U. tackles $2 million deficit

Officials say projected loss is no cause for alarm University administrators are attempting to close a projected $2 million deficit in the budget for the current fiscal year. Executive Vice President John Fry reported on the budget projections at last Friday's meeting of the Board of Trustees. According to the University's top financial officers, the projected shortfall is no cause for concern. Vice President for Finance Stephen Golding said the budget deficit is the result of a change in the Pennsylvania state legislature's appropriations to the University. The state allocated $35 million to the University for the fiscal year ending June 30, 1996. But out of the state appropriations, $20.7 million went to the School of Veterinary Medicine. Only $9.5 million was allocated toward the general instruction budget at the University. Golding said this year's budget was drafted with the expectation that $2 million of the $20.7 million that went to the Vet School would go towards general instruction -- and that the $2 million shift accounts for the budget problems. Vice President for Government, Community and Public Relations Carol Scheman said the University asked the legislature to increase the Vet School's allocation. "[The shift in funds] was not unexpected, and it was not unintended," she said. "Our first priority was funding for the Vet School." Scheman said the University had asked the legislature for $49.8 million this year. In the past, the University has only requested $35 million. Scheman said the additional funding was intended to go to the Vet School, while the general instruction budget was to remain constant. But the legislature refused to allocate more than $35 million to the University, and instead shifted funds within the total University appropriation to the Vet School. Scheman said the University hopes eventually to receive enough state funding for the Vet School to lower tuition for in-state students, because it is the only veterinary school in Pennsylvania. She added that the University must deal with the probability that state funding will continue to be limited. "I don't believe there's going to be significant increases in public funding, and institutions are going to have to make strategic choices of where limited funds are going to go," she said. University President Judith Rodin said the increasing size of the University's operating budget also contributed to some long-range financial problems. Rodin said the budget -- and the risk of a deficit -- is growing each year, and the University must seek to restrain its costs in order to prevent future shortfalls. She added that the current administrative restructuring project should alleviate some of the pressure on the budget. "Every year of restructuring will have an incremental effect on reducing the budget," she said. "All the dollars we take out will start to generate more revenue and lower the budget base each year. But we've got to start now to realize the magnitude of savings that we're planning to achieve." For the time being, Golding said the University will be able to find an additional $2 million so that at the end of the fiscal year in June 1996, the University will break even. Some of the options under consideration include reallocating dollars within the general instruction budget, reducing expenses for the year or generating additional revenues, Golding said. "We will end up balanced," he added.

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