Top University officials are concerned about the financial future of the University, they said at the Audit, Budget, Finance and Facilities Committee meeting Wednesday. The committee passed the proposed Fiscal Year 2014 operating budget on to the full Board of Trustees, which will meet next Thursday.

The proposed operating budget for FY14 totals $4.45 billion, an increase of $52.3 million, or 1.2 percent, over FY13.

Vice President for Academic Affairs Christophe Pierre said the University is currently in a strong financial position, citing the University’s stable fiscal condition, a high number of quality students enrolling and University employees receiving notable raises.

“There are some significant concerns,” Pierre said. “These are not new, but we are going to face them in the years to come.”

The concerns that Pierre listed are a downward trend in state funding, tuition constraints, statewide pension troubles and a decrease in the amount of federal research funding the University has received.

“We rely more and more on tuition,” Pierre said. “We have increased tuition significantly, and I think we are running out of room to do so.”

Tuition accounts for $1.064 billion, or 23.9 percent, of the University’s overall revenue, and the $52.2 million increase in tuition revenue paid for all but $100,000 of the budget’s increase in FY14.

With state appropriations below FY1997 levels and, adjusted for inflation, below 1966 levels, and without much room for a tuition increase, Pierre said the University may need to focus its efforts on the reallocation of funds.

Trustee Timothy Koritz said he agreed.

“Down the road, the biggest thing we need to decide is what we’re good at and what we’re not good at, and maybe have our activities center on our excellence in the academic realm,” he said. “It’s just going to become more and more difficult to be able to do the scope of what we do right now, unfortunately. It’s probably not the most popular thing to say, but it’s what strikes me as the biggest take-home message here.”

Pierre responded to Koritz about the difficulty of deciding where to cut and which programs to keep.

“It is a delicate balancing act between the need to preserve and increase academic excellence and the need to invest in departments and industries that are generators of our revenue,” he said.

“Clearly, at some point, decisions have to be made.”

Committee chair Ed McMillan said it’s beneficial for the University to have an eye on its future.

“Getting a head start on this kind of issue now will save us a great deal of time and anguish in years to come,” he said.

University comptroller Walter Knorr said the relationship with the state has hurt the University financially.

He said the state ended FY13 with $6 billion in unpaid bills, in addition to even more Medicaid costs.

The state was downgraded by Moody’s Investors Service on Aug. 6, and the University was downgraded three days later. Knorr said anyone who read the document could tell the downgrade was “totally on the state for the budget, financial and pension situation.”

The committee discussed the budget, administrative appointments for the academic year and a $78.7 million one-time request from the state for FY15, as well as $35.9 million in purchase recommendations.

Johnathan can be reached at [email protected] and @jhett93.