New Budget Includes Cost-Savings

The $1 billion budget approved by the University of Cincinnati Board of Trustees at its meeting today incorporates $27 million in cost-saving measures to address flat state funding and rising energy and health-care costs. In addition, the budget marks a new approach to developing the institutional budget, with wide participation throughout the university and an emphasis on investing in academics, student services and research.

The budget projects savings through:

• withholding salary increases for non-union employees
• reductions in the size of the university’s vehicle fleet
• greater effort to conserve energy
• shifting more health-care expenses to employees
• a retirement-incentive plan
• reorganization of administrative functions
• distributed cuts to administrative and academic areas

Development of the budget began in late March of this year, when the UC President’s Budget Advisory Committee determined that, based upon a conservative analysis, projected expenditures at UC would outstrip projected revenues in fiscal year 2007.

Beginning in April, the President’s Budget Advisory Committee hosted budget meetings with vice presidents, deans, faculty and students and requested advice and input on how best to address the shortfall.  The budget meetings generated approximately $34 million in cost reduction strategies, to be implemented over the next two to three years. 

"A consistent theme that emerged from the budget conversations was that UC’s budget situation presents an opportunity to reinvent how the university does business," said Monica Rimai, interim senior vice president for finance and operations.  "In particular, a number of cost-saving strategies discussed at the retreat involve significant changes to the manner in which UC pursues its mission."

The new budget plan incorporates immediate and long-term goals to:

• reduce the duplication of programs and services
• consolidate, scale back or eliminate some programs and services
• outsource some services altogether

Participants in the budget discussions agreed that, while some ideas have merit and would yield significant savings for the university, they also carry a potential for long-term negative effects. In those cases, further discussion and analysis will take place beginning this summer. 

The approved budget incorporates an implementation plan that reflects the consensus of budget participants.

"We know that we will be generating significant savings as we implement the ideas developed through the budget process," Rimai said.  "Moreover, because we are taking so much of our pain right now, as the savings begin to accumulate we will be able to put them towards academic priorities. So, we've got a plan that doesn't just fix a problem, it puts us in a great position for moving ahead."