Olsen offers update on budget planning process

August 06, 2009

Message from Morgan Olsen, ASU chief financial officer <separator></separator>As you may be aware, the governor of Arizona has announced the initial distribution of federal stimulus funds to the state universities. ASU received $69.8 million in federal stimulus funding for state fiscal stabilization to replace part of the multi-million dollar state appropriations cuts ASU has experienced over the last year and a half.<separator></separator>To address questions and avoid confusion about the impact of those funds on the ASU budget and university operations, we thought it would be helpful to provide you with an update on our planning for the use of the federal stimulus funds.<separator></separator>ASU used a three-year planning horizon (fiscal years 2009, 2010 and 2011), which was part of the federal stimulus program’s assumptions, to evaluate the impact of the federal stimulus money on our operations. The federal stimulus funds ASU will receive in several distributions this fiscal year were included in budget planning for the previous (FY 2009) and current (FY 2010) fiscal years, and will be used over this and the next fiscal year solely to partially offset reductions in state support for higher education that started in FY 2009 and are expected to continue for the next two years. <separator></separator>This means that federal stimulus funds will be used to replace state appropriations that ASU will not receive this year or next to pay for basic operational expenses, including the salaries and benefits of ASU employees. <separator></separator>/>It is important to remember that, without federal stimulus funds, ASU would have had to more than double the economic recovery surcharge that will be paid by students beginning this fall, as well as eliminate many more jobs. Both actions would have had a significant negative impact on our ability to provide access to a high quality degree for all qualified Arizona students. <separator></separator>We are very appreciative of the support of the federal government and the governor in making these funds available to support ASU's core mission.<separator></separator>The university administration already is planning for the period after which the federal stimulus funds no longer will be available. It is important that we continue to manage our way carefully during the current economic downturn through multi-year planning, prioritization of ASU’s needs with a focus on our core academic mission, and creative and flexible management of the institution.