U. Massachusetts Braces For Budget Cuts As Spiraling Economy Hits Home

This story was written by Kate Olesin, Massachusetts Daily Collegian

The national issue of the downward spiral of the economy is beginning to resonate at home as the state of Massachusetts begins some serious budget cuts.

Gov. Deval Patrick's office announced on Oct. 2 that it would slice 10 percent from the Legislature's budget and 7 percent from his own office's budget, the Boston Globe reported.

However, that's only the beginning since Gov. Patrick also added that he expects to slash "hundreds of millions" in layoffs and budget cuts by Oct. 15, according to the Globe.

The state is reacting to the national financial crisis. With dwindling funds and the condition of the credit markets making it hard for the state to borrow, paying the bills is getting tougher and tougher.

With the state budget starting to cut back, the University of Massachusetts system waits with bated breath, but a sense of determination, since the governor did indicate that higher education budgets would be affected.

"I think certainly it's a moment that President Wilson and the Chancellors and senior officials have been preparing for, for some time since certainly the economic news has taken a downturn in the recent weeks," said Robert Connolly spokesman for the office of the President. "There's a commitment to working through this moment and we'll get through as the University has worked through these moments before. There's light at the end of the tunnel."

According to Connolly, each UMass campus is working on its own plans in reaction to the state budget cuts. But it would mostly concern faculty and staffs' paychecks, since a "preponderance" of money the UMass system borrows from the state goes to those positions. However, the University is rather limited as to what it can do, seeing as the budget cuts are coming in the middle of the fiscal year.

"It's a general sense that [the campuses] are going to have to look at whatever spending reductions are going to be made and take a comprehensive look at their budgets," said Connolly.

As for UMass Amherst, University spokesman Ed Blaguszewski said that UMass will adapt to whatever comes its way, which includes borrowing less, slowing or postponing building projects, or dipping into the state's appropriated funds.

"It really is premature for us at the Amherst campus to be talking about how [the national crisis] may affect us at this point," said Blaguszewski. "But it's no secret that if the credit markets remain tight everybody will be affected here."

Despite the economy's bleak outlook, UMass and its new chancellor are gathering their forces to deal with budget cuts.

"Chancellor Holub and budget officials at UMass Amherst have been preparing plans to work through financial difficulties," said Blaguszewski. "These include pending mid-year cuts in UMass Amherst's state appropriation of $227.3 million, and the challenges we face in financing the campus' building program amid the international credit crisis."

"While it is still uncertain exactly what impact events will have on our finances, we will make choices focused on the long-term interest of the University and our pursuit of excellence," he continued.

In addition, to the state and national financial crises, question one eliminating the state income tax, placed on the ballot bill threatens to violently shrink the University systems' budgets if passed next month.

"Question one on the ballot would eliminate the state income tax," said UMass Amherst spokesman Ed Blaguszewski. "Clearly that would have a very damaging effect on the University's finances and we would have to consider very deep cuts and fee increases going forward."

"I think [question one is related of course because everybody is concerned about their finances and proponents of the state income taxes are making their case. We certainly support that [the income tax] is money well invested for the future of the Commonwealth and in today and tomorrow's young people and their economic opportunity," continued Blaguszewski. "But people are making this decision in a difficult economic climate."

AmherstWire, a student-run online news magazine, created a set of videos interviewing UMass economics professors who shared their interpretations of the financial crisis and its trickle down effect into the state economy.

"The result [of the national crisis] is less money goes to the state of Massachusetts as well as the other 49 states," said economics professor Richard Wolff in the video interview. "What does the state of Massachusetts do with the tax money? It supports the University of Massachusetts and if it gets less taxes we're going to get less money.

"Less money for scholarships, less money to hire TAs, less money to pay the professors, less money to maintain the buildings, charging more fees, charging more costsall the thousands of little ways the University - caught up in this system - is going to be squeezed," Wolff continued. "University students are going to be pressured to make more payments while they get less services."

As for the crises effects on financial aid, University administrators are optimistic, intending on working hard to keep their availability.

"Until we know the dimension of [the budget cuts], those dimensions will obviously determine the steps that we take," said Connolly. "Tough times are where you have to continue to make investments in the right places and certainly there are a lot of things that the University does to spur the economy and touch people's lives in positive ways. The fiscal outlook overall is pretty challenging but financial aid is one of those areas where you have to invest in Intelligence, education and innovation are our basic economic raw materials."

Financial aid has experienced great growth over the past few years, which is something the University aims to continue despite the state cuts. During the previous fiscal year, 2007-2008, the University system saw $473 million in all forms of financial aid, up from $229 million in FY 2002-2003, according to Connolly.

As for student loans, the UMass outlook remains skeptical and uncertain, since the national crisis is severely effecting borrowing ability.

"How [the credit markets' state] may affect student loans going forward is unclear," said Blaguszewski. "We had an issue early this year with the Massachusetts Higher Education loan board and their inability to arrange financing for the fall semester. UMass Amherst managed to provide alternate ways for people to get their loans and that didn't turn out to be a significant problem. Again, we're okay on that front now, but we'll need to monitor that."

Some UMass students didn't feel as though it affected them, except on the prices of the products they've been buying. But others said they don't feel their toes dipped in the crisis just yet because, other than college, they have relatively no ties to the financial market.

"I'm not completely financially independent yet," said senior, biochemistry major Nicole Zarba. "I don't own a house I don't have kids - I'm still free floating - just renting apartments for a little while. I feel like if I was owning a house and stuff I would be more concerned about it and more worried about where the economy is going to go. But maybe when I'm actually at that point in my life I'll have something to worry about."