Legislative update: a briefing for faculty and staff of the University System of Georgia, No. 6 (Feb. 17, 2003)

LEGISLATIVE UPDATE
A Briefing for Faculty & Staff of the University System of Georgia
"Creating a More Educated Georgia"

No. 6, Feb. 17, 2003

House Passes FY '03 Amended Budget With Few Changes

Recommends $10M Increase in MRR Funds, $250,000 Decrease in Health-Care Benefits

The Georgia House of Representatives passed its version of the Fiscal Year 2003 Amended Budget on Thursday. The midyear budget, which runs through June 30, honors the vast majority of Gov. Sonny Perdue's recommendations.
Here is a summary:
The House:
deleted $250,000 from the $4 million recommended by

the Governor to cover rate increases to the employer share of the healthcare benefits offered to the University System's 35,000 employees;
added back $1.7 million to the budgets of two "BUnits," the Cooperative Extension Service and the Agricultural Experiment Stations;
added back $516,250 for the

construction of public libraries in Telfair and Wheeler counties by the Georgia Public Library Service;
added $10 million to the $25 million recommended by the Governor for Major Repair and Rehabilitation (MRR) funds; and
deleted $15 million in bonds for the redevelopment of a bio-containment facility in the

University of Georgia's Animal Health Research Center.
What's Next?
The FY '03 Amended Budget now has moved to the Senate for consideration, while House committees have begun their work on the FY '04 Budget. Budget hearings will be conducted in earnest while the General Assembly is in recess on Feb. 1921 and Feb. 24-25.

Meredith Speaks to House Subcommittee on FY '04 Budget

Priorities: Formula Funding, MRR/New Construction Funds and Health Benefits

C hancellor Thomas C. Meredith appeared before the House Higher Education Appropriations Subcommittee on Thursday to outline the University System of Georgia's Fiscal Year 2004 Budget request.
Meredith told subcommittee members that the most critical elements of the budget -- items "basic to our ability to operate" --

are the funds generated by the University System's funding formula. These include $81.5 million in new money to meet the rising demand for instructional services created by record enrollment growth and $6.7 million to cover the operation and maintenance of 1.6 million square feet of new USG facilities built to meet the growing needs of these students.

Gov. Sonny Perdue has recommended funding of both of these formula items.
"These dollars are needed to serve the students in our classrooms today, even though the number of students today is higher than these formula dollars are intended to support," Meredith said, referring to the fact that the formula is based on

past increases in credit hour enrollment.
"We are serving more students. These students are using more of our services," the chancellor said. "In light of the overall budget cuts, the increased formula dollars are not just critical, they are our lifeline."
The quality of the University System's students continues to
See "Meredith," Page 2 ...

LEGISLATIVE UPDATE -- February 17, 2003, Issue No. 6

Meredith
Continued from Page 1...
rise, Meredith said, pointing out that the average SAT scores of entering freshmen have been climbing steadily and reached a record high of 1030 this past fall that is above the national average. But budget cuts are going to adversely affect the quality of programs and services students receive.
The bottom line, Meredith said, is that, "We will be operating with record enrollments and less dollars in FY '04 than in FY '03."
Lottery Funds Needed
The chancellor asked legislators to "keep the door open" on using Lottery funds to pay for existing USG programs -- including GALILEO, the Equipment, Technology and Construction Trust (ETACT) Fund, and Connecting Teachers, Students and Services -- that have traditionally relied on this funding source.
"While I understand the Governor's desire to fund only prekindergarten and the HOPE Scholarship Program, the projects that have been funded through Lottery funds

in the University System budget will have to be funded through internal sources if they are to continue to operate," Meredith said.
Funding Health Benefits
The chancellor also called legislators' attention to the Board of Regents' request for $22 million to cover the employer share of rate and premium increases in the retirement, health insurance and life insurance plans it offers its 35,000 employees.
"Regardless of whether or not this item receives funding, the bills will have to be paid, and our institutions will have to make additional cuts in other areas to meet these obligations," Meredith said.
Turning to funding for capital projects, the chancellor expressed appreciation for the $157 million recommended towards capital outlay -- a figure that includes some dollars for other agencies administratively attached to the University System.
Stressing the regents' laborious, analytically based process of identifying and prioritizing facilities needs, Meredith urged legislators to continue issuing

bonds to support the University System's construction programs and design funds to ensure that additional projects are in the pipeline when construction funds become available in the future.
"While our list of capital priorities is long, it is well though out, efficient and justified," he said. "We have made a concerted effort to leverage state dollars by bringing in private funding at every opportunity. We know that times are tough, but using bond funds to jump-start the economy is a formula that has been used successfully in the past."
Maintaining Facilities
Before closing, Meredith made a plea for the regents' request for Major Repair and Rehabilitation (MRR) funds needed to maintain the USG's rapidly expanding, aging and highly used facilities.
"There were significant cuts to MRR funding in the FY '03 Budget," he reminded the subcommittee. "These cuts have long-term impacts. Repairing a leaky roof today ultimately costs far less than replacing an entire roof tomorrow.
"The recommen-

dation of $32 million in the FY '04 Budget for MRR is vital, but I cannot state forcefully enough that it is far short of what is needed to keep our more than 3,000 state buildings in proper repair and operating condition," Meredith said.
Top Budget Priorities
The chancellor summarized the System's FY '04 Budget priorities as follows:
funding the formula;
providing the dollars to maintain the state's $5.8 billion investment in facilities;
securing the funding required to maintain health benefits for 35,000 employees; and
providing new facilities needed to serve the System's growing enrollment and increasing demands on its services.
"It is important that we keep the momentum of this historic investment in public higher education," Meredith said. "It's important that we don't lose sight of our longterm goal during this current fiscal year -- to create a more educated Georgia."

-- 2 --