2018 Budget Message from President Stanley
To Faculty and Staff,
After consultation with senior University leadership and SUNY, and noting that our current deficit reduction plan has not produced the needed savings through attrition, I am announcing that the University will place an indefinite hold on hiring, effective immediately. Exemptions from this action include positions that are self-supporting, separate and distinct from the State budget, which use revenue designated to a fund’s specific purpose.
This action will impact positions supported by the following funds:
- State Purpose
- General IFR
- RF Indirect Cost Recovery (IDC)
Expenditure restrictions against non-salary budgets will also be in effect for the same funding sources.
It is imperative to underscore the seriousness of the budget challenges the University is facing today due to the lack of state funding for contractual salary increases. This is intensified by the fact that the allowed tuition increases over the four-year period starting 2017-18 do not cover anticipated mandatory contractual salary increases and that our state allocation has not increased. These are very real costs that when absorbed along with the usual increases for goods and services and the planned and unexpected expenses of an aging infrastructure, contribute to an urgent need for action.
We have been down this path before in 2009 and, while difficult, we came out stronger. We managed the deficit and experienced measurable growth in student and research success, enhancing our reputation over the past few years. I am responsible for putting our fiscal affairs in order while preserving our academic and research excellence and protecting the student experience. This will be a difficult time for us but, together with my management team and with your help, I am confident that Stony Brook will once again emerge stronger and prepared to meet our mission and obligations as New York’s flagship research university.
Contractual salary increases, negotiated at the state level, have not been reimbursed since FY15, leading to a total base funding shortfall of $18M. Assuming this will continue, future and retroactive contractual increases will compound the shortfall. Stony Brook covered the FY15 through FY17 contractual salary increases with $18.15M of reserves. There is no way to replenish this one-time money under the current fiscal conditions.
During the SUNY 2020 timeframe, the $300 annual predictable tuition increase brought in $4M per year to support campus operations and promised enhancement of our student experience and research operation. This, coupled with the long-standing payment for any negotiated salary increase, adequately funded our operating expenses. That tuition plan ended in 2016 and the salary payment ended in 2015, and for a year, there was no tuition increase.
The New York State budget passed in 2017 allows for a four-year span of annual tuition increases of $200, which bring in $2.3M per year. As noted above, this tuition revenue increase does not cover the contractual salary increase expense. In addition, we will forego $3.7M in Excelsior tuition for the next four years since tuition remains flat for the Excelsior scholarship program until the 2021-2022 academic year. Additionally, we spent about $7M this year to cover the difference between the maximum Tuition Assistance Program (TAP) award (set at 2010-2011 tuition levels) and the current tuition level. This TAP gap payment will increase annually. As a final note on the numbers, the proposed State budget cuts $34M from Stony Brook Hospital’s operating budget, which will have a significant impact on the care we provide. These numbers are stark and indicate that we are in an untenable position and must take concerted action to address the problem.
It is important that as a community we recognize these constraints and the role we all play in the difficult decisions being made as we work together to right size the budget based on the current realities. We are not alone; higher education campuses across the country and in the SUNY System are in a similar position, for many of the same reasons, and are addressing the problem with similar strategies.
Hiring constraints and expenditure restrictions will remain in place at least until we achieve our savings targets and eliminate our structural deficit. We will strive to meet budgetary constraints while maintaining a focus on the student experience and the academic and research enterprise. In addition to lowering expenditures, we will continue to look for opportunities to grow revenue, will advocate in Albany for additional funding and will continue our focus on philanthropic support for programs to maintain our margin of excellence during this period.
We must work together, sharing ideas and feedback in order to reduce and eliminate our financial deficit. Together we will move forward, as we have in past downturns, and will continue to build upon the strength of our institution.
Samuel L. Stanley Jr., M.D.