It is understood that the current fiscal climate and related changes are quite stressful. To that end, and as I have previously promised, I will continue to keep you informed of changes in our budget situation. Today, I address some frequently asked questions about the budget and present some slightly revised principles that will guide our budget decisions.

Frequently Asked Questions

1. Explain the different types of funds (base budget, hard money, soft money, designated funds) and how they can be used?

The college base budget is the amount of funds that the college receives each year. These dollars are dependent on a combination of the state appropriation to the university and the tuition paid by students. The base budget, which remains relatively stable, is affected by state appropriations, enrollment and tuition, and the college's relative priority on campus. (Note that the base budget of the college only increased 23.12% from 1990 to 2001 while mandated merit and cost of living increases [COLA] went up 34.75%.) The current base budget is 2% less than last year's due to budget cuts. Most of the base budget supports positions.

Hard money is ongoing money. It is part of the college's base budget. Most such money is attached to faculty and staff positions and graduate assistant funding pools. Unless there are changes in the base budget, hard money can be expected to continue each year. Another source of hard-type funds is endowments that support scholarships and other donor funded initiatives. These funds are dependent on the market for the interest payout that supports the scholarships or other activities.

Soft money is one-time money. Once it is spent, it is gone. Soft money comes from a variety of sources, including income from summer school or outreach courses, research overhead income, non-endowed donor funds, and unused hard money during the previous year.

Designated funds are funds that are restricted to certain uses. For example, most grant and contract funds are restricted to the purposes for which they were granted. Similarly, most foundation funds are restricted to the purposes for which they were donated or awarded.

2. What is the difference between cuts to this year's budget and cuts for the coming year?

The problem with cuts to this year's budget is that we are almost halfway through the budget year. Most hiring (e.g., graduate assistant, faculty, etc.) decisions for this year were made last year. Fortunately, upon advice from the Provost's budget office, we acted quickly to limit spending and minimize the effects of cuts to this year's budget.

Cuts to the coming year's budget will be determined by the legislature this Spring. We do not yet know the extent of these cuts. However, we can anticipate that the cuts will be at least as large as the amount of this year's budget that is rescinded.

3. If you do not yet know how large the cuts will be, why did you terminate the contracts of the two Education Technology Support (ETS) workers? Why were those workers chosen rather than others?

Because the college has few anticipated retirements, it has very little budget flexibility. Even with a substantial contribution from the dean's office, it is anticipated that departments will need to make some cuts in order to absorb future budget cuts, including further cuts to this year's budget, which are possible after January.

Unfortunately, contract employees offer us a much needed source of flexibility. The two contract workers where chosen for termination, because they were the only workers in ETS not on state lines, and they had been there for the least amount of time. Terminating the contracts at this time will lessen the impact of future cuts on departments. Also, terminating at this time, gives the two workers considerable advance notice so that they can pursue other options.

We acknowledge that the services provided by the contract employees in ETS were most helpful. However, OIT will provide similar services, albeit, perhaps not as quickly. In addition, the reorganization of the remaining staff at ETS should limit the impact of the loss of the contract workers.

4. If we are in a budget crisis, how could we afford an assistant dean for development? And, why did you reclassify the public relations position to assistant dean?

Although we are in a budget crisis, the campus continues to seek funds from donors and to build alumni relations. In the long run, these strategies are vital to maintaining the momentum of the campus. For example, alumni and other donor funds have started new buildings, enabled recruitment of top faculty, supported research and outreach programs, and provided scholarships and fellowships.

We welcome the return of Darcelle Wilson to the college as Assistant Dean for Development. Darcelle's position is fully funded by the Campus Office of University Relations.

Our planned structure for external relations requires that the person in the public relations and communications position be on equal footing with the lead development professional. Deb Hudson had held campus and assistant dean level positions before coming here.

5. If we are in a budget crisis, how could we afford to hire an associate director and a director of program evaluation for the Maryland Institute for Minority Achievement and Urban Education?

The Maryland Institute for Minority Achievement and Urban Education's programs are funded primarily through federal and corporate funding. The funds that support the two new positions were congressionally designated federal funds provided solely for the purpose of supporting specific programs of the Institute.

6. Shouldn't the money currently spent on alumni events and fundraising be used to defray cutbacks in the college?

As noted earlier, the campus remains committed to strengthening relations with alumni and securing funds from donors. Funds used for these purposes are soft money that would not be of help with position cut backs.

