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Regents Approve $2.45 Billion FY10 Budget Request

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Three Potential Budget Reduction Plans Also Presented

Atlanta — August 20, 2008

The University System of Georgia Board of Regents approved today a Fiscal Year 2010 budget request of $2.45 billion, a 6.5 percent increase over the current FY09 budget. But University System officials cautioned the regents that the state’s declining tax revenues probably would mean the eventual loss of some of these dollars.

Accordingly, the regents also approved a plan for reducing this request by 6 percent ($136 million) and accepted plans to guide increasing the reduction to 8 percent ($182 million) and 10 percent ($228 million), at the request of the Governor’s Office of Planning and Budget. All three reduction plans also apply to the current Fiscal Year 2009 budget.

The FY10 request by the regents does include $114.7 million in new dollars generated by the funding formula (a mathematical formula that calculates new dollars needed to sustain University System operations) that reflects a 3. 9 percent increase from fall 2006 to fall 2007 in student enrollment ($79.4 million), health insurance premium increases ($20 million), new retiree benefits ($5.7 million), and operating funds for new facilities ($9.6 million).

And, keeping an eye on the long-term health care needs of Georgians, the request includes $8 million to continue efforts to expand physician education. Funds would be used to develop needed curriculum, pursue program accreditation and expand residencies in Athens, Albany and Savannah. The first class of students at the Medical College of Georgia’s new Athens campus would enter in fall 2010. This effort began in FY08 with state appropriations to address the growing shortage of physicians in Georgia.

The regents also approved a recommendation for $251 million to build needed University System facilities.

“Over the last three years, our student enrollment has grown by 19,400 students,” said Chancellor Erroll B. Davis Jr. “Our commitment is to deliver a quality education to all who qualify and with this budget, the risk we now manage is whether we can maintain that quality for all who wish to enroll. We must manage the risks inherent in delivering the next educated generation of citizens and leaders – and in this we cannot fail and we cannot compromise our standards.”

Presenting the three budget reduction proposals to the regents, Interim Chief Financial Officer Usha Ramachandran outlined some of these consequences, including: the reduction of operational support resulting in shorter lab and library hours, the delay of new or elimination of existing academic programs and reduced course offerings, the delay of maintenance, the reduction of library acquisitions, position reductions and layoffs, and changes to employee health benefit programs.

Ramachandran noted that with the 6 percent reduction plan approved by the regents, all of these consequences will occur throughout the System’s 35 institutions in the coming months. At the proposed 8 and 10 percent reduction levels, additional consequences could include increased deferred maintenance, further changes to health benefit plans, additional layoffs, and the imposition of temporary mandatory student fees.

“We will be good stewards of the resources and our campus presidents are providing great leadership in managing under tight economic times,” Ramachandran said. “But reductions on this magnitude do have serious consequences related to our ability to serve students.”

Included in the $251 million request is $211.4 million for 14 construction projects as well as the purchase of property for one campus. These include:

  • College of Coastal Georgia – health sciences building. $13.3 million
  • Darton College – property acquisition, $1.6 million
  • East Georgia College – Statesboro facility, $4.9 million
  • Fort Valley State University – renovations, $13.4 million
  • Georgia College & State University – Ennis Hall renovation, $10.6 million
  • Georgia Gwinnett College – infrastructure, $2 million
  • Georgia Highlands College – upgrade space needs for Cobb County access, $6.2 million
  • Georgia Institute of Technology – G. Wayne Clough Undergraduate Commons, $43 million
  • Gainesville State College – academic facility, $31.2 million
  • Kennesaw State University – laboratory addition to science building, $19 million
  • Middle Georgia College – Georgia Hall renovation, $500,000
  • Macon State College – teacher education building, $20.1 million
  • North Georgia College & State University – renovations and building additions, $16.4 million
  • Savannah State University – Marine Biology and Environmental Sciences, $2.6 million
  • University of Georgia – Special Collections Library, $26.6 million

Also recommended is $25.8 million in design money for 10 projects:

  • Armstrong Atlantic State University – library addition, $1.1 million
  • Albany State University – Ray Charles Fine Arts Center, $1.8 million
  • Clayton State University – science building, $2.1 million
  • Georgia Perimeter College – academic building (Dunwoody campus), $2.2 million
  • Georgia Southern University – biology building, $2.6 million
  • Georgia State University – humanities building, $4.7 million
  • Georgia Southwestern State University – health and human sciences building, $1.1 million
  • Medical College of Georgia – medical commons, $6 million
  • University of West Georgia – nursing building, $1.4 million
  • Valdosta State University – health science building, $2.8 million

Equipment funds for four projects totaling $13.8 million were proposed. These are:

  • Gordon College – nursing/health building, $1.6 million
  • Georgia State University/Georgia Perimeter College – academic facility at the Alpharetta Center, $1million
  • Southern Polytechnic State University – Engineering Technology Center, $4.8 million.
  • University of Georgia – gas fired boiler addition, $6.4 million

Today’s actions on the FY10 Budget and Capital requests now go to the Governor’s Office of Planning and Budget for incorporation into the overall state budget recommendations the governor will present to the General Assembly in January 2009. Any action regarding additional reductions at the 8 and 10 percent levels will depend upon the final decisions by the governor and General Assembly, which would then require final Board approval.

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