University of Arkansas to Trim Budgets, Use Reserve Funds and TV Revenue to Address State Funding Cut

FAYETTEVILLE, Ark. – The University of Arkansas will make across the board budget cuts in all divisions, draw on reserve funds and television revenue from the athletic department, and implement a hiring freeze to make up a $3.2 million dollar reduction in state funding for the 2009-10 fiscal year.

This approach means there will be no staff or faculty layoffs, and no immediate furloughs.

“Our faculty and staff are in need of salary increases, not reductions,” said Chancellor G. David Gearhart in a statement sent today to the campus community. “If we are serious about that as a top priority, it would be counterproductive to head in the opposite direction by implementing measures that would take funds from their paychecks. We will hold the possibility of furloughs in the future as an absolute last resort.”

The chancellor also rejected the idea of asking the Board of Trustees to approve a mid-year tuition increase.

“I still believe that holding the line on tuition this year was the right thing to do,” he said.

In recent days the chancellor conferred with the Faculty Senate, Staff Senate, vice chancellors, deans and vice provosts about the budget situation, and said their suggestions were productive, valuable and realistic.

As a result of those meetings the university administration is taking five steps to meet the budget shortfall:

• A hiring freeze on all unfilled positions and any new positions that do not impact the academic quality and integrity of the university. The provost will make the final decision on all positions, academic and administrative.

• A 0.9 percent budget cut for all academic colleges and schools.

• A 1.35 percent budget cut for all administrative and non-academic units. 

• A reduction in travel and equipment purchases for all divisions, academic and administrative.

• Use $750,000 of the television revenue that was committed to academic programs by the intercollegiate athletics department as part of a $1 million transfer of funds, and approximately $640,000 from the permanent reserve funds to help meet the revenue shortfall.

“During these difficult times, it is imperative that we do all we can to keep our academic programs as strong and viable as possible,” said Gearhart. “That is our first priority: to keep the University of Arkansas experience second to none. I know the approach we are taking places more burden on the administrative side of the university, and I only ask our vice chancellors and vice provosts to understand the primary reason behind this decision—the teaching, research and service mission of the institution.”   

All academic and administrative units will be required to submit a list of the permanent reductions in their budgets to the appropriate vice chancellor by Friday, Feb. 19, and those cuts will be reviewed by the chancellor’s executive committee.

The university originally reported it would need to make $2.6 million in cuts, but then learned that the state was also making reductions to the Educational Excellence Trust Fund that amounted to more than $600,000, bringing the university’s total cut to $3.2 million.

“These are tough times for higher education and the state in general,” Gearhart said. “While perhaps not too comforting to hear, we are still much better off than most institutions across the nation. We have worked hard at cost containment and increased efficiencies, and our efforts have resulted in identified and projected savings of approximately $11.5 million just these past 18 months. We will continue to be good stewards of the resources we have and find additional ways to save funds.

 “I am convinced we will get through these tough fiscal times with our quality intact and we will find a way to continue to progress as the state’s flagship university.”