discussions and we remain on track to make decisions about the college’s 2009-10 budget by the end of the semester.

Several important themes have emerged from our review of the ideas generated all across the campus. As we’d hoped, there were a number of intriguing suggestions that would generate more revenue through tuition for new academic programs and through a variety of new and extant fees. Some of these ideas, while promising, will require more planning and lead time before they result in actual revenues. There were also sets of ideas that would lead to cost savings (in some cases significant savings) in energy consumption, expenditures for supplies and contracts, overtime charges, and costs of temporary staff. Still other suggestions will help us fully leverage the different streams of operating money that flow into university coffers. The planning group will, of course, endorse these kinds of ideas before recommending staff reductions. However, with 84 percent of our state-operating budget in personnel costs, we cannot achieve the necessary savings simply by cutting our utility ($3.7 million) and supplies ($6.5 million) budgets.

Many colleges and universities in SUNY and across the nation have imposed hard hiring freezes to generate fast, attrition-driven savings. We have not done so. Indeed, while we have scaled back the number of faculty searches to 14 from 28, as I detailed in previous reports to the faculty, we feel strongly that a complete moratorium on faculty hiring would severely damage our efforts to build academic quality. Of course, as my faculty colleagues will correctly note, the timing of our faculty hiring process, in which vacated positions typically sit unfilled for a year, includes a substantial delay—a delay that, in budgeting terms, creates one-time “frictional” savings. One of the many cost-saving suggestions was to generate comparable “frictional savings” when non-instructional positions come vacant. The Vice Presidents and I concur that taking such a step would be fiscally prudent, operationally wise, and fair. Accordingly, we have decided to initiate a three-month hiring delay for all positions excluding faculty hires. While this delay period is considerably more gentle and flexible than a hard hiring freeze, it is our hope that this slowdown will lead departments with vacancies to consider, in consultation with their Vice President, the core duties of and continuing need for the empty position. We expect units to use this time to look for alternative ways to ensure that the unit’s critical tasks are completed and quality service to students and other constituents continues. Any questions regarding implementation of this delay should be directed to Human Resources at x3170.

I thank you for your thoughtful suggestions, patience and cooperation during this challenging time. Please know that we are moving wisely and well to craft a budget plan that ensures our college’s continued fiscal health and success.

Steve Poskanzer
President

As we continue to review your revenue generating and cost savings ideas, many of you suggested that we could save money by stopping construction projects on campus. Funding for our construction projects is separate and distinct from the college’s budget for daily operating expenses, including salaries. The funding for construction and operations are not interchangeable. Stopping major construction projects will not generate funds that could be used to support our daily operating expenses or provide relief for the state cuts that keep coming. In fact, if we were to stop construction the funding allocated to New Paltz would be reallocated to another SUNY campus, resulting in these campuses benefiting from this funding and New Paltz losing the opportunity to make many critical enhancements that will improve the quality of our campus life.

I will continue to share appropriate reactions and relevant information as we continue the budget decision process previously distributed to the campus.

As always please feel free to contact me with your questions.

Jackie Jacqueline S. DiStefano
Vice President for Finance & Administration
SUNY New Paltz

Many suggestions focused on ways to decrease our energy consumption and decrease the amount of printed material we produce on campus. Many of you already exercise these actions (and more!) in your daily routines, but it is never a mistake to remind everyone of these simple ways in which we can all make a difference in contributing to reducing our energy consumption.

1. Lighting – Turn it Off.
2. Unplug electronics not being used.
3. Enable the sleep mode on your computer.
4. Computers, printers, monitors – turn them off when not in use and when you are away from your desk for extended periods.
5. Make sure vents in your room/office are not blocked.
6. Distribute “paperwork” electronically.
7. Print documents only when you believe it is worth the natural resources.
8. If you must print, seek out a duplex printer that will print on both sides.  ( Most computer labs on campus have them! ).
9. Let in sunlight in colder months.
10. Close window blinds or curtains in warmer months to reduce energy spent on air conditioning.
11. Opt for Energy Star products, including appliances, heating and cooling equipment, electronics, office equipment, lighting and commercial food equipment.
12. Report leaky faucets, running toilets, and temperature problems to Facilities Operations and Maintenance at x3301.
13. Never prop doors open. This results in unwanted heating and cooling loss, violates fire code, and presents a security risk.
14. Close open windows.
15. Recycle.
16. Take the New Paltz Shuttle!
17. Check out www.newpaltz.edu/green

Thank you in advance for your contribution.

