State asks LCSC to develop three budget plans
The administration at Lewis-Clark State College was asked by the State of Idaho Division of Financial Management on Wednesday to develop three separate plans involving a 1 percent, 2 percent and a 2.5 percent reduction to the current fiscal budget in reaction to projected state revenue shortfalls.
The request was made after Idaho Gov. Butch Otter issued a statement saying that Idaho faces a potential 5.9 percent projected shortfall in revenue for the current fiscal year. Otter ordered state agency leaders, including the LCSC administration, to spend the next week crafting new budgets with the three scenarios in the event that the general fund revenue declines as expected in the coming months.
LCSC President Dene K. Thomas met with her administration for most of Wednesday and discussed the DFM requests. She said every area of the budget will be considered strategically and preliminary plans would include reductions in operating and travel expenses. She said there is not a plan to implement a hiring freeze at LCSC, but she would consider delays in filling current openings.
The three plans are due by next Wednesday to DFM. State law gives the governor the authority to announce temporary reductions in spending.
Here is the directive LCSC administrators received from DFM on Wednesday:
DFM announced a reduction in projected FY 2009 General Fund revenue in its August 2008 Idaho Outlook publication as the result of changes in national and state economic indicators. Accordingly, DFM has reduced the projected FY 2009 revenue from $2,940,600,000 to $2,766,300,000. That is a reduction of $174,300,000 or 5.9-percent, leading to a projected General Fund shortfall in the current fiscal year.
Acting under authority granted in Idaho Code 67-3512A, the Governor may announce a temporary reduction of spending authority in order to bring spending into line with the new revenue projection. This “holdback” will require each executive department, office or institution that receives General Fund money to implement cost-savings measures in order to meet the new, reduced authorization.
The Governor wants directors of all impacted executive departments, offices or institutions to develop implementation plans outlining which functions would be affected by the holdback. Specifically, you are to develop three separate plans identifying the impact on your executive department, office or institution in the event of a 1-percent holdback, a 2-percent holdback, and a 2.5-percent holdback (Target dollar amounts are in the attached table).
With the exception of Public Schools, please base all plans solely on savings realized by reducing ongoing General Fund expenditures. While there are no mandatory ratios between expenditure type
(PC, OE, TB), all plans should be balanced and sustainable.
All plans are to be signed by the respective director and submitted in writing to the DFM Administrator no later than 10 am on Wednesday, September 24, 2008.