ASU - Jonesboro:  Belt-tightening process
will minimize impact on students, instruction

Nov. 19, 2004 -- Arkansas State University announced today that a "belt tightening" process is underway to keep the university's budget healthy for the 2004-05 year.  Budget managers throughout the university will monitor major purchases, but the core mission -- instructional activity -- will not be interrupted, according to Jennus Burton, vice president for finance and administration.

With an educational and general budget in excess of $100 million per year, Arkansas State University is a very large enterprise.  Like a business operation, it must maintain a proper balance between revenues and expenses.

Those who manage the budget anticipate that by making mid-year adjustments now, more drastic steps can be avoided later.  Overall, budget managers hope to reduce planned expenditures by about two percent, or about $2 million, primarily affecting non-instructional activity.

University administrators have developed the "belt-tightening" strategy to minimize impact on operations while continuing to conduct instruction, research and other critical functions, Burton said.

Budget managers throughout the university have been directed to follow these action steps:

• Employee vacancies, with the exception of research and teaching faculty, will not be filled during the current fiscal year ending June 30, 2005, unless the position is critical to the operational well-being of the university community.
• Purchases of new equipment, supplies and services will be scrutinized closely and postponed whenever feasible.
• Travel for continuing education and professional development conferences and activities will be curtailed.

Administrators believe these steps will be adequate to manage the budget for the current academic year.  Planning for next year's budget, which will be adopted in the late spring, will be guided by the Arkansas Legislature's funding decisions during its session that starts in January and by spring enrollment numbers.

In anticipation of the question that employees will ask, ASU administrators emphasized that these steps will have no effect on salaries and benefits to current employees.

Also, the budget adjustments will not affect construction and the related contracts, for which money has already been committed.  Most of the buildings under construction are financed with bond issues, which are retired with user fees (such as rental of family housing), not tuition or other current operating funds.

Several unusual and somewhat inter-related circumstances affected ASU's budget this year and necessitated the belt-tightening.

For example, enrollment is down slightly this year (full-time equivalent enrollment was 42 students less than last year).  That affects not only tuition revenue, but also Auxiliary Budget sources such as housing and food services.  The Reng Center is still undergoing renovation and is not generating as much revenue as it will when completed.

The Educational and General Budget will have additional obligations this year, such as the enrollment management initiatives, implementation of the new central computing system for all student and university records, and additional full-time teaching positions.

Also, the university has reallocated some existing funding resources in an effort to meet legislative mandates for which there was no additional funding, including producing more nursing and teacher education graduates, and to promote a more diverse educational environment.