The University of Toledo is responding to a nearly $8 million deferment of state funding for the current fiscal year with an across-the-board 1.5 percent general fund budget adjustment.
Ohio Gov. Ted Strickland recently announced that the state is deferring a one-month payment of state share of instruction dollars to higher education. Pushing back the $127.5 million payment for June, the last month of the state’s current fiscal year, will help Ohio balance its fiscal year 2011 budget.
In doing so, the state is temporarily reducing that planned revenue for Ohio’s colleges and universities. The deferment has a $7.9 million effect on UT’s current budget, said Dr. Scott Scarborough, senior vice president for finance and administration, and interim vice president and director of UT Medical Center.
The state of Ohio has called the move a delay in payment, but given the projected $8 billion hole in the next budget cycle, some college and university leaders are skeptical the money will materialize later and be reinstated to higher education.
Federal economic stimulus dollars already contribute to more than $18 million of the University budget, which likely will not be available for the fiscal year 2012 budget.
“There is no scenario that makes next year look better than this year,” President Lloyd Jacobs said at last week’s UT Board of Trustees Finance Committee meeting. “Every scenario is bad.”
Should the state share of instruction dollars be paid back to UT, trustees directed it to be used to advance strategic initiatives of the University.
UT has been planning for a difficult 2012 and will continue to do so, Scarborough said, adding that the University ended the last fiscal year better than expected.
The University had budgeted a 0 percent operating margin for the academic enterprise for fiscal year 2010 and actually ended the year with a positive 2.5 percent operating margin because of expanded Pell Grants and a moderate winter, Scarborough said.
The clinical enterprise of the University was budgeted at 3 percent and ended the year with 3.9 percent because of growth in outpatient services, he said.
During the trustees’ committee meeting, the group also addressed the facility needs of UT Medical Center and began a discussion about how much investment can and should be made to upgrade the hospital.