– Jacqueline S. DiStefano
Vice President for Finance & Administration SUNY New Paltz

We are at the point in our Budget Decision Process Timetable (sent to you by President Poskanzer last week) where we need to finalize the criteria that will support our budget decisions this spring. I am writing to solicit your help.

Attached is a list of draft criteria created by the senior campus leaders and faculty governance representatives who are advising President Poskanzer on budget decision-making this spring.

I ask that you read through the criteria and offer your comments, criticisms, amendments, refinements, substitutions and improvements. As President Poskanzer wrote in his faculty report last week, “the best, most forward-looking, and most broadly accepted plans will come from evaluating data and making choices within the framework of such criteria.” We need the campus community’s best thinking on this central aspect of the process.

As you read through the list, please consider that the criteria are not meant to be applied in isolation. Being able to justify that a function or program meets one of these criteria will neither shield it from scrutiny nor mark it as a target. You should also note that these criteria are not in priority order. Some items on the list apply specifically to instructional activities while some are applicable to administrative functions. Many apply to both academic programs and administrative functions.

Please e-mail me your feedback by close of business on Monday, February 23. If you prefer you can utilize the electronic suggestion box in my.newpaltz.edu or the physical suggestion boxes in Haggerty, Faculty Tower and the Service Building.

When we have your feedback, we will incorporate it into a final list to be shared with the campus community.

Colleagues,

As you know, the campus faces a significant budget deficit for fiscal year 2009 – 10. Based on the best information we have available to date the possible deficit ranges from $3.9M to $5.9M. In an effort to make the best decisions for New Paltz about how to handle our budgetary shortfalls, we want to employ a broadly consultative process.

To that end, I would like to invite campus community members to submit their best cost-savings and revenue-generating ideas for the campus. We will collect these ideas beginning today through close of business on February 20.

You will be able to do this in three different ways:

1. Send your ideas directly to me at distefaj@newpaltz.edu
2. Go into my.newpaltz.edu and click on the Faculty/Staff Tab. Then click on the Budget Suggestion Box. Complete the form and hit send. (These ideas will be collated and shared with my office but the identification of the sender will be omitted.)
3. Place your written ideas in one of three suggestion boxes located on campus:
   1. the Haggerty Administration Building Information Desk
   2. the Jacobsen Faculty Tower Lobby
   3. the Service Building, Facilities Operations Office, SB B11

While we will not be able to respond individually to each idea that is generated, I and my staff will read through these ideas carefully and compile the college community’s best thinking on how to proceed.

Thank you. Tapping the wisdom of our entire community will help us reach better decisions about how to secure the brightest possible future for New Paltz.

Jacqueline S. DiStefano Vice President for Finance & Administration

I write to share our understanding, at present, of the Governor’s budget proposal released last Tuesday. As expected, the proposal includes a fourth cut that would be filled with a tuition increase of $620. This reduction and the corresponding increase would take effect for spring 2009. Rhetoric from the Governor’s Office continues to trumpet the fact that SUNY will be allowed to “keep” a small slice of this tuition increase, but the fact remains that this is another major cut to the State University and, in effect, a tax on SUNY students and their families.

Other items that are included in the proposal that will impact our 2009-2010 budget are as follows:

• an increase to SUNY’s state support for negotiated salary increases ($61.8M);
• an inflationary increase for supplies, contracts and utilities ($18.2M);
• a new recurring base cut, totaling $47.8M, which is expected to be filled largely from extant campus reserves; and
• the reduction or elimination of many SUNY university wide programs ($22.8M) (e.g., Academic Equipment Replacement and Student Computing Access Program), though fortunately the EOP program has not been cut.

A cautionary note with regard to the inclusion of funding for collective bargaining increases. The language in the Governor’s Office press releases and media coverage contradicts the inclusion of this funding in SUNY’s base budget for next year. In a variety of public settings, the Governor continues to advocate for the nonpayment or deferral of salary increases—which could become an unfunded mandate and fifth cut to SUNY campuses.

