I want to address the FY 04 budget in the larger context and long run. We have challenges as I noted last spring. Our task is serious but it is not undoable. We can sustain and advance liberal arts education and academic integrity with reallocations. Last years processes for base budget review, budget construction, enrollment management forecasting, strategic planning and the Board fall workshop uncovered significant challenges with our persisting as a community in our historical and previous budget assumptions and planning.
Academic Affairs expenditures came in over $500,000 from the submitted budgetcost of hires, contract changes of 7ths and 6ths, cost of sabbaticals, Nursing program competition at St. Cloud State, NCATE supported changes, Academic Advising increases among others caused a significant gap between expenditures and budget. Also, there were new classes added due to enrollment.
The end result of all the discoveries and changed goal setting from August to March was to take a longer viewto move to reallocations as a necessary and prudent part of funding the future of the Coordinate Mission.
Other vice presidential units contributed much more to the formation of the FY03 budget through reallocations and increased revenue/fund raising effortsnamely 1.7 million compared to $125,000. Also, commitments were made in future budget cycles by those non-Academic units to reallocate an additional $870,000 between FY 04 and FY 06 budgets.
Due to the centrality of Academic Affairs, faculty contracts and curricular delivery complexities we were supported by the presidents to reach a $1,000,000 reallocation over four fiscal years beginning in FY03. This reallocation from Academic Affairs to Academic Affairs was to move monies to an articulated higher priority in support of faculty salaries and faculty development. We must now deliver by the end of October on those reallocationscollaboratively before the November budget presentation to the Boards. I will be working with Academic Budget and Planning Committee, FGCC and others to deliver on those reallocations. If we cannot come to a general consensus, I will have to use my authority in my areas of discretion to achieve the target of $350,000 for FY04 and subsequent targets of $350,000 and $175,000 for the following two fiscal years.
The effects of the recession in Minnesota and the actions of the legislature have exacerbated our challenges as they affect financial aid through work study. Additionally, tensions are developing on electronic resources through the state that might affect library electronic data base access in the Mini-text funding area. Undoubtedly, this will be a year of evolving challenges.
But I want to make clear that the challenges of reallocation are not solely rooted in the economy. or the current recession or stock market malaise. They are rooted also in base budget reviews, strategic direction, competition, and seeking a larger position in liberal arts leadership beyond Minnesota. Minnesota demographic change does not permit us to stay only with our historical student markets. Family disposable income changes do not allow us to depend solely on our historical family income market segments. And, finally, aspirations of the institutions do not allow us to continue to increase all budgets uniformly or to invest in all endeavors to the level of excellence they may warrant in isolated reference compared to the institutional point of reference.
Our capital campaigns will not realize their financial impact in a timely fashion over the next five year period or more. Faculty salaries and student financial aid will challenge us. We must meet responsibly those challenges.
Across the board cuts would have to be sustained for too long a period to achieve an excellence in education that we all can take pride in. Further, fringe benefits challenges and market basket salaries for professional and support staff employees will challenge us in the coming budget cycles.
I look forward to our expeditious and open dialogue. I look forward to support for necessary reallocations. I look forward to important faculty input into the nature and the direction of selective reallocations. The more we communicate the clearer our shared future and academic excellence will be.