Regents Approve $2 Billion Operating and $285 Million Facilities Budget Request For Fiscal Year 2008
Chancellor Focuses on Maximizing Non-State Revenues and Funding Strategic Priorities
Atlanta — August 8, 2006
University System of Georgia Chancellor Erroll B. Davis Jr. positioned the System’s Fiscal Year 2008 Operating and Capital Budget Request today by conveying to the 18-member Board of Regents that it reflects his plan to align the System’s resources with the board’s identified strategic priorities.
The regents then approved a Fiscal Year 2008 Operating Budget Request totaling $2 billion in state appropriations, along with a Capital Request totaling $285 million in cash and bonds. The budget request reflects an increase of 5.7 percent, or $111 million, over the current fiscal year’s $1.93 billion state appropriation.
The regents’ action followed the presentation of the Fiscal Year 2008 budget request to the board’s Committee on Finance and Business Operations, which met as a Committee of the Whole. Joining Davis in the presentation were Vice Chancellor for Business and Fiscal Affairs William Bowes and Vice Chancellor for Facilities Linda Daniels.
“While these requested state funds will be critically important in helping us meet our operating costs, we will intensify our efforts to generate revenue from other sources to maximize state support and tuition,” Davis said. “We intend to be more strategic and more enterprising in allocating and securing funding.” Davis noted that while he is still conducting an assessment of the University System’s resources and beginning the process of updating the University System’s overall strategic direction, some key priorities already have been identified. These include a focus on improving retention, progression and graduation rates and meeting workforce shortages in the healthcare professions.
In addition, Davis has focused attention on identifying areas in which the System can be more efficient, increasing the level of private support for the System’s institutions and initiatives, increasing the flow of federal research dollars, and implementing Gov. Sonny Perdue’s Customer Service initiative, which Davis plans to use as a tool to create a culture of “continuous process improvement” throughout the System.
Earlier this year, the regents approved a guaranteed tuition plan, which goes into effect this fall. The plan freezes tuition rates for four years at the System’s four-year institutions and for three years at the state and two-year colleges. The move is part of an overall strategy to maintain Georgia’s historic low-tuition status.
Tuition rates are connected to the level of state funding, with the state appropriating 75 percent of the System’s instructional budget while tuition makes up the remaining 25 percent. Along with the new guaranteed tuition plan, the regents’ Fiscal Year 2008 budget request also reflects a more conservative approach, with new funds requested only for dollars generated by the University System’s funding formula.
The formula is a mathematical calculation based upon the number of credit hours students take, and costs for such expenditures as utilities and employee benefits. New formula funds totaling $80.1 million were generated in the following amounts for the specified areas of the System’s operation:
- $38.9 million for an increase in credit-hour enrollment of 1.6 percent from fall 2004 to fall 2005;
- $5.6 million for an increase in maintenance and operating funds for the System’s 35 campuses;
- $4.3 million for an increase in University System of Georgia retiree fringe benefits;
- $14.5 million for an increase in utilities; and
- $16.8 million to cover increased health-insurance premiums.
- The $285 million capital component of the budget request includes:
- $70 million for major repair and renovation needs for the System’s extensive network of facilities;
- $6 million to purchase equipment for three new facilities constructed on the campuses of Georgia College & State University, North Georgia College & State University, and the University of West Georgia;
- $164.7 million for new facilities at:
- Savannah State University ($12.7 million academic classroom);
- Macon State College ($22.2 million professional sciences center);
- Fort Valley State University ($16.8 million academic classroom);
- University of Georgia ($37.2 million College of Pharmacy);
- Medical College of Georgia ($5 million for School of Dentistry (design only));
- Kennesaw State University ($42.5 million health sciences building);
- Georgia Gwinnett College ($28.3 million library); and
- $44.3 million for 13 “minors” projects (facilities costing $5 million and less).
Included in the Board of Regents Fiscal Year 2008 budget request is $38.7 million for the Georgia Public Library Service (GPLS), which comes under the administrative responsibility of the board. This reflects an increase of 1.9 percent, or $738,144, over GPLS’ current fiscal year budget of $37.9 million.
The board also approved a $10.87 million request for new construction, renovations or additions at eight public libraries, which is in addition to the University System’s $285 million capital request.
The budget request now moves to Gov. Sonny Perdue, who will consider it as he prepares his final Fiscal Year 2008 budget recommendation to the Georgia General Assembly for the January 2007 legislative session.