Contact: Monty Jones, (512) 499-4363

Date: February 6, 2003

UT System News Release

7% Budget Cuts Are Outlined

AUSTIN - Budget cuts of $104.1 million across the University of Texas System will be implemented as part of the state's need to reduce spending from state appropriations for the current fiscal year by 7 percent, system officials said Thursday (Feb. 6).

Efforts have been made to minimize the impact on basic services of teaching, research, and patient care, but all of those areas will feel some effects of the budget cuts, system officials said at a news conference in Austin.

"We cannot make cuts of this magnitude without some impact on basic services, although we will do everything possible to hold those effects to a minimum," said Teresa Sullivan, executive vice chancellor for academic affairs.

"Institutions in the U.T. System have already been operating with high efficiency and with very careful stewardship of all available resources, so there is no easy or harmless way to take 7 percent out of the budget. Nevertheless, we realize that we must contribute to the solution of the state's current budget crisis."

Thursday was the deadline for all agencies and universities to submit plans for budget cuts to the state under instructions issued Jan. 23 by Gov. Rick Perry, Lt. Gov. David Dewhurst, and House Speaker Tom Craddick.

The 7 percent cuts are planned as a way to eliminate a projected shortfall of $1.8 billion in state revenue for the current year. The shortfall for the current year is included in the state comptroller's projection of a shortfall totaling $9.9 billion through the end of the next two-year budget period.

Most of the U.T. System cuts are in capital expenditures such as new construction and building repairs, administrative functions, and physical plant operations and maintenance. Construction of classroom, laboratory and dormitory buildings will be delayed; some buildings may be closed in the summer.

As a first step in the process of making the overall 7 percent reductions, the system instructed its 15 campuses on Jan. 28 to institute a hiring freeze.

Other immediate measures that institutions will use to achieve the targeted reductions include:

Many other effects would be felt on basic services if the cuts in this year's budgets are continued in future years, officials said.

Of the budget cuts announced Thursday, $32.2 million will be at the U.T. System's nine general academic universities, and $39.5 million will be at the six health science institutions. The largest institutional cuts will be at U.T. Austin ($12.7 million) and the U.T. Medical Branch at Galveston ($12.1 million).

The total cuts of $104.1 million will include $32.4 million in system-wide savings generated by the centrally administered Group Insurance Program and the Tuition Revenue Bond Building Program. These savings are a result of employee numbers that are lower than anticipated; the hiring freeze; interest rates that are lower than had been projected; and changes in the timing of construction projects.

• Report to the State on the U.T. System Fiscal Year 2003 Spending Reduction Plan (includes three attachments) - Feb. 6
• News release on the system-wide flexible hiring freeze - Jan. 28
• Statement by Chancellor Mark G. Yudof on state budget cuts - Jan. 24
• Statement by Chancellor Mark G. Yudof on Gov. Perry's zero-based budget initiative - Jan. 17