Download Good morning and welcome back. The purpose of this message is to

Good morning and welcome back.
The purpose of this message is to explain what we are doing to handle our unallotment in FY
2009 and to describe how we are preparing for the likelihood of further and deeper cuts in the
next biennium.
This announcement is the fifth in a series of messages that I am sharing with the WSU
community about our budget planning. If you wish to review the previous messages, go to the
WSU homepage and click on the President’s Office link. When you reach my home page, click on
Budget Planning. You can also go directly to the site by using
http://www.winona.edu/president/10590.htm. In addition, the Fiscal Affairs Web site contains a
budget toolkit with further budget information. You can visit that site by clicking on the Faculty
and Staff section of our Home Page, then on Fiscal Affairs and finally on Budget 101.
Our current situation: In response to the projected state budget deficit of $426 million
estimated at the end of November and released in early December, Governor Pawlenty has
exercised his authority to “unallot” during the fiscal year in an effort to avoid a deficit in the
state budget. Our share of the $20 million unallotment assigned to MnSCU is $921,985.
The state budget deficit projected for the next biennium is estimated at $4.8 billion. If MnSCU
receives its proportional share of the necessary reduction in state appropriation and if the
distribution of those reductions follows the pattern used to handle the unallotment we could
face a further cut of $4.1 million in our state appropriation. Approximately 29 percent of our
total budget comes from the state. The rest is almost entirely from revenue generated by our
enrollments in the form of tuition as well as revenue funds from auxiliary operations such as the
residence halls.
How we are handling the initial unallotment: We have already taken several actions to reduce
our expenditures for the remainder of FY 2009 and to build up some flexibility to help us
manage the transition into the next biennium. We are now applying two simple tests to every
major expenditure or investment. The first question is whether this is something we must do in
order to maintain our appeal to prospective students, support student success, generate
additional revenue or maintain the integrity of our core. The second question is, if this is
something we must do, is this the best way to do it?
We have continued with our strategy of selective recruitment. Approximately $3.2 million in
essential faculty and staff positions that meet our two tests are going forward. We are holding
another set of positions until our future budget situation becomes clear, at which point, we shall
decide whether to proceed with further recruitment or to freeze the positions. The value of the
positions that are already frozen is $495,000. It should be noted that in all cases these frozen
positions were vacant and represent no job losses for currently employed personnel. We
continue to view layoffs as a last resort.
We are limiting the back fill for contractually required sabbaticals. The estimated cost of these
temporary replacements is $900,000. We have reduced that cost by half and are grateful for the
willingness of our academic departments to find ways to manage during the absence of their
colleagues who are on sabbatical.
In addition, we will examine any remaining discretionary expenditures in all of our units and
attempt to hold back approximately 25 percent of our unexpended discretionary resources in
anticipation of the very real possibility of a second round of unallotment after the February
economic forecast. Vice Presidential approval will be required for any major expenditure or
investment this spring. In the case of academic units, the approval of the Dean will also be
required.
One of the most immediate areas to reduce discretionary expenditures is travel. We are asking
everyone to apply the two-part test to all discretionary travel. These considerations should be
applied to travel within and outside the state. We recommend substituting webinars, on-line
networking or teleconferencing wherever possible to reduce cost and allow for continued
interactions with colleagues elsewhere.
How we are approaching the development of the next biennial budget. We will ask the Facilities
and Finance Committee to design a process to involve the campus community in reviewing and
assessing the additional cost-saving and revenue-generating strategies. In doing so, we will
continue to employ an investment approach to our budget by viewing our budget as an
investment portfolio. We will think about how we use the resources we have for the greatest
possible good rather than simply how we can cut our budget.
To plan for the next biennium we need to know:

the size of our state appropriation,

our enrollments,

the tuition guidelines that will be set by our Board of Trustees and

the effectiveness of our current efforts to generate additional revenue and produce muchneeded cost savings.
The next critical dates are Governor Pawlenty’s State of the State address on January 15th, the
Governor’s Budget Message on January 27th and the February economic forecast, to be
released at the end of February.
As we learn more about the depth of the budget deficit and the implications of the recession for
the MnSCU budget and for Winona State University, I will hold additional open sessions and
send budget messages to the campus community.
Judith A. Ramaley
President