The Budget: Background, Institutional Values, Our College and Our People
Dear Colleagues,
It is impossible to escape the financial challenges that we all face: the local, national and world economies dominate the news; the value of retirement investments have fallen; some of us have family and friends who have been laid off; and talk of cuts permeates our work environment. We would like to begin periodic updates to keep you informed about current College finances and future plans and to ask for your help as we make decisions that affect us all.
To begin, it is crucial to stress that the environment we face is very fluid – it changes weekly, if not daily, as new information becomes available and new demands are made. Keep in mind that the College must work closely with both the central University administration and UI Health Care as it moves forward to formulate and implement plans that deal effectively and fairly with this changing situation.
Beginning last July, it became apparent that collegiate revenues would not sustain the historical rate of administrative growth both centrally and departmentally. Because of this we identified a number of budget reductions that could be made within College administration, thereby sparing departments to the fullest extent possible. This produced a $1 million savings in expenses and amounted to an approximately 3% cut in the central College budget.
As we were implementing these changes, the State announced a shortfall in revenue for the current fiscal year (July 2008 to June 2009) and instituted a nearly 1% rescission (withdrawal or cut) in its current appropriations to Iowa State Board of Regents institutions. This time, with the help of every department, the College identified about $750,000 in reductions. In the end, central University administration required only $250,000 of this amount. With the agreement of all departments, the remaining $500,000 of collegiate cuts was placed in reserve in anticipation of further State reductions in the next fiscal year.
In anticipation of cuts for the next fiscal year (July 2009 to June 2010), all university units have been asked to look at the impact on their budgets of 5%, 7.5% and 10% reductions in state appropriations. Most units, including our College, have opted to plan for the worst case scenario. A 10% reduction in state funding translates to an approximately $3 million cut to the College.
Preserving our core missions of teaching, research and clinical service is the primary guiding principle that we embrace as we develop strategies to address a reduction of this magnitude. It must be said again: these are challenging times. But I have a deep faith in the creativity and commitment of everyone within this College and I believe that we can weather these times if we work together.
During the month of February, the leadership of UIHC will hold a series of forums to update faculty, staff and students on the status of the UIHC financial situation. These meetings will include an opportunity to discuss different ideas on how to address these budget shortfalls. Prior to these meetings, if you have ideas, please let us hear from you.
Paul Rothman, M.D.
Dean, Roy J. and Lucille A. Carver College of Medicine
University of Iowa