Dear Maricopa:

In my video earlier this month, I spoke about the difficult financial issues facing Arizona and our district. In the brief time since then, some facts have changed and we have learned additional information that has caused us to further reassess our financial planning. I want to share this with you now.

We face several threats to our current 2009 fiscal year budget, as well as the budget for the 2009-10 fiscal year:

• The state has begun to formulate plans to try to balance its massive current budget shortfall, which is among the worst in the nation. However, we still have no indication how those plans will affect the $55 million in state monies Maricopa is scheduled to receive this year.
  
  
• In recent years, tuition increases have helped our budget situation, but there is a limit to the amount of tuition increase we can fairly impose, especially in difficult economic times.
  
  
• The national economy continues to worsen, and as it does, unemployment is rising. Arizona’s situation is worse than that of many states. In 2006, Arizona was 2nd in the country in terms of generating job growth. In 2007, it slipped to 22nd. In 2008, it was measured at 48th.
  
  
• The slowdown in construction and falling property values will result in a sharp decrease in the growth of property taxes, our largest revenue source. Property tax collections already are beginning to slip slightly, likely because of rising foreclosures in some areas.

As you know, we already have imposed a 1% permanent budget reduction for this year and another permanent 1% budget reduction for next year. Each of those cuts will result in savings of approximately $5 million. However, because of the worsening financial situation, I have asked Presidents of our Colleges and Vice Chancellors to prepare additional plans for potential budget cuts of 3% and 10% next year. I want to stress that these are only plans, to be implemented based on whatever action the state takes or if our budget situation deteriorates further. As always, we seek to preserve our principal mission of teaching and learning to the extent permitted by the resources we have, as well as to preserve the non-teaching functions that are necessary for our operation.

These are very difficult times. All forecasters predict that a recovery in Arizona is at least a few years away. Where we once funded annual salary and benefit increases, this will likely not be the case going forward. Many vacancies will go unfilled, travel and other discretionary spending will be severely curtailed if not eliminated, and many other significant changes are likely as we adjust spending levels and priorities to available resources. Districtwide, we already have proposed that the positions of a small number of employees be eliminated because of restructuring, and there may be other layoffs in the future, as well as possible reductions in compensation and/or other policy items.

Once again, I ask that each of you think about ways our departments can operate more efficiently and economically. If we pull together and find new, creative ways to operate, we will succeed. Please continue to share any ideas you have with your college leadership or me.

Thank you.