Parade of nations           International Week, observed in early May at Ohio State, featured a May 4 procession across the Oval in celebration of the Peace Corps' 40th anniversary. Right, Jef Naayers of Wah Lum Kung Fu and Tai Chi of USA plays the drum for the Chinese Lion Dance performed May 1 in front of the Main Library as part of the week's events.         By Jo McCulty
	Left, Gov. Bob Taft, a Peace Corps volunteer in Tanzania in the 1960s, helps lead the parade.

Officials seek to preserve academic core in light of bleak budget

The combination of a bleak state budget, skyrocketing fuel bills, a substantial hike in health care costs and a firm commitment to increasing student financial aid leaves Ohio State with few available resources to provide anything more than minimal faculty and staff salary increases next fiscal year.

Officials told the Board of Trustees on May 4 that the University does remain hopeful, however, that it will be possible to provide base salary support that will at least cover planned increases in health care premiums and parking fees. Such annual increases add up to a maximum of $377 for classified employees and $395 for unclassified staff and faculty, based on those who enroll in the PrimeCare health plan with family coverage.

Key to all budgeting decisions during this time of uncertainty and disappointment is preservation of the University's academic core, said Edward J. Ray, executive vice president and provost.

"We are acutely aware of our need to increase salaries if we are to continue to compete with our peer and benchmark institutions in attracting and retaining top-quality faculty and staff," Ray said. "We are doing our best to make responsible financial decisions in the best interests of the entire institution, not the least of which is protecting the quality and integrity of our academic programs and the student experience. We also hope to do what we can for employees with satisfactory performance by providing at least enough of an increase to offset their share of health and parking fee increases.

"We are disappointed we are not going to be able to provide faculty and staff with competitive salary increases in the coming year. But we remain intent on finding a way to provide salary increases in the future that will make Ohio State more competitive in the national market."

Final compensation guidelines will be presented to trustees in June.

As of early May, Ohio State administrators were predicting the University will receive a 2.1 percent increase in state funding for Fiscal Year 2002, which begins July 1. The budget for the next biennium remains uncertain, however, until the state Legislature approves spending for the next two years and Gov. Bob Taft signs a budget bill.

The projected state increase, combined with the anticipated 9 percent tuition increase (the lifting of a 6 percent tuition cap was approved by the Ohio House), would result in an overall 4 percent budget increase next year. However, because of built-in financial commitments for health benefits, utilities and other ongoing costs of operating, very little -- if any -- of the increase will be available for compensation increases and program improvements by the time a budget is approved.

The University has informed employees that their medical premiums -- which cover approximately 15 percent of the institution's total health care costs -- would increase an average of 30 percent next year. At the same time, the University will continue to absorb 85 percent of those costs, which amounts to approximately $6.6 million in general funds for next fiscal year -- an amount equal to the cost of a 1.5 percent pay raise for all employees, said William J. Shkurti, senior vice president for business and finance.

The University also must adjust its allocation to fuel costs because of being hit unexpectedly hard by heating bills, which were 89 percent higher than anticipated in the first three quarters of this fiscal year -- even after the Department of Physical Facilities heated campus with alternative fuels to try to reduce the burden of those costs.

And finally, the University will boost student financial aid in a pledge to temper the effects of the expected tuition increase for Ohio undergraduates next year. All revenues generated by an Ohio State tuition increase above 6 percent, if authorized by the state Legislature, will be targeted toward a number of enhancements to undergraduate education -- including a reorganization of academic advising, technology improvements, reduction in closed courses and better-equipped classrooms.

3rd quarter budget report

Higher education received a budget cut by executive order late this fiscal year, resulting in a $3.2 million (1 percent) reduction in Columbus campus State Share of Instruction and a $4.5 million reduction in all appropriations for all campuses. To soften the impact of the cuts, University officials proposed using Ohio State's Rainy Day Fund to make up for most of the late-year losses.

Trustees on May 4 authorized the University to use $5 million -- or 50 percent -- of the Rainy Day Fund this fiscal year to offset the $3.2 million reduction in the Columbus campus revenues and a $1.8 million portion of the utility cost increase. The board stipulated that the Rainy Day Fund be replenished from cash balances during FY 2002.

Trustees also approved adjustments to the FY 2001 current funds budget to reflect changes outlined in a third quarter budget report presented by Shkurti. Adjustments to budgeted revenues and expenditures reflect the unexpected spike in utility costs, as well as the final enrollment figures for all four FY 2001 quarters -- which have minimal financial impact this year, Shkurti said.

"With the adjustments proposed today, this year's general funds budget will be in balance," he said. "But we also know we must prepare for Fiscal Year 2002, which is expected to be a very challenging year financially."

He also said officials are continuing to monitor auxiliary budgets in Athletics, the Jerome Schottenstein Center and the University Medical Center.

Shkurti said that use of the Rainy Day Fund allowed the University to eliminate any cuts to appropriations in support of the instructional mission at the Columbus campus. However, several line-item appropriations were reduced by 1 percent this year in response to the state's cut.

Advocates continue push for better state support

President Brit Kirwan told University trustees and governance members in early May that though the state budget picture continues to look grim, thanks should go to Ohio State advocates and other education proponents for their hard work in pressing for better legislative support for higher education.

He credited that work for what little increases in higher education that officials expect to materialize in a final state budget. Kirwan noted that the House budget approved May 3 includes only modest increases in the State Share of Instruction and Access Challenge, with levels maintained for funding initiatives rewarding institutions for increasing student success and earning external research funding (Success Challenge and Research Challenge, respectively). The House budget also raises the cap on tuition for Ohio State from 6 percent to 9 percent for Fiscal Year 2002, and removes it entirely for all institutions in FY 2003. University leaders remain hopeful that higher education's position will improve somewhat in the Senate's version of the budget.

But Kirwan reiterated his frustration with Ohio lawmakers' approach to funding education by pouring billions of dollars into K-12 education "while ignoring higher education." Stressing that he recognizes the Legislature is operating under a court order to increase funding to K-12 education, Kirwan added that "the state is not making the kind of investment in higher education that the future of Ohio requires."

"The budget is a great disappointment, especially given the enormous efforts dedicated to producing a different outcome," he said.

Kirwan combined his budget remarks to the Board of Trustees and the University Senate with a report on the many accomplishments of which Ohio State should be proud, among them: five recently announced prestigious faculty awards, a national top-20 ranking for the Fisher College of Business, and the College of Education's third-highest passing score on a national test for future teachers.

"In spite of some problems, we still have a great deal to be thankful for. We are continuing to advance this marvelous university," Kirwan told trustees. And from the University Senate, Kirwan drew applause when he asserted, "Quite frankly, Ohio State has achieved a level of quality that the state doesn't deserve, given its dismal support of higher education."