John HaegerNorthern Arizona University and President John Haeger are preparing to battle a formidable opponent, and they don’t even know who it is yet.

With a decrease to the institution’s current budget looming large, the campus is facing a variety of scenarios that may arise when the state Legislature announces the university’s budget cut, which could be anywhere up to 10 percent or more—and that’s from the current budget.

“We don’t want to make cuts that imperil the future,” Haeger said during a campus-wide forum Monday in the High Country Conference Center.

Addressing a crowd of more than 400 people as well as an online audience, Haeger said the university’s goal is to make decisions on budget reductions that reflect NAU’s mission, strategic plan and priorities.

“University priorities take precedence over all other priorities, since they benefit the whole,” he said.

To address the upcoming budget decrease, the president announced six immediate steps:

  • freeze on hiring with any exceptions requiring the president’s approval
  • limiting tenure-track searches for FY09-10 to positions necessary for accreditation
  • travel restricted to “critical university needs”
  • continued review of expenditures greater than $50,000
  • increase in university fees and charges
  • increase university administrative fee to 8 percent for FY10

He also has set targeted cuts to each vice presidential area, including the Office of the Provost, whose budget is about 54 percent of NAU’s fluid funds, 92 percent of which is salaries and employee-related expenses, or ERE. Salaries and ERE account for 75 percent of NAU’s total budget.

These steps are in addition to actions already taken, which include delayed searches for several administrative positions, more than 20 tenure-track positions and 15 to 20 staff positions.

The university’s budget cuts are the result of an anticipated shortfall in state revenue of about $1.2 billion in FY09 and a projected shortfall of $2.2 billion to $3 billion in FY10, which begins July 1. The Legislature may meet in a special session this month to address the budget.

The president presented a scenario for a 6 percent budget cut for FY09. If the cut approaches 10 percent or more, Haeger said, “A very different approach would be required.”

At 10 percent—around $16 million—the university would have to consider layoffs, cuts in academic programs, decreases in service and “substantial” increases in tuition and fees.

“Some universities have even come back with midyear tuition increases,” he pointed out.

The Arizona university system also will work with a new political structure in Arizona with Jan Brewer assuming the governor’s role for Gov. Janet Napolitano, who has been nominated by President-elect Barack Obama for homeland security secretary. Brewer most likely will take office around February. The state Legislature also has a host of new leaders in the House and Senate.

“Gov. Napolitano will settle the ’09 budget, but the FY10 budget will be from a new Legislature,” Haeger said.

The president also shared some of the discussion that arose Nov. 15 at a scheduled Leadership Day.

Some of the suggestions included:

  • Charge market rates for services provided to outside entities. Haeger said the idea is valid, but because NAU is part of a smaller, rural community, the idea would have to be carefully weighed.
  • Outsource some NAU services. “I’m asking for a business plan regarding outsourcing,” Haeger said in response to a question from the audience. “You have to be careful with outsourcing, because once you go there, you can’t go back.”
  • Postpone software upgrades and equipment purchases
  • Weatherize buildings
  • Use electronic routing of forms. “It’s our chance to be a paperless campus,” the president said.

Answering a member of the audience, Haeger said that the university has made no plans to cut employee benefits, including heath care and tuition discounts.

Go to nau.edu/budgetinfo to view a webcast of the session, download a copy of the president’s PowerPoint presentation and view the budget guiding principles.