The approved budget includes the Universitys Education and General (E&G), designated and auxiliary fund budgets.The FY21 operating budget, down 2.7% from FY20, includes tuition and fee rates to be assessed to students for the 2020-2021 academic year approved by the Board in May, along with expense reductions and revenue increases.

Kathy Mangels, vice president for finance and administration, said the University has developed a three-year budget plan as it anticipates a multi-year impact of revenue fluctuations from enrollment, state appropriation funding levels and other economic impacts related to the COVID-19 pandemic.The Universitys estimated budget need is $20.8 million between FY21 and FY23, including $13.39 million for FY21. The FY21 need is based on an estimated 20% ($8.96 million) state appropriations reduction, $1.2 million of costs to continue operations, including increased retirement contributions, an anticipated enrollment decline and a $170,000 investment in a new Learning Management System to support all modes of classroom instruction.

The University completed a salary market study this past year, comparing current Southeast pay rates by position to applicable local, regional or national data. The study showed 45% of the positions were below the current market rate. The budget approved by the Board includes the first phase of adjustments resulting from this study. The first phase will bring all employees to the minimum of their new salary range and 5% towards the market salary identified for their position on July 1. A second 5% salary increase towards market salary for impacted employees will be implemented Jan. 1 along with a 1% mid-fiscal year salary increase for all employees, contingent upon revenues compared to budget during the first half of the fiscal year, Mangels said. These compensation actions will total $761,363.

The $139 million operating budget approved today, includes $1.13 million in net revenue increases to meet the FY21 E&G budget need from increased tuition rate levels. The University also has committed to a 12.5% reduction in total E&G operating budgets for all divisions to be implemented over the next three fiscal years to meet current and long-term budget needs. This includes $4.29 million in expense reductions to meet the FY21 E&G budget need, including the elimination of 36 vacant faculty and staff positions recommended by division executives and approved by University President Carlos Vargas.

Because the reductions will be implemented over multiple fiscal years, $7.96 million in one-time funds are needed in FY21 to balance the budget until base reductions are implemented, Mangels said. To maintain current operating fund balance levels, these dollars will come from salary savings from vacancies during FY21, undesignating funds for capital and other initiatives and institutional contingencies for major expense categories like utilities and insurance.

The FY21 E&G budget, which supports academic instruction and general operations, totals $96.72 million and includes estimated income of $35.6 million in state appropriations, accounting for 35.8% of the Universitys revenue budget; $57.4 million in net tuition and student fees, representing 57.6% of the revenue budget; and $3.7 million from other sources, accounting for 6.6% of the total revenue budget.

The Regents also approved FY21 operating budgets for the Universitys auxiliary units, totaling $29.98 million. Auxiliary units are those that operate as profit centers, generating enough revenue to account for their expenses. The FY21 auxiliary budget reflects a decline of $4.54 million from FY20, the result of enrollment declines impacting revenues such as general fees dedicated to the Student Recreation Center and Student Aquatic Center and the number of students renting textbooks through Textbook Rental. The Auxiliary budget also reflects Residence Life rate increases approved by the Board in May.