Portland State University needs to tighten spending and increase revenue to avoid a projected $23 million shortfall by 2015, budget leaders told faculty and staff Feb. 29.
Monica Rimai, vice president for Finance and Administration, and Kevin Reynolds, vice provost for Academic Fiscal Strategies and Planning, presented a stark budget outlook at two budget forums in Smith Memorial Student Union.
Although the University is expected to end this fiscal year with a general fund balance of $53 million, increasing salary, benefits and retirement costs are projected to push the fund deep into the red in three years.
"We need time to figure out permanent solutions to our budget," Rimai said. "The fund balance gives us that time to figure out permanent solutions."
To balance the budget, Rimai and Reynolds have asked each department to:
- hold any reserves for increased payroll costs,
- identify up to 4 percent in spending reductions in 2012-13, and
- increase student credit hours and other revenue.
In addition, the University is planning to offer retirement incentives, strategically manage enrollment, move to a performance based budgeting process and increase efficiency and effectiveness throughout campus to reduce expenses.
"We're drilling down our overhead costs to really try to think about our future," Reynolds said. "It's about who we are and how we can better serve our students."
The University is required to keep 5 to 15 percent of its operating budget on hand to deal with unexpected costs and opportunities to advance its educational mission, Rimai said. But it is one-time money that is not permanent income, and some of it is already designated for expected expenses such as new employees and contracts.
The fund balance grew to nearly 20 percent of the budget this year because of University budget cuts, employee furloughs and an infusion of one-time state cash that came with a larger long-term cut, Rimai said.
PSU is preparing for further reductions in state funding and for personnel costs to rise by 4.5 percent in 2012-13. A campus tuition review committee is working on a recommendation for next year's tuition rates.
Documents from the budget forum are available at www.pdx.edu/budget/2012-13-academic-budget-process. Feedback and questions may be sent to firstname.lastname@example.org.