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USG Budget Focuses On Core Mission and Key Initiatives

Atlanta — September 9, 2003

Facing a third straight year of record high student enrollment and declining state revenues, the University System of Georgia Board of Regents approved today its budget request for submission to the state’s Office of Planning and Budget. The $1.8 billion Fiscal Year 2005 Budget Request focuses on securing funding to meet these enrollment increases, address maintenance needs, cover rising health care costs and continue a number of special initiatives.

Vice Chancellor for Fiscal Affairs William R. Bowes presented the FY ‘05 budget request to the regents, emphasizing a call for additional formula funding to accommodate record student enrollment in the University System’s 34 public colleges and universities and the need for enhancements in special funding to address specific challenges facing the state and higher education.

In addition to new funding, the request also factors in Gov. Sonnny Perdue’s call for a new 2.5 percent reduction ($41.7 million) in the current FY ‘04 budget and five percent ($80.4 million) in the FY ‘05 budget.

Also approved were a $339 million request for building projects in FY ‘05 and a $77 million request for the FY ‘04 Amended Budget.

“The budget we put forward today follows the guidelines from the Governor’s Office of Planning and Budget. When funded by our funding partners, this budget will enable us to make targeted advances,” said University System Chancellor Thomas C. Meredith remarks to the Board. “Students are flocking to our institutions in larger numbers than ever before. When fall numbers are in, we expect to see close to 250,000 students. The gap between the increase in the number of students and the decrease in funding is getting wider. We must do whatever is necessary to keep from destroying our hard earned and much envied quality.”

Key to the Regents’ request is $245.3 million generated by the “funding formula.” This formula calculates the impact of such factors as the increase in the number of credit hours students take ($108.1 million in new funds), the increase in the square footage of buildings owned by the regents ($8.2 million), funds for basic building maintenance and repair ($63.8 million), the rise in continuing education credits taken ($23 million), and the increase in health care, life insurance and other fringe benefits costs for employees ($40.1 million).

Keeping within the governor’s guidelines to keep any budget enhancement requests to within two percent of the total budget, the Board approved a request for $27.2 million to be spread over seven initiatives.

These include:

  • $10 million to enhance the research efforts of the Medical College of Georgia;
  • $1.5 million to expand access to public higher education to African-American males;
  • $4.4 million to expand the existing Intellectual Capital Partnership Program (ICAPP) initiative that seeks to meet Georgia’s growing shortage of healthcare workers;
  • $1 million to assist in state efforts to protect and preserve its existing military installations;
  • $1 million to strengthen and expand study abroad programs for University System students;
  • $1 million to increase the number of online courses offered by the University System; and
  • $7.7 million to fund four well-established initiatives (GALILEO one statewide electronic library, Internet Connectivity, Connecting Teachers and Students and Services, and P-16) out of state appropriations instead of the Georgia Lottery.

The Regents $339 million facilities request reflects the System’s estimated needs for 20 million gross square feet of new space by 2020. Linda M. Daniels, vice chancellor for Facilities, provided details on the facilities budget request to the regents.

In comments to the board prior to Daniels’ presentation, Chancellor Meredith said, “This Board has the best system I have encountered for determining needs and prioritizing those needs. Our enrollment growth dictates more facilities to preserve access for Georgians. We can’t wait until the year 2010 to start addressing these needs, when we know the students will be here.” The request includes funding full construction of the top ten projects on the Regent’s Major Capital Priority List, design funds for one additional project on this list, and equipment for four previously funded projects, totaling $211 million.

Also included were requests for $107.7 million to construct 24 projects with an average cost of under $5 million each, $1.1 million for one “payback project,” and $19.6 million for 14 projects in the Georgia Public Library System. A payback project is a facility for which revenues earned pay back the state bonds issued for construction.

The FY ‘04 Amended Budget request includes: $8.2 million for the Eminent Scholars program, $22.5 million to cover the employer share of increases in employee health insurance premiums, $39 million to restore previous cuts in the Board of Regents’ major repair and renovation fund, $1.56 million to cover rate increases in the System’s Optional Retirement Plan, and $3.65 million for the Georgia Public Library System.

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