7. What happens if a faculty member retires or leaves?

If a faculty member leaves or retires, the line and dollars will revert to the dean's office. Some of the funding will be used to defray deficits resulting from budget cuts. However, within the context of the principles noted below and considering the extent of deficits, departments may be able to compete for a remaining portion of the position through the annual college planning advisory competition (http://education.umd.edu/collegeinfo/cpac.html).

8. What happens if a staff member retires or leaves?

There is currently a campus hiring freeze for all but faculty positions. To that end, staff will not automatically be replaced. As noted with faculty, we expect to use funds from positions to defray deficits. However, in some circumstances, the department chair or unit head may seek assistance from the dean in requesting campus permission to fill a critical position.

9. Can't we scrape up some money for raises or at least bonuses?

Colleges and campuses have very little leeway in giving raises or bonuses. Cost of living increases (COLA) and merit pay are appropriated on a state basis. Colleges do not have the discretion to move money into salaries or bonuses. If the state does fund bonuses, they will probably be only for lower salaried employees.

10. How long do you expect this situation to last?

The length of the budget challenge depends in part on the economy. However, it is important to remember that state appropriations depend on the previous year's revenues. To that end, it is likely that we will have serious fiscal constraints for another two years. After that, it is likely that it will take some years to return to our current fiscal status.

11. How much has the dean's office given up in the budget crisis?

The dean's office has already given up $255,000. This amount is approximately 1/3 of the total amount collected for this year's soft money current and anticipated cut and the lower projection of next year's hard money cut. These funds were obtained by leaving one associate dean position temporarily unfilled and removing state funding from my start up package that had been used to help jump-start the Maryland Institute for Minority Achievement and Urban Education. The Institute is now fully funded by federal funds and corporate donations.

12. Other colleges are still hiring. Why isn't the College of Education?

Different colleges have different levels of flexibility. We have relatively few retirements this year, which means that we have less flexibility. In addition, we have taken a conservative approach; we do not want to hire now and layoff later.

13. Why are construction projects still proceeding?

Buildings are funded through some donor money and mostly through bonds. In this way, most of the funding is debt financed by the state. The state is willing to use debt financing, because building projects are seen as creating jobs and thus stimulating the economy. In addition, the funds used for buildings are one time and cannot be used for ongoing wages.

Principles Governing Budget Decisions

1. As with the space challenge, I believe it is important that we work together as a college to face this challenge. Each department is strong and important to the college as a whole. It is important for departmental faculty to discourage devaluing of other departments.
2. At all costs, we must avoid getting into a situation in which we cancel classes and go back on commitments made to lecturers and graduate students. Such a situation would do serious damage to our image and result in problems in both enrollment and staff recruitment. Thus, we must be conservative in our planning.
3. It is important to keep our programs accredited. Therefore, we cannot make cuts that will jeopardize accreditation.
4. Credit production and degree production are important in maintaining the resource base for departments and the college. We cannot afford any losses in credit and degree production.
5. Departments were differentially hit in the last economic downturn and in last year's cuts. Past history and current "leanness" will be considered in planning cuts.
6. Again this year, at budget time, we will be asked by the legislature to recount how we have addressed the teacher shortage. Therefore, at this time, we cannot make major cuts that will lower the number of teachers we produce. However, we will examine ways of relieving some of the fiscal pressure of teacher education.
7. We will work to secure, first, our faculty, staff on state lines (as opposed to contracts), and students. It is hoped that any necessary reductions can be accomplished through attrition and paring down of contracted services rather than layoffs.
8. Public relations remain important, even in difficult times. To that end, it is important that we continue our publications and PR campaign. This effort should contribute to future resources.
9. If across the board cuts are necessary, departments will be given control over the way in which those cuts are taken providing that they have a written plan that comports with these principles and any additional campus principles.
10. Finally, research and outreach provide important funding streams that enable flexibility for departments. This fiscal challenge should serve as an impetus to strengthen such efforts in some departments. As operating funds dwindle further, research and outreach will be the only sources of flexibility for departments and faculty. The college research coordinator (Elizabeth Lintz) and outreach coordinator (Amy Hutchinson) can be of assistance to faculty in planning research and outreach initiatives.