President Staples announced during a budget status presentation April 15 that, despite budget uncertainties, the university will begin phase one of the budget process - planning toward the proposed reduction for fiscal year 2004 based on current figures. A $4.7 million shortfall is the focus of budget committee planning meetings now underway until mid May.

"It would be a disservice to our students and the university community to simply wait until the end of the Legislature before starting our plans," Staples said. "Being proactive by planning and preparing for budget reductions now, rather than reactive and rushing through the planning process later, helps ensure the best possible outcome for the UH-Clear Lake students, faculty and staff."

During the presentation, Staples introduced two budget reduction scenarios and overall planning guidelines for what could be a number of situations given unknown stipulations on state financial support. Scenario one is based on current known figures with tuition-designated fees set at the highest allowable amount of $46 per credit hour. Scenario two is based on tuition designated fees being deregulated, and the tuition-designated fee set at $49 per credit hour.

Although implementing a reduction-in-force is included among budget reduction planning options, Staples predicts that the current shortfall, and anything less, will not call for any layoffs or across-the-board salary or wage reductions.

The difference of the general revenue reduction between the two presented scenarios is about $1 million.

Scenario two would project a $3.7 million shortfall versus the $4.7 million projected in scenario one.

The university's shortfall increase or decrease relies heavily on the state's forecasted revenue estimates.

"The State Comptroller has not yet released final revenue estimates for the upcoming months," said Sheila Clancy, spokesperson for State Comptroller's Office. "We have, however, seen declining sales tax revenue over the past two years, which defines more than half of the state budget."

The main three areas administration is focusing on involves tuition and fees, university, school and department reserves, and departmental budget cuts. The administration's budget crisis planning is being met with some opposition, however.

"The budget crisis is being poorly handled by the administration," said Doug Rusth, associate professor of accountin and chair of the Facilities and Resources Committee. "The only cuts they have made to date have been in the area of faculty salaries for summer pay and the number of course offerings - an adverse effect on the two most important stakeholders at the university."

"Opposing views are expected within a culture of shared governance and open lines of communication," Staples said. "These are difficult times, and everyone in the university is being impacted by the budget cuts."

The 78th Texas Legislature's regular session ends June 2 provided Gov. Rick Perry does not call additional special sessions. Once final budget information is given to the university from the Texas Legislature, the university will enter phase two of the budget process and will continue until June 16.

Phase two of the budgetary planning process involves making necessary adjustments to the budget to meet the shortfall whether it is better or worse than what was initially planned for.

Staples outlined a list of priorities that will be considered during each phase of the budget process. Minimizing the impact on students remains at the top of this list.

Reserves are a safety net for other possible crises such as natural disasters. After Tropical Storm Allison, the premium for insurance went up 300 percent. The university's deductible is now at $1 million, Staples said. Therefore, reserves should be used cautiously to upkeep other commitments as well as provide security over the next biennium.

"We can't meet the $4.7 million on the back of student tuition and fees, and we can't meet the $4.7 on the back of reserves either," Staples said.

UH-Clear Lake administrators continue to submit regular updates to faculty and staff of the university to keep communication lines open. The outcome of the administration's budget planning will unfold tentatively within the next couple months after the close of the legislative session.

"The list of budget planning priorities that President Staples released was the work of his administration," Rusth said. "The faculty and shared governance had zero input into this list. The budget decisions being made are at the sole discretion of the administration. The faculty has attempted to have input into the process but has been rebuffed."

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