State budget cuts asks Texas agencies to reduce finances

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Governor Rick Perry’s call for Texas agencies to cut spending over the next two years has prompted a statewide search for fiscal inefficiencies, a search UT will undertake in the next few months. It is currently unclear how these reductions will affect universities across Texas.

Perry and the Legislative Budget Board, a committee of the Texas Legislature that oversees budget analyses and recommendations, sent a letter June 4 directing Texas agencies to keep their 2014-15 budgets below the 2012-13 biennium expensed and budget total. It also called on state agencies to identify proposals to further reduce budgets by 10 percent. These proposals will ultimately be decided upon when the budget board meets in January.

Mary Knight, associate vice president of the UT budget office, said a 10 percent reduction for UT would amount to a $59 million cut over two years. Knight said it is unclear how UT will be affected if the Legislative Budget Board approves the reduced budget proposals.

Officials in the governor’s office said every agency in Texas is being asked to search for inefficiencies within their budgets and to propose reductions.

Knight said UT has an ongoing five-year budget planning process that involves deans from respective college and vice presidents who collaborate with the president and provost to determine strategic priorities for each unit of the University.

“At this point, the reductions are part of a planning process for next legislative session,” Knight said. “Until the legislative session begins in January of 2013, we will not have the details of how this may impact UT Austin.”

Michael Morton, president of the Senate of College Councils, said it is difficult to determine where the cuts will be made within the University at this point if the Legislature asks state institutions to cut their budgets.

In the 2011 legislative session, the Texas Legislature cut 17.5 percent of UT’s budget, or $92 million, over two years. Morton said cuts made in the last budget cycle resulted in the loss of valuable administrators and staff members. He is a member of the President’s Student Advisory Council, a group of 12 students who guide the University president in matters relating to student interests, including finances and tuition.

Morton said UT is currently already operating at minimal costs, making additional cuts especially harmful.

“There’s a lot of little things that I don’t think people realize are affected by the cuts,” Morton said. “It does take a toll on people and it does take a toll on the university because we’re receiving less and less state funding.”

A 2.6 percent tuition increase proposed by President William Powers Jr. was denied by the UT Board of Regents in May, which Morton said would have made up some of the ground lost by budget cuts.

“I supported the tuition increase of 2.6 percent,” Morton said. “It was a modest increase for the situation that we, as an institution, are in. Ultimately, I thought it was better in the long run for the institution and better for students. Obviously no one wants a tuition increase in an already poor economic climate, which is why state funding is so critical and why we need to continue to get that message heard at legislature.”

Lucy Nashed, spokeswoman for the governor’s office, said Perry has asked universities to avoid raising tuition in the future if the reduced budget proposals are approved. Nashed said Perry has been very vocal about keeping tuition rates frozen.

“Tuition shouldn’t be the first place universities look to raise to revenue,” Nashed said. “He’s still calling on universities to find deficiencies. There’s still a lot that can be done before tuition needs to be increased.”

Nashed said the governor’s overarching vision for the state is to maintain fiscal discipline and to streamline government operation. She said not raising taxes for Texas residents is one of Perry’s goals outlined for this upcoming budget cycle.

“He has asked lawmakers to keep this [goal] in mind, and now we’re just asking agencies to take a look at their budgets and see what savings they could find,” Nashed said. “It’s basically just kind of setting the stage.”

Preservation of the state’s Economic Stabilization Fund is another of Perry’s priorities, Nashed said. Often referred to as the Rainy Day Fund, it is set aside for state emergencies such as natural disasters. According to the Legislative Budget Board’s 2012-13 revenue outlook, the Rainy Day Fund was at a balance of $8.2 billion and is projected to increase to $9.6 billion by the end of the 2013 fiscal year.