|| UC Community|
|| Nancy L. Zimpher, President|
|| Budgetary Strengths and Challenges|
|| January 22, 2009|
I have no doubt that every member of our UC community from students to faculty to staff to senior level administrators has questions and concerns about what the current economic downturn will mean for our university.
In December, the National Bureau of Economic Research made the announcement everyone had expected throughout 2008: The United States is officially in an economic recession, and has been since December 2007. The official declaration surprised no one who follows news reports about the financial market collapse, major bankruptcies, the credit crisis, and government stimulus packages. The economic outlook is bleak, and there is no question that the University of Cincinnati will face some tough times.
The full extent of the challenge before us is not yet known. As recently as Jan. 14, the Cleveland Plain Dealer reported no one really knows the depth of the economic problems facing the state because they are all based on projections that may or may not be accurate. We know that Ohio’s current $52 billion budget has already been cut by nearly $2 billion. As the state outlines the next biennial budget (for July 1, 2009 to June 30, 2011), there is a lot of uncertainty, so unfortunately, we don’t have solid facts and figures to share with you today.
In this context, we know that we will continue to play a key role in the solution to Ohio’s and our nation’s economic challenges. The significant strengths our University has in place will serve us well as we go forward. Every member of our university community contributes to these strengths, and I want to thank you all for your hard work in making these successes possible. And, thanks to your diligence, the University of Cincinnati enjoys some formidable advantages:
- Our strategic plan provides a strong base for weathering the economic storm. That plan, endorsed by the Board of Trustees in 2007, focuses our efforts on two tasks increasing revenues and identifying efficiencies.
- On the revenue side, we have fortified our budget through larger enrollments and better retention of our students. We have increased external funding from research grants. We enjoyed our most successful fund-raising year ever as we launched our Proudly Cincinnati campaign. In these efforts, we have benefited from a faculty that is not only academically outstanding, but dedicated to quality and student success.
- On the efficiency side, our University has already taken some substantial action to improve efficiency and reduce expenditures. Our institutional austerity measures of the last several years, coupled with a fairly conservative approach to managing the University's financial assets, have lessened the impact so far. New policies to improve our cash-on-hand balances, to pay down our structural deficits, to enact realistic performance-based budgeting and to live within our construction budgets were already in place before the global economic crisis emerged. The ongoing review of our academic programs, collegiate restructuring and administrative streamlining are continuing to contribute to an improved financial situation. Our budget process is broadly representative and co-managed by the Provost and by the Senior Vice President for Administration & Finance, working with the college deans and vice presidents. Together, we are responding to this challenge.
- Finally, we must acknowledge, as a state institution, the extraordinary efforts of Governor Ted Strickland, Chancellor Eric Fingerhut and the Ohio General Assembly in protecting the state’s investment in higher education. The visionary commitment we have seen in recent years in Columbus enables us to build our response from a good foundation.
Although we know that the next year or two will reveal some enormous challenges, we will face them with significant strength.
It is all but certain that some programs will be phased out; some jobs abolished. But we will not balance our budget on the backs of our students. The bulk of our efforts must be focused on cutting our costs, not their continued access to a quality education. While we may not yet know the full impact of the economy on our budget, we know that we will not be able to respond with normal budgetary restraint. Just as we have all shared in our recent success, we must brace ourselves for a time of shared sacrifices as we continue to work toward our goals. Every part of our University will have to share the burden.
In these uncertain times, we must act and act decisively. While a financial crisis is certainly a concern, we must also try to accept it as an opportunity. We must be even more creative, make difficult decisions, and reassess our priorities. Our task, working together and drawing on the expertise, experience and creativity of our entire team, is to make the right decisions. We must position our University for the economic recovery we know will arrive eventually. We must consider every viable opportunity. Everything barring a substantial increase in tuition must be on the table for consideration.
The bottom line is this: The University of Cincinnati will survive this crisis. We have a plan in place, a record of effective financial adjustments, and a dedicated team working to address these challenges. We know that we will have to make sacrifices, but we will share these sacrifices as we work toward our common goals. We will endure these difficult times by working together all of us.
I want to thank you again for your dedication, creativity and persistence on behalf of our great university. Because of your efforts, we are better prepared for the challenges ahead.
cc: T. Perzigian, M. Rimai