All University of Arizona colleges have been asked to submit budget plans that incorporate spending reductions of 3%, but a UA spokesperson says “these are all hypothetical scenarios,” not decisions.
The exercise is being done as the first stage of the budget planning process for next fiscal year, in which preliminary budgets calibrated to the overall health of the organization are commonly asked for, officials say.
“There are no conclusions yet — this is simply the first part of the process to determine what each college’s and division’s budget will be,” said Mitch Zak, the UA spokesperson.
“The main point here, though, is that these are all hypothetical scenarios intended to inform the planning process. So, again, I would just stress that no final decisions have been made as to if there are going to be cuts and what they would be,” Zak said.
UA Faculty Chair Leila Hudson said there is a communication problem when central administrators think people understand this is simply a modeling exercise where not all units will take 3% cuts in the end, while faculty and staff are feeling “abysmal morale” and “excruciating” uncertainty after last year’s budget cuts and layoffs.
“I think the central authorities think it’s clear that this is just an exercise and most academic units will not be asked to make these difficult cuts. I’m not sure to what extent that has been conveyed effectively in this particular atmosphere,” Hudson said.
Deficit reduction process
The budget planning process for fiscal year 2026 comes in the midst of the UA rebuilding itself after the financial crisis that began in September 2023 and led to a deficit of $177 million, which has now been reduced to $63 million.
The university is working towards its goals of eliminating the entire deficit by the end of this fiscal year, which is July 1, 2025, and of providing raises to employees in fiscal year 2026, according to previous statements by UA President Suresh Garimella.
To that end, in the 2024-25 year, the university’s academic units have seen an average of 3.5-4% cuts, while the administrative units were cut an average of 10-15%, Zak confirmed.
To develop potential budgets that reflect a 3% reduction in spending, for discussion purposes, is “a normal part of the planning process where colleges and divisions work with university leaders — the chief operating officer, chief financial officer — to begin a collaborative process whereby the final budgets for each college and division are developed,” Zak said.
John Arnold, the UA’s COO and CFO, said it was common, in his two years of working on UA’s budgeting, for central administration to work through exercises for cost-saving measures and for investment opportunities.
In the budget planning process for last fiscal year, colleges and units were asked to submit budget plans with 5, 10 and 15% cut scenarios to make sure the university was doing everything to live within its means and achieve its mission, officials said.
Zak said the exercise is especially important in a deficit situation.
“It’s a prudent way to begin the planning process when you’re in a deficit situation, but obviously it is simply the first part of the conversation between the colleges, unit leaders and John’s (Arnold’s) team on, ‘how do we address the remaining deficit while continuing to prioritize our focus on academics, research and the university’s teaching and land-grant mission?’” Zak said.
University of Arizona students on campus.
Mark Stegeman, an associate professor of economics in the UA Eller College of Management, agreed it isn’t an unusual pattern.
“I don’t think anyone is shocked or startled that this exercise is happening in this way,” Stegeman said. “This is a pretty standard approach to ask units to produce budget cuts of different sizes. The central (administration) collects the data and it somehow helps them make a decision.”
Gary Rhoades, a professor in the UA’s Center for the Study of Higher Education, said he thinks it’s “absolutely true” this is an exercise as it was last year, but that it’s also “absolutely true” that last year’s exercise led to cuts for most academic colleges.
No exceptions for administration
All UA budget units — academic, administrative and auxiliary — with no exceptions were asked to submit budget plans with spending reductions by Dec. 20, 2024.
Next, meetings will take place starting in early February between Arnold and Interim Senior Vice President for Academic Affairs and Provost Ron Marx with college deans and unit leaders, Arnold said.
Zak described those meetings as “collaborative and constructive.”
The budgets for the academic units were established in early April last year, while the administrative budgets weren’t finalized until June, said Arnold. The timeline will likely follow a similar pattern this year, he said.
“Our plan is to establish those academic unit budgets, allow them to plan for the upcoming academic year based on those budgets, (and) if there’s additional adjustments we need to make, we’ll do that on the administrative side, unless the state does specific things and we’ll have to go back with the academic units,” Arnold said.
Already faced “very large cuts”
Faculty and staff across the UA have had strong reactions to what the ground-level impact would be if spending is cut by 3%.
“Whether the cuts are going to happen or not, simply asking colleges to develop a plan or a 3% cut scenario is demoralizing,” said Jeffrey Michler, an associate professor of agriculture-resource economics. The colleges already faced “very large budget cuts” due to the deficit, he said. “Morale among faculty and staff are already low, and then saying we may have to cut more, just exacerbates the low morale.”
Michler said the budget cuts last year forced the academic units to be as efficient as possible with the resources they had.
“Every academic unit is different, but I know that if my college (College of Agriculture, Life and Environmental Sciences) had to face 3% budget cuts in addition to (what) we faced last year, there are no more efficiencies to be gained,” he said. “To make 3% cuts in the College of Agriculture will require us to reduce delivery of our mission. It means we’ll have to reduce resources for teaching and research, and we will not be as effective in helping students succeed.”
Hudson, the Faculty Senate chair, said she doesn’t think central administrators sufficiently appreciate or understand the range of workload issues the academic units are facing due to the financial crisis.
“There’s still a great deal of resentment that units, especially academic units across the board, are being asked to tighten their belts once again for a deficit” that was mainly caused by non-academic units, she said.
Rhoades said “the academic colleges have been getting increasingly undercompensated for their productivity” over the years.
Acknowledging that morale at the ground level is impacted, Arnold said the faculty, staff and deans at the university are extraordinary and have had to navigate very difficult circumstances.
“I am just incredibly impressed with them (and) the energy that they bring everyday,” Arnold said. “So, just very appreciative of our faculty, staff and leadership, and their cooperative efforts.”
“A lot of what I’m getting is some excitement around what comes next and ideas on ‘how do we expand, where we can make investments, the next things coming down the academic pipeline, and how do we tap into those things,’” Arnold said. “I think people are ready to be done with the discussion around deficits and ready to move on to, ‘how do we invest and grow the university and really advance on into the next iteration of the University of Arizona.’”
Are more layoffs coming?
Asked whether more layoffs could be coming, Arnold said that was a premature question which would be addressed in the later stages of the budget planning process.
“What we do is work with each unit. It’s up to those units to implement their changes, and so I don’t know,” Arnold said. “As I look at my own unit and the reductions that we’re starting to work through for the units to report up to me, I’m hoping to be able to implement those without specific layoffs — just through managing, hiring, natural turnover rates and those kind of things.”
Zak said there are still certain “efficiencies and savings to be had” when college deans and unit leaders determine their staffing plans and resources, and that those decisions are made at the university and unit levels and not by the administration.
Rhoades noted it isn’t just layoffs that reduce the force. Non-renewals of year-to-year contracts are another issue, he said.
Hudson said she has heard from more than one unit head that there is nothing left to cut but personnel.
“At the university level, I think there is a widespread understanding that after the voluntary and involuntary losses of faculty and staff last year, campus can’t function with fewer staff and fewer faculty,” she said.
