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Impending Budget Reduction

To: The University Community
From: Stephen T. Hulbert, President

Last week was one of considerable uncertainty in the matter of financial challenges facing Louisiana and, more specifically, the budget reduction being considered for all aspects of state government. By Wednesday, Nicholls State University had received notification of a 3% budget cut amounting to $749,427. Less then 24 hours later the percentage reduction had grown to a total of 5% and a loss of state appropriation amounting to $1,305,580.

Finally, on Friday University staff received a copy of correspondence from the Division of Administration outlining the 5% reduction and suggesting that a second 5% might be necessary. This correspondence instructed agencies of state government to submit a plan for 5% reduction accompanied by a second financial planning scenario detailing how the agencies would implement the full 10% cut. These financial plans were to be submitted almost immediately and contain information regarding the actual expenditures to be reduced to meet the new allocation total.

Based on enrollment issues this fall and previous warnings of the necessity for a budget reduction the University reduced spending some months ago. Yesterday a very preliminary scenario was submitted but with the statement that a 5% reduction of $1,305,580 is an unrealistic amount to cut. Given the circumstances of the past couple of months, especially the impact of selective admissions, the costs of hurricane damage, four shelters on the University campus, and the services to 645 displaced Louisiana students plus – having 7 out of 10 of the University’s primary service parishes being impacted by hurricanes Katrina and Rita, student recruitment efforts for January and Fall 2006 has been significantly impaired. In combination, a 5% budget reduction could produce a very real interruption of the academic program and services to students. The preliminary 5% budget cut is based primarily on reductions in vacant staff and faculty positions, a curtailment of overtime, and reductions in travel and supply budgets. As there has been little opportunity to discuss this matter within the University community, and the administration is committed to that effort leading to shared governance, these areas of reduction are of a temporary nature and subject to change as other savings opportunities present themselves.

Nicholls State University has not submitted a planning scenario for an additional 5% cut. The first 5% reduction would be accomplished with significant stress to the University. The second 5% reduction would create financial hardship and a damaging impact to the academic programs of major consequences. It is especially burdensome in light of the extensive dollar amount, yet to be reimbursed by FEMA and the tuition revenues owed in behalf of the hundreds of visiting students.

There is no question that the State of Louisiana is facing significant financial challenges as a result of the loss of $971,000,000 in revenue, and unfortunately Higher Education and the state’s healthcare system are the only two areas of state government that are not constitutionally protected. These agencies, therefore, face the threat of significant budget reductions. It is just as clear, however, that public higher education is needed now more than ever in building or rebuilding a prepared work force and in creating impetus for needed economic development.

Nicholls will do its part in the statewide effort but, at the same time, there must be a partnership that recognizes the role of the state’s public colleges and universities toward this effort. In the meantime, the University will do all that it can to maintain a balanced operating budget and focus its attention on serving its student body and the broader region.

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