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Budget At-A-Glance 2020

FY20 Budget Planning Process/Timeline and the Three-Year Budget “Compact”

The FY20 budget planning and development process occurred during a gubernatorial election year and the process from February 2019 through August 2019 became an unprecedented time of budget uncertainty.

Governor Walker released his budget in December 2018 and in February 2019, newly elected Governor Dunleavy submitted a revised FY20 budget request which included a devastating 41 percent �鶹ԭ�� GF reduction (or $136 million) from FY19 levels. This proposed budget is the largest budget cut in the university’s 100-year history.

In June 2019, the legislature later approved �鶹ԭ��’s budget with a much more manageable reduction of $5 million (or 1.5 percent) from FY19 levels; however, the Governor later vetoed this budget and a legislative vote to override the budget failed. As a result of the $136 million �鶹ԭ�� reduction, in July 2019, the Board of Regents declared financial exigency.

Finally, on August 13, 2019, Governor Dunleavy and the �鶹ԭ�� BOR entered into a multi-year agreement (“compact”) for FY20-FY22. The compact establishes �鶹ԭ�� operating budget reductions of $70 million over a three-year period as follows:

• FY20 �鶹ԭ�� Operating Budget $302 million (-$25 million from FY19)
• FY21 �鶹ԭ�� Operating Budget $277 million (-$25 million from FY20)
• FY22 �鶹ԭ�� operating budget $257 million (-$20 million from FY21)

With the compact agreement, �鶹ԭ�� was no longer facing an impossible $136 million state appropriation cut in a single year, but rather a very difficult $70 million cut over three years. The Board of Regents declaration of financial exigency was terminated in August.

�鶹ԭ��F’s estimated GF reduction proportion is roughly half (50 percent) of �鶹ԭ��’s total cut, however, unfunded fixed cost increases and internal reallocations directed to specifically defined initiatives increase the total budget reduction target across all universities.

Per the compact, the FY20 capital budget is established as follows:

• FY20 $5 million facility deferred maintenance
• FY21 and FY22: TBD

FY20-FY22 �鶹ԭ�� and State of Alaska Three-Year Budget “Compact”,  August 2019

Other FY20 budget highlights include:

1. Dual appropriation structure

�鶹ԭ�� operates under a dual appropriation structure in FY20, with �鶹ԭ��’s community and southeast campuses in one appropriation, and main campuses and system offices in a separate appropriation. The reimbursable services agreement (RSA) process will be used to charge for services between appropriations.

2. Compensation

The Board of Regents approved the FY20 operating budget which includes $3.4 million in compensation adjustments related to equity and market. A key element of �鶹ԭ��’s compensation philosophy is that University employees are paid at least 90 percent of the market median for their job. The plan for these adjustments is to bring all university employees that are currently below 90 percent of the market median up to 90 percent over the next three years (FY20, FY21 and FY22). Since additional funding was not provided by the legislature, the adjustments are to be funded through reallocation at each university.

For the FY21 proposed budget, the $7.1 million funding reallocation requested includes funding to address specific market increases ($3.2 million) as well as general market increases ($3.9 million).

3. Title IX

�鶹ԭ�� invested a total of $742 thousand in Title IX funding to address areas of acute concern and better positions the university to grow the culture of respect, service, safety and compliance.  Of this total, �鶹ԭ��F’s share is $310 thousand (41.8 percent). At �鶹ԭ��F, this funding supports investigator positions ($295 thousand) and Green Dot bystander intervention training ($15 thousand). Title IX investments are funded through reallocation at each university.

FY20 �鶹ԭ�� and �鶹ԭ��F Strategic Investments: Base and One-Time

In addition to the $25 million GF reduction, �鶹ԭ�� internally reallocated a total of $9 million for strategic investment goals. Of the $9 million total, $5 million was funded from reallocation of �鶹ԭ�� GF base and $4 million was funded from one-time system office funding. The one-time funding pool began in FY19 and was originally planned to be a three-year commitment (FY19, FY20 and FY21); however, the difficult budget process and university structural discussions resulted in altered plans where FY20 is the final year of commitment.

Of the $9 million �鶹ԭ�� system total, �鶹ԭ��F received $3.8 million to fund the Board of Regents’ strategic initiatives including: contributing to Alaska’s economic development, providing Alaska’s skilled workforce, growing world class research and increasing degree attainment of students, and increasing cost effectiveness.

Other reallocations

• FY20 is the final year of the �鶹ԭ��-wide research investment of $1.8 million, of which �鶹ԭ��F received $1.4 million.
• �鶹ԭ��F also reallocated base funding to support Title IX investments.
• The Strategic Enrollment Planning (SEP) Steering Committee convened in fall 2018 to continue the university wide planning process to recruit and retain students. In October 2019, the Chancellor committed $1 million for FY20 investments via reallocation of base general funds to support initiatives reviewed through the SEP process.

Chancellor White Memo - FY20 Strategic Investment Allocations - October 2019

Up to date information from Chancellor White may be viewed on the Chancellor’s Budget Communications website.

For FY20, the �鶹ԭ�� Board of Regents approved an operating budget request of $358 million, a 9.6 percent increase over the FY19 �鶹ԭ�� budget of $327 million. This level of request supports compensation increases, fixed costs, Title IX and campus safety, and �鶹ԭ�� strategic initiatives. �鶹ԭ�� also put forth a $50 million capital request for DM, $5 million for sustaining USArray research capabilities in Alaska (for �鶹ԭ��F), and $2 million for digital fabrication laboratories.

FY20 �鶹ԭ�� Operating Budget Request- BOR Approved - November 2018
FY20 �鶹ԭ�� Capital Budget Request- BOR Approved - November 2018

 In July 2018, the State of Alaska Office of Management & Budget provided early budget guidance to all state agencies to be cognizant that budget constraint is the new normal. The overarching expectation is to provide a safer, smarter, and stronger Alaska. 

�鶹ԭ��F is preparing an initial FY20 budget request in collaboration with �鶹ԭ�� and the other universities. The first review with the Board of Regents' is in September 2018, with final approval in November 2018.

�鶹ԭ��F is making every effort to focus its remaining resources on core mission activities, and to communicate to faculty, staff and current and prospective students that �鶹ԭ��F continues to be a strong institution with a bright future.

�鶹ԭ�� is currently also leading a review of some key academic and administrative areas in an effort to streamline operations, known as the �鶹ԭ�� Strategic Pathways review.  For more information on this review please visit the .