Home » Budget Presentations
Chancellor Thomas C. Meredith
FY02 Amended Budget Presentation
January 10, 2002
Room 341 State Capitol
- Thank you, Mr. Chairman. I'm excited about the opportunity here in Georgia.
I'm pleased to be a part of your wonderful state. I look forward to getting
to know you and to work with each of you over the coming months and years.
- Together, we have the opportunity to move forward toward our shared
goal of creating a more educated Georgia. As one who has watched with much
professional interest, the University System of Georgia has an outstanding
national reputation. It is a strong system. And this is the result of your
commitment to public higher education.
- Let me give you some exciting news from the Fall 2001 semester that
illustrate the great return your investment in the University System is
generating.
- We had a record high enrollment - 217,546 students.
- Our EFT enrollment is up 6.1 percent from fall '00 to fall '01.
- The average SAT score of our first-time, full-time freshmen class is
a record 1026: that's six points above the national average.
- The percentage of freshmen with remedial requirements is 15.1 percent.
That number is headed in the right direction - down.
- And two other numbers are headed in the opposite - and right direction
- up. The percentage of our freshmen who satisfied the College Preparatory
Curriculum requirement in high school stands at a high of 89.3 percent.
And our retention rate, from fall '99 to fall '00 also is up -- to 72.8
percent.
- Truly, when you look at these key numbers, quality counts and investment
pays.
- But I understand the financial constraints imposed by the current economic
climate. And my study of the University System's response to the Governor's
call for budget reductions leaves me convinced that the System and the
institutions have responded appropriately and fully. We are mindful of
our role as financial stewards of the state's resources.
- But we also are mindful of our responsibility. Public higher education
must continue to play a critical role in the state's economic growththrough
its missions of teaching, research and service. Your investment has indeed
paid off in quality.
- It was seventy years ago this month that the Board of Regents held its
first official meeting. Over the years the many great Georgians who have
served on this board and the chancellors who have worked alongside them
have faced many great challenges. But they have never forgotten that ultimate
mission - to create a more educated Georgia.
- With that thought in mind, let me move into the Governor's recommendations
for the FY02 Amended Budget. And I've brought some folks you know well,
who are ready to assist me in answering your questions.
- The University System's items - excluding capital - are located on pages
46, 47, 48 and 49 of the tracking sheets. My plan, Mr. Chairman, is to
focus on each page. Time will not permit a detailed reaction on each and
every item. I will tend to follow this pattern: additions and then reductions.
- Please look on page 46 of your tracking sheet. The first two additions
I will mention are truly cornerstones of our budget. They are major issues
-- critical to the System's welfare.
- Item number 8 is the $30 million pledged to the University System by
the Governor to help offset funding challenges from semester conversion.
- This is a critical item. Our institutions are counting on these dollars.
Commitments regarding the academic year have been made. These dollars are
essential for us to meet our teaching responsibility.
- Next key cornerstone is for Health Insurance. This is on page 46, item
number 9. The Governor has recommended $19,368,768.
- The transition to the Preferred Provider Option (PPO) has helped control
costs
- As you may recall, this item goes back to January 1, 2001, when the
employer share of the premiums increased. At that time, the Governor recommended
and the General Assembly funded only a portion of this premium increase.
This item reflects the balance of that employer share of the increase.
- In addition, these new funds would help provide funding for a employer
premium increases of 5-10 percent that went into effect Jan. 1, 2002.
- The recommendation would cover the employer share of this increase -
our employees already are paying their share of the increase with increased
payroll deductions.
- I want to be clear: the transition in January of 2001 to the PPO program
for the System's employees has helped to control costs.
- We are in a much better position today as a result of this shift. But,
as you are all aware, over this past year,
- the rise in health insurance costs and premiums has been steady and relentless.
- All of you are aware of the ICAPP Advantage program and its role in
job creation. Today, that role is more important than ever. So we are pleased
that the Governor has recommended $414,154 for ICAPP. This is found on
page 46, item 10 on the tracking sheet.
- Our ICAPP staff informs me that they have pending needsthat would help
meet the state's demand for information technology and health care employees.
As you are aware, this state and this nation face a severe shortage of
workers in the health professions. Through ICAPP, we can efficiently and
rapidly help meet some of these shortages.
- Item number 13 is to provide $800,000 in additional funds for the Technology
Enhanced Learning Center at the State University of West Georgia. This
was discussed in the last session and agreement was reached to delay this
item until now.
- Mike Cassidy and Russ Toal have addressed items 11, 12 and 14 as well
as items 1 and 2 under the Cancer Initiative.
- Now let's talk about the page 46 reductions.
- On page 46, in the "A" budget, items numbered 1-3 deal with changes
to the Teachers Retirement System. The total reduction is for almost $11.7
million.
- Item number 4 on page 46 will cut the System's MR&R funding for FY02
by almost $12.2 million. I wish to return to the issue of MR&R when I get
to bonds.
- Items number 5 and 6 are reductions to meet the Governor's call for
all state agencies to reduce FY02 budgets by 2.5 percent in targeted areas.
Item 5 would reduce funding for our Special Funding Initiatives; item 6
for other line item programs.
- And item number 7 is the mandated 2.5 percent cut to the formula taken
directly by our institutions.
- Most of the institutional cuts for FY02 are in the areas of vacant or
lapsed positions ($18.1 million), travel reductions ($2.2 million), cuts
in purchases of operating supplies ($7.9 million) and cuts in equipment
purchases ($6.6 million).
