Ohio State trustees approve new budget for FY 2004

COLUMBUS – Very small increases in state support this year have The Ohio State University turning to new revenue sources to maintain and improve its current levels of excellence. To that end, Ohio State’s Board of Trustees on Friday (9/5) approved a budget for the new fiscal year that focuses its limited resources in areas that help move the university closer to the goals of its Academic Plan.

Interim Provost and Executive Vice President Barbara R. Snyder said that goals for the year are to target investment in four critical initiatives -- to build a world-class faculty, develop academic programs that define Ohio State as the nation’s leading public land-grant university, enhance the quality of the teaching and learning environment, and to enhance and better serve the student body.

The university is facing a tough budget environment this year, William J. Shkurti, senior vice president for business and finance, told trustees. The state’s share of instruction, along with state performance funding for the Columbus campus, are below the level of three years ago by 5.6 percent. To counterbalance state funding losses, student fees have increased so that now, for the third year in a row, revenue from student fees exceeds state support.

“That gap is widening,” Shkurti said. “Ohio has gone from a position 16 years ago, when Ohio State’s share of instructional support was nearly double its student fee income, to a position today where the state provides a minority share of the instructional funding for Ohio State. And the forecast for the foreseeable future is that state support will continue to fall further behind student fee income, which puts a greater financial burden on students and the university.”

Shkurti pointed out to trustees that even with recent increases, “Ohio State’s undergraduate tuition remains well below Ohio’s other selective admission public universities. Tuition for an undergraduate from Ohio is seventh among the state’s 13 public universities, trailing Miami, Cincinnati, Bowling Green, Ohio University, Kent State and Akron.”

For the current fiscal year, state support for the Columbus campus is nearly flat at $319 million. At the same time, student fee income is projected to increase 12.2 percent to $464 million. In comparison, state support for the Columbus campus as recently as three years ago was $338 million and student fees brought in $329 million. Other strong revenue streams for the university this year include research overhead -- which is projected to increase 6.7 percent -- and health system revenues -- projected to rise this year by 7.6 percent.

“The university continues to be less dependent on state funds,” Shkurti said. “But despite an uncertain financial environment, our financial goals for the fiscal year will still be met.”

Overall, the budget provides for revenues of $2.72 billion and accounts for expenditures of $2.71 billion. Marginal increases in revenues are budgeted according to the priorities of the academic plan. Among the targets for higher spending are student financial aid and competitive faculty and staff salaries.

“A significant portion of the growth in revenues for the fiscal year is allocated to student financial aid in order to ensure that students who are otherwise qualified will not be denied admission to the university for financial reasons,” Shkurti said. In terms of salaries, average pay increases for faculty range between 2.5 percent and 4.4 percent, while staff pay increases average 3.5 percent university-wide.

“By reallocating existing resources, compensation increases were on average 1 percent above market for the year, but increases are still below market for the last three years, as are average salaries for faculty and staff,” Shkurti said. “Also, over the last two years, approximately 600 jobs have been eliminated throughout the university as part of our continuing effort to examine everything we do to determine what we need to do better and what we no longer need to do at all.”