UT revenue projection drops with enrollment

Board of trustees OKs leaner fiscal budget


The University of Toledo’s academic budget will be noticeably slimmer than was proposed last year, with enrollment declines in large part driving reductions in revenue.

The university’s board of trustees Monday approved UT President Dr. Lloyd Jacobs’ proposed fiscal year 2014 budget, a framework that projects spending for total operations increasing slightly, but with significant cuts to nonclinical operations.

There were few surprises in the budget. University administrators have repeatedly talked of tight times in recent months, with revenues for fiscal year 2013 about $20 million less than what was projected last summer.

Earlier this year, administrators announced plans to cut between $14 million and $17 million from academic programs, including reductions in adjunct and visiting professors, the elimination of positions through attrition, and an increase in teaching loads for full-time faculty.

At Monday’s board meeting, David Dabney, the university’s chief financial officer and vice president for finance, called this budget cycle “challenging.”

Total spending for academic and hospital operations were projected at about $757 million for fiscal year 2014, up from about $753 million. The university is projected to operate with a 2.3 percent surplus, but that includes clinical operations and is down from a 5 percent surplus last year.

Nonclinical operations are projected to generate nearly $30 million less in revenue than what was expected in last year’s proposed budget, down to about $499 million from about $528 million.

University leaders chose not to raise tuition for undergraduate students, a decision announced in November. Revenue from tuition and fees is projected to be down nearly $14 million from what was projected at this time last year, in large part because fall enrollment at the university dropped 5 percent from the prior year.

While many area government coffers have experienced slow rebounds from the recession, higher education faces the prospect of continued budget austerity. That, Dr. Jacobs said, is in large part because of a declining cohort of prospective college students, which in turn reduces an institution’s main source of academic funding.

The new budget projects undergraduate enrollment declining an additional 3 percent.

Dr. Jacobs declined to project the scope of possible cuts in future years, but he said continued contraction — not expansion — is on the immediate horizon.

“We will be at this for a while,” he said of cuts. “No question about it.”

Dr. Jacobs emphasized that the university’s budget is cash-flow positive and that it puts students’ needs first.

For the first time in his recollection, the university will transfer a portion of earned interest from UT’s endowment into the general fund. The budget estimates about $2.4 million would be used for operations.

“In the past, we just allowed those funds to accumulate,” Mr. Dabney said.

Board members unanimously approved the budget without discussion.

Contact Nolan Rosenkrans at nrosenkrans@theblade.com, 419-724-6086, or on Twitter @NolanRosenkrans.