- Absorbing these cuts will be difficult, however, without the recommended
$30 million for semester conversion, this would be severe.
- Let's move to page 47 additions.
- Turning to page 47 of the tracking sheets, please look at item number
4. This is a $1.66 million recommendation for the State Public Libraries
for Internet Filtering.
- I do not know what the Governor's FY03 recommendations will hold for
the libraries, but here are some other needs.
- Books and materials - Georgia has long ranked near the bottom nationally
in expenditures for books and materials. Our modest $2 million request
would have been acorrective start.
- Renovations and repair - our $2 million request would have reactivated
a construction program dormant since the mid-1990s and address needed repairs
and renovations.
- Computers - In 1998, Georgia funded a state wide roll-out of computers
for the public libraries. Many are now at the end of their useful life.
The regents $2.3 million request would begin to place these computers.
- We will work with you to explore ways in which these needs can be addressed.
- Returning to the tracking sheet, Items 5, 6 and 7 on page 47 are self-explanatory.
- Now to page 47 reductions.
- Items 1 and 2 on page 47 again deal with the Retirement System and reflect
a total of more than $2 million in reductions.
- Item number 3, totaling $5,174,082, fulfills the "B" unit 2.5 percent
reduction requested by the Governor.
- Item number 8 on page 47, a reduction, and on page 48, item number 1,
an addition, will be addressed by Jim Lyle.
- Let's move to the other page 48 additions.
- Item number 2 on page 48 is a $3 million recommendation to enhance the
seed capital fund to support a statewide biotechnology and associated life
sciences industry. Mike Cassidy has addressed this item.
- And finally, the page 49 additions.
- Lottery Funds: The FY03 request has been recommended in the FY02 Amended:
please see page 49, items 1-4 on the tracking sheet. The total recommended
of these four items is $31.7 million.
- I would single out one item. The Governor has recommended the full $15
million we requested for the Equipment Technology & amp; Construction Trust
Fund (ETACT). This has been a great program, in part because of its private
match component.
- As I mentioned earlier, I don't know what Governor Barnes' FY03 recommendations
will include. But I want to take a moment before moving on to the capital
outlay recommendations to mention one important item.
- That is the Eminent Scholars program.
- In the FY02 Amended request the regents submitted to the Governor was
a $4.75 million item to clear out a backlog of Eminent Scholars positions.
- The Eminent Scholars Program has been a terrific tool to bring top talent
into Georgia - along with their research dollars and related business interests.
- In addition, it has helped our institutions create new relationships
with the private sector, as the requirements for the program include a
significant dollar match from the local community.
- It's such a successful program that currently we have 13 private donor
commitments to fund chairs at seven institutions, but no matching state
dollars.
- Given our current budget situation, I can understand the Governor's
lack of a funding recommendation. But I urge you not to forget this important
program.
- Let me now move to the capital outlay recommendation, which is covered
on pages 62 and 63 of your tracking sheets, items 3 through 6.
- The Governor has recommended 28 projects, totaling $219.4 million -
of which $201.4 million is specified for the University System.
- $86,580,000 has been recommended for the first 7 projects on Major Capital
Outlay List - but construction money only for the first three. The other
four would receive funds just for design.
- The three receiving design and construction funding are: MCG's new Health
Sciences Building, item 4a; Georgia Tech's Klaus Advanced Computing Building,
item 4b; and the Bartow Center for Floyd College, item 4d.
- The Governor has recommended equipment for the first project to come
online this year from the six previously funded major projects. This is
the new ABAC Agricultural Sciences Building (3a). He has promised to equip
the rest as they are completed next year.
- The Governor recommended 8 minors projects totaling $28,115,00.
- The Governor also has recommended 10 other projects, totaling $68 million.
These include: five University System institution-related projects; the
Yamacraw facility, item 3b; the Governor's Traditional Industries program,
item 7; and the Georgia Research Alliance, item 8; and pass-through projects
for Georgia Military College (item 4e) and the former Tift College (item
5c).
- The Medical College of Georgia's new Interdisciplinary Research Center
is well on the way to completion. The Governor has recommended our full
$5.2 million request for this new facility in bonds as part of the capital
outlay package. This is on page 62, item 5b on the tracking sheet.
- The majority of the cost of the center was provided with $21 million
from the MCG Foundation, the MCG Research Institute and other, non-state
sources.
- I had said I wanted to return to the issue of MR&R funds.
- In the original FY02 Budget, the Governor recommended and the General
Assembly approved $54 million in MR&R.
- To help with the state budget crunch, OPB asked us to return any unallocated
dollars. That is the $12.1 million reduction in MR&R you see on page 46,
item 4.
- You will notice in the bonds section, Item 4c on page 62, a bond recommendation
of $31 million.
- The important point here to understand is that this leaves us with only
$31 million for the next 18 months for MR&R needs. Let me be clear - this
recommendation means no new MR&R funds for FY03, other than what we have
left over from this $31 million.
- As you can see - there are serious challenges we must meet that have
both short- and long-term implications for our ability to sustain the quality
improvements we have made and Georgia deserves. We will continue to work
with the Governor and with you to meet these challenges.
- But there also is opportunity here - and a great deal of substance.
In addition, and as you are aware, there is a lot of "meat and potatoes" in
the FY03 budget; but I'll save that until the appropriate time.
- Thank you for the opportunity to discuss the FY02 Amended Budget, and
I'll be happy to take your questions.
