LITTLE ROCK, Ark. – The University of Arkansas System Board of Trustees approved the $389,633,073 budget for fiscal year 2010 presented by University of Arkansas Chancellor G. David Gearhart. The budget represents a 3.8 percent increase in spending over the previous year – but virtually all of that increase is for what are termed “unavoidable” costs, such as increases in utilities and insurance premiums.

The budget reflects anticipated expenditures from all unrestricted funds.

“The university will be operating within its leanest budget in years through at least next June,” Gearhart explained. “For example, faculty, administrators and other non-classified staff members will not receive pay raises this year. The state’s new pay plan for classified staff will only be partially implemented. Plans for most new programs and staffing needs have been shelved for at least a year.

“These are difficult decisions to make, but necessary if we wanted to remain fiscally responsible,” he added. “They also allowed us to hold the line on tuition during what is sure to be a challenging year when so many students and families who are struggling through these unprecedented economic times.”

Although the university received about $250,000 less in permanent state funding than last year – a year in which the university experienced a cut of $5 million in state appropriations – the governor and the state legislature were able to appropriate nearly $2.8 million in one-time federal stimulus money.

“We greatly appreciate the efforts of Governor Mike Beebe and the state legislature in making available these much-needed temporary funds,” said Gearhart. “However, it would be irresponsible to budget these funds for ongoing expenses such as salaries, especially since next year’s state revenues will depend on a very uncertain economy. For this reason we plan to hold this one-time appropriation in a reserve contingency fund to help deal with any unexpected or emergency expenses that will invariably arise during the fiscal year.”

The university generated $3.866 million more revenue than expected from increased enrollment in 2008 and 2009. That money will be used to fund the 3.8 percent budget increase for fiscal year 2010. This will cover such expenses as state-mandated pay increases for classified employees ($561,079); increased utility costs ($727,450); and restoration of funding for Chancellor’s Scholarships ($300,000).