The proposed new cut of $47.8M and the proposal to use reserves to fill this cut is very troubling. How the Governor intends to fill a base cut with one-time funding is, of course, a great mystery; even more troubling, however, is the prospect that reserve funds that campuses like New Paltz have accumulated to deal with financial emergencies might be raided to fill other state coffers. At this moment, we cannot predict the impact of this additional cut on New Paltz’s budget. If the cut stands, much will depend on which reserves from which campus or system accounts are tapped to fill this new hole. As you are aware, our campus has already committed to use reserves in managing previously-accessed reductions in the FY09 year. It is almost certain that the use of our reserves will also continue into the next fiscal year as we work to implement spending plans consistent with greatly reduced resources. Obviously, if these funds were seized and diverted elsewhere, our budget situation would become much more dire.

To summarize, as you’ll surely recall from previous communications and reports, the college faces an envelope of cuts ranging from a best case of $3.6M to a worst case of $5.4M—the latter assumes no funded salary increases. If the raises are funded but there is a new cut, our deficit will likely still be in excess of $5M, but it’s unclear. If there is no funding for raises and a sixth cut, our projected deficit will grow further.

This is our best understanding of the proposal at present. As more clarification or information becomes available in regard to his proposal we will be sure to share it with you.

Jacqueline S. DiStefano
Vice President for Finance & Administration

As we expected, right after the elections, a little bit of the fog has lifted on SUNY’s finances. SUNY Central informed us his week how it intends to distribute the $96 million cut imposed in July.

After employing some one-time budget maneuvers, the cut for FY09 has been reduced to $71 million. New Paltz is expected to contribute approximately $1.8 million of this sum. This cut, you’ll recall, comes on top of the $660,000 e previously absorbed, making our total cut for FY09 $2.4 million.

A bit of context. This $2.4 million cut equals 3.1 percent of our state operating budget of $57 million and 1.8 percent four total all-funds budget of $130 million.

Recall that all of these cuts are to SUNY’s base, meaning that they recur each year. With the one-time maneuvers exhausted, New Paltz’s total projected cut for FY10 and thereafter is $3 million per annum.

Much uncertainty remains, with contingencies that will dramatically shape our response. We do not know whether there will be a tuition increase either immediately, next fall or both. This would substantially decrease the size of our deficit—though of course it will make paying for college harder for students and their families, which is always a troubling prospect. We do not know whether there will be more cuts to SUNY when the Governor and the Legislature start their next round of budget talks. This could substantially increase the size of our deficit. Nor do we know whether the state will provide campuses the negotiated salary increases for next year, a potential unfunded mandate that would also substantially increase our deficit.

These potential variations are so large that we should move cautiously and deliberately. To that end, our dialogue with faculty governance and union leadership about the budget continues. Our efforts to lobby the SUNY Board of Trustees and elected leaders for a substantial and immediate tuition increase (and a rational tuition plan) continue. Our concern about student access continues. Our advocacy within SUNY for focused and strategic financial planning continues as well.

As I’ve said before, given the timing of these cuts, we will have to cover the bulk of this year’s ($2.4 million) cut largely from our reserves, while also examining other revenue-generating ideas and administrative and academic cost savings.

Because we all understand that colleges are labor-intensive institutions, and thus the bulk of our budget is in personnel costs, people all across campus are understandably anxious about the future. Given the wide range of possible budget outcomes, to impose a hiring freeze now would be premature and unwise. However, until we’re assured of a tuition increase that will dramatically reduce the size of the cut, we must look carefully at all
expenditures, including open positions. Therefore, at this time, as vacancies arise, I have asked the Vice Presidents to consider whether any open posts in their divisions need to be filled immediately. I would also ask the Provost and the Deans to revisit the list of faculty searches currently under way, to make sure we agree on which of these proposed lines are the most essential.

This will, I’m sure, be the first of many such budget updates in the coming weeks and months. We will continue to provide further budget information to you as it becomes available. Vice President DiStefano, our chief financial officer, will be communicating with the college community directly as we move ahead.

Even in good financial times, we regularly make hard choices necessary to build and sustain academic quality. We will draw upon that same care and wisdom in making choices now, and I am certain we can continue to make New Paltz better. Your ideas will help shape our conversations about how to achieve this fundamental goal.

Steven Poskanzer