Chancellor Thomas C. Meredith
FY 03 Amended Budget
Senate Appropriations Committee
4:30 p.m., Thursday, February 27, 2003
Room 341, State Capitol
Thank you Mr. Chairman.
Today is a serious day.
Please permit me to dispense with my usual pleasantries.
Let me speak plainly.
In January, Governor Perdue gave a powerful and plainspoken Budget Address. He said: "We cannot afford to shortchange the children of our state or those who seek a higher education. We cannot expect our economy to grow stronger if we do not invest in producing educated minds."
Those are powerful and direct words. I would like these words to stand as the framework for the points I will make.
Five times in the last 15 months we have been asked to make budget cuts.
Five times, the University System has understood your budget dilemma and reacted, thanks to the advance notice you provided.
Five times we've been able to implement each ordered cut, although the results have taken a terrific toll on our campuses. We have fewer faculty to deal with an increased demand on our services.
As I have told you, we have grown in numbers equal to adding another Georgia Tech to our System this year.
Now, today, I'm appealing to you to understand where I'm coming from with this proposed sixth cut.
I understand your decision-making as it relates to pine trees. I like pine trees - I understand how important it is to protect this valuable economic resource.
But I do not understand when you say, "No more cuts for forestry," and yet you ask the University System for $17 million on top of our $184 million in cuts.
I seek your understanding that growing students is as important as growing trees.
I understand the importance of motor vehicles. But I do not understand when you say, "No more cuts for motor vehicles," and yet we must find $17 million in new cuts in the University System.
I seek your understanding that adequate classes and instructors for students are as important as car tags and license renewals.
I understand your decision-making regarding corrections. We need to keep our citizens safe.
But I do not understand when you say, "No more cuts to corrections," and yet you ask us to cut and cut again in our 34 colleges and universities.
I seek your understanding that students are as important as prisoners. What's the difference in the argument that more guards are needed for more prisoners and more teachers are needed for more students?
Mark Twain once made the following point of understanding: "When I was a boy on the Mississippi River there was a proposition in a township there to discontinue public schools because they were too expensive. An old farmer spoke up and said if they stopped the schools they would not save anything, because every time a school was closed a jail had to be built."
That was terrible public policy in 1900 and it's unsound today.
But it's where we are headed with this new round of cuts. We are no longer talking about careful budget surgery.
We are talking about surgery with a chainsaw.
And, consequently, the chances for the patient's recovery are reduced.
This new round of cuts at this date leaves us no room for recovery.
For example, the $17 million proposed cut equals an annualized cut of $68 million.
And how do we reach this number at this point in the fiscal year?
With only four months left; let's look at the options.
First: personnel. Approximately 83 percent of funds from state appropriations are for personal services - the largest share of our budget.
Over half of this personal services amount is for faculty salaries. They are contract employees who are in the middle of a semester teaching our 233,000 students. I can't even imagine the impact on Federal financial aid.
The remaining personnel would have to be given notice of up to a month. This along with accrued vacations, added to the months they already have been paid, account for 11 months of the current fiscal year.
So, savings from layoffs would not begin to accrue until approximately June 1. To exercise this option would cost more than 5,000 University System staff employees their jobs. Is this the path you want us to take?
Second: operating expenses. The remaining 17 percent of our budget is in this area. However, due to fixed costs and semi-fixed costs such as lease payments, electricity, water, power, and contractual obligations, as well as the operating costs already paid over the first three quarters - we've already depleted over 90 percent of these funds.
So do we shut down all non-classroom spaces?
Seventeen million dollars or one percent of our budget may not seem like a lot. But given that we've either already spent funds for the first eight months or have committed dollars for the remaining four months, we're not talking about one percent of $1.5 billion.
The available pool is much, much smaller, and so the percentage impact of the cut is much, much larger. In fact, the true percentage of this new proposed cut on our budget for the last four months is closer to 25 percent.
Let's look at how we can reach the one percent new cut from a different perspective.
While the state appropriates $1.5 billion of the University System's budget - the total budget is $4.5 billion - which represents a three-to-one return on the state's investment. And the state appropriation to many of our institutions, such as the two-year colleges, is quite small.
