Budget Planning Council
• Joe McLaughlin, Faculty Senate
• David Thomas, Faculty Senate
• Susan Williams, Faculty Senate
• Elizabeth Sayrs, Dean
• Hugh Sherman, Dean
• Reneé Middleton, Dean
• Aimee Edmondson, Faculty at-large
• Cindy Anderson, Faculty at-large
• Hannah Clouser, Student Senate
• Ian Armstrong, Graduate Student Senate
• PJ Roden, Student Trustee
• Jason Pina, Vice President
• Heather Gould, Classified Senate
• Jessica Wingett, Adminstrative Senate
• Pam Benoit, Co-chair
• Deb Shaffer, Co-chair
• John Day, Ex-officio
• Chad Mitchell, Ex-officio
We wish to provide an update to the University community about our FY18 Budget Process; information for faculty and staff regarding FY18 raise pools and healthcare plan changes; and a summary of Governor Kasich's State of Ohio Budget proposal.
FY18 Budget Planning
As we proceed with FY18 budget planning, we remain committed to our priorities to focus first on our vision to provide the nation’s best transformative learning community, maintaining our academic and research quality, and investing in student success. In recognition of this, our FY18 Budget will continue to include substantial, multi-year institutional investments supporting the capital improvement plan, student financial aid, and academic programs.
Our ability to afford these investments is constrained by both limited projected growth in our resources, and significant uncertainty from the State of Ohio budget process (additional details below). Since our initial projections were developed in the Fall, we have taken a number of steps to reduce our gap between revenues and expenses, including increasing Auxiliary unit contributions supporting the Signature Financial Aid program; evaluating our class size projections and increasing tuition projections; and requiring administrative units to absorb any regulatory cost impacts within existing funding levels. After accounting for these changes, a significant gap between revenues and expenses remains.
To maintain a balanced budget will require the reallocation of resources across the institution. While we remain committed to our vision and mission, closing our current budget gap will require shared sacrifices across all areas of our institution. Over the course of the next few months, Administrative and Academic leadership will be working together to prioritize and make tough choices.
Compensation and Benefits
Given our current budget environment, we are continuing with our fall planning assumption of no raise pools for FY18, with the exception of honoring the second year of the compensation plan for Medical faculty, which lagged the faculty comp plan by two years. After multiple years of supplemental salary increases to support our compensation investments (3 years of Faculty Comp Plan; 2 years of Staff Comp Plan), we are not in a position to award salary increases this year. Additional analysis will be completed to measure progress towards our compensation goals and determine a course forward for future years. We realize the impact that no raise pool will have on our Faculty and Staff and will continue to develop opportunities to demonstrate our appreciation for the significant contributions and dedication to the success of our students and institution.
As we progress through our FY18 budget planning, it is important to highlight changes to FY18 healthcare benefits (effective July 1, 2017). FY18 represents the third year of the benefit plan changes that were developed by the Benefits Advisory Council and communicated over the past two years.
In addition to these planned benefit changes, the Benefits Advisory Council has recommended implementing advanced utilization management programs to better control prescription drug costs currently projected to increase by 11.5% annually for the next three years. These programs will introduce additional action by doctors and patients for the approval of specific, high cost drugs. Our Benefits team is developing a communication plan that will include working with Faculty and Staff Senates, open forums, and personalized communications to those impacted employees as well as our participating providers.
State of Ohio Executive Budget Proposal
As you may know, the University’s operating budget is primarily supported by two revenue sources: tuition and fees paid by students, and state appropriations that subsidize the cost of education for Ohio residents (State Share of Instruction, “SSI”). As communicated in our budget update to campus in the Fall, preliminary FY18 projections of a gap between revenues and expenses led us to recommend Athens Undergrad tuition and fee increases that were approved at our January Board of Trustees meeting. However, Governor Kasich’s FY18-19 Budget proposal again includes a tuition freeze for the biennial budget, meaning another 2 years of a 0% cap. The financial impact of a tuition freeze is only partially offset by the proposed 1% increase in SSI, which will require restrained growth in Ohio University’s FY18 expense budget.
The Governor’s Budget proposal continues to emphasize cost savings for students as identified by the Task Force on Affordability and Efficiency in Higher Education. A key provision of Governor Kasich’s budget proposal is a new FY19 textbook initiative that will require all Ohio’s public colleges and universities to shoulder a significant share in the cost of textbooks with its students. Acknowledging the fact that specific provisions of the initiative are still forthcoming, we want to communicate what we know of the current proposal as the impact on the institution will be significant. Currently, our students estimate an annual textbook and supplies cost of $1,034. The Governor’s proposal permits the University to receive $300 of this cost in a one-time fee increase, effective FY19. Institutions would be expected to absorb or find other ways to defray the remainder of the cost. Ohio University is currently preparing a multipronged strategy for reducing the cost of course materials for its students. One such strategy is the Alt-Textbook Initiative, in which a modest investment of $15,000 yielded nearly $250,000 in cost reductions to students. Additional textbook strategies will need to be undertaken to meet the requirements of the current proposal.
Other Notable Executive Budget Proposals
Finally, the Governor’s budget included other significant proposals that impact our students and community:
- The Governor’s Budget proposal includes additional provisions that increase Ohio’s support for its existing need-based financial aid program, the Ohio College Opportunity Grant (OCOG). The increased investment in OCOG includes the expansion of student eligibility to families earning up to $95,000. In addition to increased investment in existing aid, the Governor has proposed the establishment of a new scholarship program to provide incentives to former students, who started a degree program and have less than a year remaining, to return to complete their undergraduate degree program. Ohio University welcomes these investments in Ohio’s student financial aid programs.
- The Governor’s budget continues to emphasize the importance of commercialization and research at its public universities. Specific to the FY18-19 biennium, the Governor’s budget includes a provision that will require all public universities to review and/or adopt an intellectual property policy and to include a technology commercialization pathway in the faculty tenure policy. In addition, the budget proposal continues the support and development of the Ohio Innovation Exchange as a repository for the research initiatives and research equipment available across all of Ohio’s public universities.
We will continue to keep the University community informed as we progress through the planning process.
Executive Vice President and Provost
Vice President for Finance and Administration
Budget Planning Council