Gov. Mike Beebe’s recent announcement that $100 million would be cut from the state’s budget has hit home, as the decision will result in Henderson State to cut 2 percent of its budget — or $425,093 — for the rest of the fiscal year.
Dr. Charles Welch, president of Henderson, said Friday the cut is “not something that caught us off-guard,” as budget and finance officials at the university knew the state’s September revenue was “poor.”
The state has received $99.9 million below what had been forecasted for the year. In September alone, the state’s revenue was $55 million below forecast, Welch said.
The president said Friday that university administrators’ deadline for submitting where the cuts will be made is today. “We’re still trying to figure out where to cut,” he said in the interview, but said no funds would be cut that would affect individual personnel or individual budget areas.
There have been no conversations or decisions made regarding an increase in tuition, according to Welch, “But it will be difficult not to raise tuition and have the services and programs we have now.”
Neither will there be any layoffs. “We’re proud of that ... We’re not discussing layoffs at this time, nor are we discussing increasing insurance or retirement premiums.” No benefits will be affected, “barring any additional cuts.”
“At this point, we hope to make up (the cut) with salary savings,” as well as savings the school has made with insurance premiums and utilities.
The university faced a similar problem with a $1.34 million deficit in its budget in March.
That problem, Welch later said, was fixed — barring any unforeseen circumstances with state cuts. But, Welch said Friday, “this is that unforeseen circumstance.”
“Fortunately, our institution’s budget was in good shape — we felt it was good, and that we were moving right along.” He said the school was “as conservative as we could be” at budgeting time, “and that helped” the situation the university faces now.
During the budgeting process, a “cushion” was made, with about $400,000 left unappropriated. After this cut, however, that “cushion” will be gone, Welch said.
Welch’s concern: “Are we finished? Will there be more cuts? ... Some say October and November will be better.”
He said the most “frightening” aspect of the cut is the possibility that the problem will carry over into the next fiscal year.
Henderson was slated to receive $226,000 in federal operating stimulus funds, but it is unknown if that money can be used to relieve the university. The cut, Welch said, “is not going to cripple us, but it tightens an already tight budget.”
It was better to receive the news now than in January or later, he said, because it buys administrators some time to find the funds and re-budget.
The $100 million statewide cut will also affect the state departments of Correction, Community Correction, Health and state police. The reduction cuts Arkansas’ expected revenue for the fiscal year, which began July 1, to $4.4 billion.