University Responds to State Budget Outlook for 2009

FAYETTEVILLE, Ark. — The University of Arkansas is likely to face a significant cut of approximately $4.7 million in state funding in the 2008-09 fiscal year based on state revenue figures released by the Arkansas Department of Higher Education this week.

 Such a cut would pose a potential threat to some university programs and is likely to significantly curb - if not eliminate - the university’s ability to offer wage increases to faculty and staff in the coming year.

“To put this cut in perspective, the Fayetteville campus will receive less money from the state next year than it did this year, despite the fact that normal inflationary pressures and cost increases specific to higher education have continued to rise," said Chancellor John A. White.

“Obviously, this unexpected shortfall has forced us to re-evaluate our funding plans for the coming year to ensure we are providing appropriate support and educational opportunity and quality for our students, faculty and staff under these trying economic circumstances," he added. "Some difficult decisions will have to be made."

Last month, the University of Arkansas requested a modest increase of nearly 6 percent in tuition and fees for the 2008-09 academic year, which was approved by the Board of Trustees of the University of Arkansas System (see http://dailyheadlines.uark.edu/12600.htm). That request, however, was based on funding information that did not reflect this potential appropriations cutback.

"We appreciate Governor Beebe taking a fiscally conservative approach in dealing with the economic challenges facing the state prior to the start of the fiscal year, as mid-year rescissions are certainly more difficult to address," said White. "We are quite confident that he will do everything he can to ensure that higher education remains strong. He knows the future of the state is linked inextricably with the future of the state’s higher education institutions."

Despite the adoption of a higher education funding formula in 2005, the University of Arkansas already is underfunded by nearly $40 million based on this formula, according to the Arkansas Department of Higher Education. State appropriations and tuition income represent nearly 90 percent of the university’s revenue base, making state support a vital component of the university’s operations.