Every year the leadership at our schools has struggled to balance their individual budgets. Our institutions have few areas to trim expenses given that 80% of our total spending is dedicated to personnel costs and 95% of our fulltime staff is represented by bargaining units. It has become abundantly clear that our operational costs are outpacing our revenues creating a true structural deficit.
Cutting costs has helped the system to address immediate budget shortfalls but these strategies will not lead to long-term sustainability. Further, these cuts have reduced student services that they need to succeed. We have asked students to bear a portion of the cost of their education through tuition and fee increases, but we cannot charge them the double digit increases required to balance the budget without compromising affordability.
So today, we find ourselves facing enormous challenges. For these reasons, I was charged by the Board of Regents to develop a management plan to put our system on a predictable and sustainable path for the future. Now is the time to make tough decisions that will involve difficult choices and change is always hard. We need to look at our organization and determine how it can be reconfigured to ensure that resources are focused on teaching and learning and we're putting our students first.
We have to ask ourselves, are we really serving our students well if we continue to make cuts each year? Does it really make sense to continue "business as usual" and risk the high quality learning our students expect and deserve? Aren't we doing a disservice to our state if we don't preserve academic excellence and prepare our students for the competitive workforce that awaits them? How can we improve graduation and retention rates if we aren't spending vital resources on student services?
The overall guiding principle in our deliberations has been keeping Students First; meaning that students are at the center of any proposed strategies; that teaching, learning and high quality academic programs are prioritized; and that student support services are preserved and enhanced. We cannot balance our budget on the backs of our students nor can we continue incremental cost cutting that only limits our long term success.
Therefore, I am recommending to the Board two strategies for immediate implementation. The first is an administrative consolidation across all institutions and system office of non-student facing/administrative personnel. I am proposing integrating operations such as IT, Human Resources, Purchasing and Contracts, Facilities and other "back office" functions. The target savings of this recommended strategy is approximately $13 million. This will eliminate redundancies across our campuses, leverage the expertise of our talented staff, and allow better coordination and consistency of non-student facing activities.
This integration starts with pooling the talent currently spread across our institutions statewide both virtually and on campuses. For instance, institutional research which provides analysis of both individual campus and aggregate system trends will benefit from tapping into the expertise of staff system wide rather than limiting their focus to individual campuses. In human resources, staff can be pooled not just to provide daily support on our campuses but to share their expertise in labor relations, hiring and promotion and disciplinary actions with their sister institutions. A restructured system office can coordinate functions centrally while administrative staff will conduct daily campus activities.
Secondly, I am proposing an operational consolidation of our 12 community colleges into one that is centrally managed and maintains the unique mission, geographic locations and local community connections. This will require a phased in approach for the consolidation of leadership and management. The savings target for this recommendation is approximately $28 million. This strategy calls for the significant reduction of campus leadership and management in addition to the administrative consolidation called for in the first recommendation.
What I am proposing to you today is the first step towards a sustainable path forward. To be clear, reductions in faculty and student-facing functions such as advisors are not included in either of these strategies. And when resources are saved through these proposed strategies, we can reinvest them in faculty and staff who facilitate student engagement and success.
As I have said repeatedly, all options have been on the table. We examined the closing of community college campuses and the operational consolidation of our universities. We looked at regional consolidation of the universities and colleges and elimination of system office. Those options did not meet our guiding principles, were not feasible for long-term growth, or were potentially more costly.
That said I want to be very clear. We are currently operating on the assumption that for the next fiscal year we will have a decrease in state funding of at least $35 million. If however, there is no SEBAC agreement and our deficit increases, we will have to revisit and possibly adopt those strategies.
Though I am not proposing the consolidation of our universities and colleges, I want us to look for potential regional partnerships between our universities and our colleges. Are there ways they can collaborate on academic programming or student engagement? I want us to look at ways to leverage our online institution, Charter Oak and see if there are ways to better serve our students.
In order to move forward with these options, I will create implementation teams for specific areas. Building a sustainable organizational model will be a monumental task, but a critical one for our system's future. These are difficult decisions, where absolutely nothing was taken lightly. But I truly believe we have a responsibility to our students and our talented staff to preserve the high quality learning environment that is unique to our institutions. Doing nothing is not an option. Our system as it is will not survive. Our institutions deserve the opportunity to grow and be even greater than they are today but with a stable sustainable future.
I want to personally thank all of our CSCU students and their families for investing in their education and our system. Now it is our turn to directly address our challenges and position our system for a stable future. By doing so, we can continue to provide affordable, innovative and rigorous programs and services that allow our students to achieve their personal and career goals and continue providing the educational experiences they deserve.Sincerely,
Mark E. Ojakian