The University of Wyoming must cut $35 million from its budget in the fiscal year 2017-2018 biennium, Gov. Matt Mead told the UW Board of Trustees on Wednesday.
“Our revenue picture, roughly, in the state right now is about what it was in 2005 and 2006,” he said. “The University of Wyoming budget since that time period has grown 38 percent since 2005-2006. What I have asked the agencies across the state to do is look at about an 8 percent cut. The University of Wyoming, as it is the second largest user of general fund dollars — we’re asking for a bit above 8 percent. The number is $35 million.”
The $35 million will be in addition to several other budget requirements already in place, Vice President for Administration Bill Mai said.
“(The Legislature) enacted the penny plan of what amounts to a percent-and-a-half reduction, or close to $3 million per year (cuts) on our block grant,” he said.
The Legislature also has footnotes related to a new fiscal system, essentially requiring $5 million of the soon-to-be-reduced block grant go toward its payment during the biennium, Mai explained.
“Then we have other considerations — we have an unfunded utilities spend that’s been identified in a prior internal audit that we’ve prioritize and said, ‘We’re going to find a way to fund our utilities before they drain all of our reserves.’” Mai said. “I would characterize that as about a $3 million-per-year additional problem we have to solve quickly.”
With everything added together, Mai estimated the actual reduction to UW’s budget is $51 million in the coming biennium.
UW administration regularly brings supplemental budget requests to the Legislature every year, normally for specific problems or projects. Mead said this can still be used for important funding problems.
“Some (requests) I have agreed with, some I have disagreed with, but the fact of the matter is I have never seen supplemental requests that did not include things that, I don’t think anyone would argue, are not only necessary, but necessary right now,” he said. “I will anticipate that again as we head into this next session — that there will be some supplemental requests that are needed.”
Mead also cautioned to more cuts could come in future fiscal years.
“I’m asking for $35 million now, but if the revenue picture gets worse, I may have to ask for more,” he said.
Months of discussions have been ongoing, trying to find various ways of dealing with the likely cuts, although none are set in stone.
“I don’t think it will be a surprise to any of you to hear the notion of furlough days thrown out there, pay cuts have been thrown out there, early retirement has been thrown out there — all of those notions carry their own challenges and risks,” he said. “It’s a matter of balance and potential harm to the university and the employees.”
Many funding areas, including employee benefits, will need to be reduced, Mai said.
“The sad truth is, you are going to lose some positions here,” he said.
Some of these can be eliminated through attrition, such as retirement, but that might not cover all of the university’s needs.
The cut won’t likely be split evenly between the two years, Trustee John McKinley said. Removing current programs or departments takes time and would not be completed before the FY 2017 begins July 1.
“Recognizing we have a very short time period when the new president’s going to be here and get a handle on the (2017 budget), she’ll have a much longer time period to deal with the 2018 part of the biennium,” he said. “So, it’s envisioned that the process may not be equally distributed as to cuts of equal size in the 24 months.”
UW President Dick McGinity said the UW deans do not want to have a flat cut to the colleges.
“The most constructive responses have been, ‘Let us not do anything that resembles an across-the-board proportional distribution — let us be strategic, let us go to what are the core missions of this institution and its core responsibilities to the state, and that’s where we have to start,’” he said. “If a program supports it, then that will survive, it might not survive in the form it is today, but it will survive.”
Incoming President Laurie Nichols, set to take office Monday, has been continuously updated on the budget situation and will likely be her primary focus for the near future, Mai said.
The announcement comes at the 11th budgetary hour. UW’s budget needs to be completed and approved before July 1, which could not be done before the magnitude of the final budget cut was clear. Mead’s announcement is almost a relief, Trustee John MacPherson said.
“I know it’s difficult, but it gives us a figure that we needed and for which we can now work and take the steps necessary to ensure its implementation, frankly, as hard as it’s going to be,” he said. “We needed a figure, we got a figure, and we can now move forward.”
A trustee special meeting in June will likely be called to finalize the budget.
Mead also made a request for growing the state’s economic diversity.
“I ask the university if they would share an opportunity with the executive branch, my office and future governor offices, on building a program for how we are going to diversify this state,” he said. “This is not a quick fix — it’s nothing magical.”
A 20-year plan to integrate new economic divisions, such as technology companies, could start bringing diversity to the state, Mead explained.
Trustee President Dave Palmerlee said the trustees and UW are up to the task.
“As president of the Board of Trustees, I pledge to you that this board will work with your administration to deal with these cuts in a responsible way while maintaining the excellence of the university,” he said. “I know you can count on us.”