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FY10 Budget Update & FY11 Preview

FY10 Budget Update & FY11 Preview. Finance and Administration Advisory Group November 18, 2009. Reductions in FY10 State Appropriation. In response to lower-than anticipated state revenue collections, Governor recently announced 9C cuts, including reduction of $32M for UMass system.

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FY10 Budget Update & FY11 Preview

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  1. FY10 Budget Update & FY11 Preview Finance and Administration Advisory Group November 18, 2009

  2. Reductions in FY10 State Appropriation • In response to lower-than anticipated state revenue collections, Governor recently announced 9C cuts, including reduction of $32M for UMass system. • Implications for UMass Boston FY10 budget: • UMass Boston‘s share of the $32M reduction is $5.5M, excluding fringe (which are health benefits, pension costs amounting to $1.6M). • Total effect, including fringe, of the reduction on our operating budget is $7.1M.

  3. Implications for UMass Boston FY10 Operations • Good news for FY10: Mitigating $5.5M cut, we will receive additional $5.5M in federal stimulus money. • The additional $5.5M brings our total FY10 federal stimulus allocation to $25.6M. • To cover the costs of fringe benefits, we will still experience additional $1.6M expense • In anticipation of possible FY10 9C cuts, we created $6.0M reserve. • We will fund fringe expense from the reserve. Consequently, the 9C cuts will have no effect on our campus’s operations. • Even after using $1.6M of the $6.0M reserve for fringe, we will still have $4.4M left that we could carry into FY11 to help with the loss of nearly $26M of federal stimulus money.

  4. Looking Ahead to FY11 • Increase in federal stimulus funds could make our FY11 budget challenge even greater. • Federal stimulus funding is one-time money that goes away in FY11. • We expect that our FY11 state appropriation will not increase in FY11 compared to its FY10 post 9C reduction level. • Very preliminary estimates based on historical budget and spending patterns suggest that FY11 budget gap could be as large as $41M:

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