For example, state appropriations to ten of our smallest institutions total $18 million in the fourth quarter. These colleges are: Waycross, East Georgia, South Georgia, Bainbridge, Coastal Georgia, Atlanta Metro, Floyd, Gainesville, Middle Georgia and Gordon. So to save the one percent for the rest of the current fiscal year, would you have us tell these ten colleges to turn out the lights, lock the doors and tell their students to go home and try again next fall? Is this really the option you want to follow?
While these institutions are critical, they are not where most of the $1.5 billion in state appropriations goes. The majority of state dollars goes to UGA, Tech, Georgia State and MCG.
It is no accident that Georgia Tech and UGA are ranked by U.S. News & World Report as the 9th and 18th best public universities in America. That happened because you invested in these institutions.
Those rankings are based upon quantitative measures that indicate academic quality. These include: graduation and retention rates; faculty resources and student/faculty ratios; salaries; degrees held by faculty; proportion of faculty that are full time; student quality; and financial resources.
And because of your investment in the System, we have attracted some of the world's best faculty to work here. We are now bringing almost $800 million into Georgia through our research, grants and contracts. These dollars have a ripple effect on Georgia's economy.
As you can see, all of these factors are being impacted by budget cuts.
Georgia College & State University isn't one of the nation's top public liberal arts universities by chance. That happened because you invested in this goal.
North Georgia College & State University isn't one of this nation's leading military institutions because of tradition. It's due to your investment.
That's what we have built for Georgia with public higher education.
And that's what you are in the process of dismantling. We are a reputation-driven industry. This national reputation did not come easily or quickly. We are talking about actions that destroy a national reputation almost overnight.
I've asked our presidents to respond with their plans if this new round of cuts were to be enacted.
So let me walk you through what will happen on our campuses. It is not a pretty picture.
State support for research at UGA helps the university leverage $320 million in annual outside grants and contracts. Additional cuts would put in jeopardy current UGA work on the West Nile virus, bio-terrorism threats and agricultural water management.
Georgia Tech would put the Georgia Tech Regional Engineering Program on hold.
The Medical College of Georgia would see their efforts to create a biomedical industry in the Augusta area put on hold - with short- and long-term negative impacts on the health of Georgians and on economic development.
Macon State would find it's critical new campus to support Robins Air Force Base and defense contractors threatened.
Valdosta State's service to 41 counties would be threatened.
Georgia Southern would cut its programs in Dublin, Brunswick, Hinesville and the Coastal Georgia Center in Savannah.
Every campus would face similar decisions.
And the state's libraries are not exempt with this latest round of proposed cuts. This would bring their total cuts to 17.5 percent.
Those libraries serving the most economically depressed areas of the state would be the most severely impacted, because these are the most dependent upon state funding for basic operations.
These examples are where we will have to go if additional cuts are forthcoming in the FY'03 budget.
We have been good team players. But there are times when team members have to speak up and speak out.
We have been partners in the cuts up to now. We have tried to help because the Governors of this state and the General Assembly have treated us fairly and equitably.
Both have clearly recognized the value of this state's higher education system to Georgia's economic health and long-term success.
When education is not protected in lieu of other areas, I'm afraid perspective has been lost.
I don't believe the citizens of this state would agree with the choices that are being made at this point. To take apart this state's higher education system - a system admired by the rest of the nation, a system that is changing lives in Georgia on a daily basis - to take it apart as a matter of choice is beyond my understanding.
I submit to you that education is the engine that will revive this state's economy.
We have a shared responsibility for fiscal prudence. And we will continue to work with you. But we also have a responsibility to preserve the core mission of this great system of public higher education that you have so carefully built over the years.
And with these new cuts, we simply cannot fulfill that responsibility as we should. We move from the realm of careful management into the realm of dismantling our institutions. What you do to us impacts constituents in every county in Georgia.
For a state that ranks near the bottom of the nation with the percentage of its 18 to 24-year-olds in postsecondary education, to consider reducing opportunities is absolutely unthinkable to me.
Mr. Chair, you asked that I come before you and speak plainly. And I have been frank. There is too much at stake for Georgia to do otherwise.
Our options for this fiscal year are exhausted outside of what I have outlined.
We have worked closely with you over the past tough months. We have understood.
Today, I simply want to ask you for your understanding of the University System. NO MORE CUTS THIS FISCAL YEAR!