The Proposed FY2022 Budget
During the past year, the University of South Florida has engaged in a rigorous and comprehensive budget process. This year’s university-wide budget planning process was made more complex by the uncertain financial implications of the long-lasting COVID-19 pandemic and its associated impacts to state funding and economic recovery.
We wish to acknowledge that the environment of financial uncertainty as part of the profoundly disruptive COVID-19 pandemic has affected every member of our university community. Sacrifices by colleges, faculty, staff and students have been acute, and our gratitude is earnest.
Our inclusive Strategic Realignment process included many hours of consultation throughout the past year with deans, the President’s Cabinet, including Regional Chancellors, and the Faculty Senate Executive Committee, including department chairs and branch campus representatives. A set of Guiding Principles developed by the Board of Trustees in December 2020, along with an abiding commitment to strengthen USF’s core academic mission, informed our entire process.
Now that two key milestones have been met, we have the clarity necessary to put forth a proposed university budget for the 2021-2022 fiscal year (FY2022). These milestones are: (1) the governor’s approval of the state budget, and (2) the USF Board of Trustees’ approval of our 10-year strategic plan, which identifies institutional core commitments and strategic initiatives.
As a result, we will present a proposed FY2022 university budget that reflects a better than anticipated state budget, significant levels of one-time federal COVID-19 relief funding, and the positive impacts of the difficult decisions we made as a university community throughout the past year to support USF’s financial stewardship.
The proposed FY2022 budget:
- Returns to the colleges, USF Health, USF’s branch campuses, the Florida Institute of Oceanography, the Florida Center for Cybersecurity and the Florida High Tech Corridor Council their share of the 6% one-time funding previously held back by the state.
- Eliminates the implementation of the plan for an 8.5% base budget reduction as of July 1, 2021, for the colleges, USF Health, the branch campuses, USF Libraries and University Police.
- Reflects the absorption of approximately $10M in recurring reductions by USF business and academic support units.
- Makes strategic use of the significant one-time federal funding allocated to USF, including allocating funds for one-time 2% bonuses to faculty, staff and administration employees (and a 3% bonus for University Police) in recognition of meritorious performance of additional duties and responsibilities associated with the impact of COVID-19 on our campuses. Eligibility and payments of the performance bonuses are subject to collective bargaining and other legal requirements.
- Allocates federal funds to strengthen infrastructure and institutional core commitments and establish a one-time fund to support strategic initiatives.
- Adds further research-related overhead disbursements to the colleges, in accordance with our new Facilities and Administrative (F&A) distribution model that was developed during FY2021.
- Includes financial proceeds from a new $5M President’s Strategic Investment Endowment that will be invested in the core academic mission of the university.
- Ends the temporary hiring and compensation pause as of July 1, 2021.
Although the FY2022 budget is much more positive than originally expected, the need for fiscal stewardship and prudence remains. For example, like other public universities in Florida, beginning in FY2022 USF now faces increases in recurring costs to cover faculty salary and retirement programs and rising utility costs. The increases in USF’s share of these recurring expenses may, in part, be funded in FY2022 by reductions to business and academic and support units.
This year’s rigorous and disciplined approach to the annual budget planning process – and our willingness to spend many hours in candid and transparent dialogue together – has primed us for our work in the coming year to develop a new budget model for USF that is increasingly rational, inclusive, transparent and predictable. USF leadership is committed to working with stakeholders to develop this new budget model for implementation in the 2022-2023 fiscal year.
We will continue to follow USF’s annual process for budget distribution, per the deadlines listed on the budget planning calendar. The details of the proposed FY2022 budget will be available by July 12, 2021, and will be communicated to each college and unit following USF’s customary annual process.
University leadership will present the proposed budget as outlined above to USF’s Board of Trustees’ Finance Committee on August 10, and subsequently to the full Board for approval.
We are deeply appreciative of the collaboration among stakeholders across the university, as well as your patience and trust as we work to create a bright future together.
Summary of Key Points
In summary, the proposed FY2022 budget for the University of South Florida:
- Returns to USF Health, the branch campuses and colleges their share of the 6% one-time funding previously held back by the state. In summer 2020, the state held back 6% of USF’s fiscal year 2020-2021 allocation of general revenue and lottery funds while assessing the impact of COVID-19 on the state budget. Now that the legislative session has concluded and that funding has been released to Florida public universities, the one-time funding holdback also will be returned to the colleges, branch campuses and USF Health. The return of the 6% holdback also includes the Florida Institute of Oceanography, the Florida Center for Cybersecurity and the Florida High Tech Corridor Council. These budget units will be asked to develop strategic reinvestment plans to assure the highest and best use of these funds.
- Eliminates the implementation of the plan for an 8.5% base budget reduction as of July 1, 2021, for the colleges, USF Health, the branch campuses, USF Libraries, and University Police. In addition to returning the 6% holdback, universities were earlier asked to contribute their share to planning for an 8.5% recurring reduction in state funding. Given a more positive outlook in the state’s approved FY2022 allocation for universities, colleges, branch campuses, USF Health and USF Libraries will not be required to take their planned share of the 8.5% reduction plan in FY2022. In addition, the planned base budget reduction for Student Success will be covered by one-time funds providing for a careful assessment of recurring budget needs as a part of the planning for a new budget model. Colleges, branch campuses, USF Health, USF Libraries and Student Success will be asked to develop strategic reinvestment plans to assure the highest and best use of these funds.
- Prioritizes USF Libraries. In recognition of the critical importance of USF Libraries to our strategic goals and aspirations, USF Libraries will see a restoration of their share of the 8.5% planned recurring reduction in FY2022.
- Reflects targeted reductions. Business and academic support units will continue with approximately $10M less recurring funding, the result of their share of planning for anticipated future reductions.
- Utilizes federal funding to pay for COVID-19-related expenses. One-time federal institutional relief funding from the CARES Act, the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA), and the America Rescue Plan Act (ARPA) will be used to cover university costs and lost revenue associated with the global pandemic.
- Allocates funds to recognize employees for taking on additional duties associated with COVID-19 to safely and efficiently support the university’s mission with one-time 2% performance bonuses. Bonuses for employees represented by unions must be bargained and agreed to before the bonuses can be paid. The university is committed to good faith bargaining with all unions to reach agreements to implement these bonuses. Regardless of union status, a new Florida law requires approval of bonus programs by both the Board of Trustees and the Board of Governors prior to implementation of the program (see sec. 1012.978, Florida Statutes). The university intends to promptly develop program details and seek all required approvals.
- Addresses the need for funding for recurring expenses. USF leadership will continue to identify and address any remaining misalignment between recurring expenditures and available sources of recurring revenue, as part of planning for a new budget model.
- Sets us on a path to contemplate a future budget model. This new model will provide greater transparency and predictability of funding beginning in fiscal year 2022-2023. The process to develop this new model will be inclusive and thoughtful over the course of the next year.