The University of Toledo will trim 1.5 percent from its operating budget this year, and chop 3 percent from the entire budget for the fiscal year beginning July 1.
President Sharon Gaber announced the across-the-board reductions Wednesday in an email to faculty and staff. The cuts will amount to about $600,000 this year and roughly $8.7 million for the 2017 fiscal year.
A lower-than-projected fall 2015 enrollment contributed to the budget hole this year. While the university is forecasting steady enrollment next year, officials said UT needs to address increasing costs and stabilize finances to avoid similar midyear cuts in the future.
“Part of my doing this is to try to be proactive,” Ms. Gaber said. “I want a budget that is realistic.”
More than 80 percent of the university’s budget covers employee compensation, such as salary and benefits, said Lawrence Kelley, interim chief financial officer.
Layoffs and pay cuts are not planned as part of the budget reductions, but some open positions could go unfilled.
“Our people are our greatest asset, and I have to think about how to protect them, but we also have to be fiscally sound. We want a great institution for our students to thrive. We have to be sound to do that,” Ms. Gaber said.
In the next couple of weeks, leaders of the various colleges and departments will be given a target dollar amount to cut.
Operating cuts could include reducing money spent on supplies and travel, among other areas, said Mr. Kelley.
The budget woes don’t come as a surprise. In October, Ms. Gaber announced an eight-month hiring freeze aimed at helping to plug about $5 million of an estimated $11.5 million shortfall caused in part by lower-than-expected enrollment.
This year’s budget, approved before Ms. Gaber assumed the presidency, anticipated a 2 percent increase in undergraduate enrollment and a steady graduate enrollment, but enrollment dropped by nearly 1.5 percent.
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UT will also try to make up this year’s shortfall by consolidating administration posts and scrutinizing pay increases. The school is looking at ways to save money on utilities and on snow removal because of this season’s mild winter.
UT gained 66 students this semester compared to the spring of 2015; it was the first increase since the 2010-2011 year, when enrollment peaked with a record 23,124 students.
Next year’s budget, which goes into effect July 1, will anticipate an even enrollment. Officials won’t know student numbers until the end of August, but Ms. Gaber expects any growth to be modest.
The state budget froze tuition rates for public universities and colleges for the current school year and next. UT trustees this week approved a 2 percent housing rate increase for next year, and will continue to “look at revenue opportunities,” Mr. Kelley said.
In her email, Ms. Gaber told officials the university must “grow” its way out of a history of annual budget cuts and said she has “no interest in repeating this exercise in the future.”
The fiscal year 2017 budget will go before trustees for approval in June.