BUDGET HISTORY: University Facing deficit budget for 1995/1996

The Federal and provincial governments are in debt. Will the University of Calgry follow suit?

This year’s preliminary operating budget is out. Despite an $11.5 million reduction in provincial funding from last year-more than $2 million of which remains to be cut-the U of C Board of Governors is demanding a balanced budget.

“We are going through the budget on a dollar-by-dollar basis,” said U of C President Murray Fraser. “We will not bring through a deficit budget.”

“The 95/96 budget is just one year in a five-year plan,” explained Keith “Sparky” Winter, vice-president (finance and services). “We’ve always said that this is going to be the toughest year for us, and I think the plans are now going according to expectations.

“There are people who say we could go to the government and ask for them to help us. And the government could say, ‘We’ll give you money to get you through,’ or they could say, ‘We’ll let you run a deficit for this year’… I’m not a fan of that,” said Winter. “We don’t go into the deficit business.”

The university has been forced into this financial situation because of on-going funding cuts from the province. In February of 1993, Fraser outlined the U of C’s plan to reduce operating expenditures by 17-20 per cent over a five-year period. Shortly thereafter, the province announced it was reducing operating grants to universities by 21 per cent over the next three years, in increments of 11, 7 and 3 per cent respectively. The 1995/96 year will be the second year of the provincial cuts (7 per cent).

According to Winter, running a deficit has been suggested repeatedly by all sorts of people, but he maintains that The University Budgeting Committee (TUBC) is going to come up with a balanced budget.

“Over the five years, we have enough in our reduction plan to meet the cuts the province has imposed on us. The problem we’re facing is to get as much as possible at the front end because the cuts are at the front,” said Winter. “We’ve asked deans and directors several times in the process to find ways to make things happen sooner rather than later.

“We can also ask budget units to speed up the cuts that they have down the road.”

Students’ Union President Jason Allen is concerned about the budget’s implications for students.

“BoG instructed TUBC to prepare a balanced budget. That’s basically a formality-unless BoG decided they wanted to run a deficit this year,” said Allen. “(Going into debt) has been talked about, but in no serious way.

“Last year we got rid of a lot of fat. This year we have to look at ways of cutting that may end up seriously affecting students,” said Allen. “One thing I’m worried about is that a lot of capital expenditures are going to be cut… building repairs, lab equipment-things you can touch and see.”

According to Allan, TUBC has no option but to submit a balanced budget for the university. In order to do so, TUBC needs to cut over $11.5 million, to arrive at a net operating expense of $194,930,700. Looking to the future, Winter is concerned about potential changes at the federal level.

“What the federal government might do to us potentially could change everything,” said Winter. “It’s not going to be anything good for students, or for us as an organization.”

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