I am writing to address a topic of concern within our university community, and across the State of Ohio. Ohio's budget deficit for the upcoming two-year period, fiscal year (FY) 2012 and 2013, is projected to be approximately $8 billion. This deficit is largely due to the loss of federal stimulus funding from the American Recovery and Revitalization Act (ARRA). In the last biennial budget, the state relied upon this funding as a substitute for state sources of revenue such as income and sales taxes that declined severely during the recent recession.
While there are signs that the national economy is recovering, Ohio's economy is not yet producing sufficient tax revenue to fund operations at the pre-recession level. A slow recovery, combined with the termination of ARRA funds in FY12, means that the state will not have sufficient revenue to fund its current level of expenses. Inevitably, the immediate solution is for the state to reduce its expenditures across all of its agencies and departments to match estimated revenues. The anticipated reductions will undoubtedly affect the Ohio Board of Regents (OBOR) budget, which means that Cleveland State, along with every other Ohio public two-year college and four-year university must deal with a reduction in a major source of revenue - the State Share of Instruction subsidy, or SSI.
In addition to anticipated subsidy reductions in FY12 and FY13, the State reduced our current year FY11 subsidy by $4.1 million, or nearly 6%. While there are no official statements concerning the level of the anticipated FY12 and FY13 SSI reductions, we are currently modeling reductions in SSI of approximately 20% or $15 million. We will not have a clear indication of the state's subsidy reductions until Governor-elect Kasich presents his budget proposal to the state legislature in March 2011. Whatever the outcome, it is clear that Cleveland State's budget will be substantially smaller than the current one.
Earlier this year, I created a University Budget Task Force to develop recommendations on how to deal with the anticipated reduction in state subsidy. The Task Force contains faculty, professional staff, deans and Vice Presidents. The Task Force, co-chaired by Provost Geoff Mearns and Tim Long, the University's Budget Director, has been meeting on a weekly basis for the past three months. I have directed this group to develop a strategic approach for meeting the budget challenge as opposed to simply proposing across-the-board reductions. Each college and department contributes in unique ways to achieving the mission of our University. While there will be budget reductions, I am asking for strategic recommendations so that the University emerges from this challenge as a stronger academic institution.
The Task Force will soon announce plans for an open meeting to brief you on the status of the budget situation and also receive your input and suggestions. The work of the task force reflects our commitment to collaboration and transparency throughout this process.
We all have a right to feel proud of the strides our University has made in our growth in enrollment, the physical changes in our campus, and the dedication of our faculty and staff. We deliver outstanding instruction and services to our most valuable asset, the students of Cleveland State. The adjustments we will have to make are the result of outside economic conditions, not the performance of our faculty and employees or the financial health of our institution. Our challenge is to keep Cleveland State vibrant and financially viable while we develop creative and efficient ways to operate in the future.
I thank you for your continued dedication to and support of our University.