June 2008

FSU FUNDING CUTS TO TAKE A TOLL ON LOCAL, STATE ECONOMIES

Local and state economies will feel the pain as Florida State University implements budget cuts forced by a $31-million loss in state funding, warns FSU President T.K. Wetherell.

The university is dealing with several recent rounds of state funding cuts by eliminating more than 250 positions, limiting enrollment by 2,000 students, cutting back student services, and deferring campus maintenance and selected programs, FSU’s Board of Trustees voted on Friday, June 13. And those painful cuts will reverberate well beyond the classroom, Wetherell said.

“Whenever faculty positions are cut, for example, one result is that new faculty members don’t move to town, don’t buy houses, don’t spend their money in the community and don’t bring new jobs and revenues to Florida through research contracts and grants,” Wetherell said. “The loss of these jobs will have a devastating impact on local tax rolls and the local economy.”

Each FSU faculty position cut means the loss of an average salary of $72,500, and each staff position the loss of an average salary of $32,400. Faculty and staff positions made up approximately 47 percent of the internal reductions FSU had to make.

“Our economists tell us that jobs directly and indirectly related to FSU total nearly 21 percent of employment in the Tallahassee area,” Wetherell said. “We generate 44,000 jobs statewide. Based on student spending, the university budget and visitors’ spending at FSU, our economic impact on the state economy is estimated at $3.6 billion.”

The loss of some 2,000 potential students to enrollment limits will have a particularly acute effect on the local economy over the coming year, Wetherell said.

“That’s 2,000 students who won’t be buying laptops from local computer stores; 2,000 students who won’t be renting apartments; 2,000 students who won’t be eating in Tallahassee restaurants or shopping in our malls,” he said. “And then there are the parents, grandparents, siblings and friends of those 2,000 students who won’t be coming to Tallahassee to visit them and spend their own money in the community. About 900,000 visitors come to FSU each year, and they spend more than $250 million. As you can see, state funding cuts at FSU will have strong repercussions off campus as well.”

The cuts announced by the Board of Trustees and the impact of the adjustments, along with continued revenue shortfalls to the university, could represent as much as a $100-million loss to the local economy for the 2008-09 academic year, Wetherell said.

“A revenue crisis that reduces jobs, local purchasing and student enrollment can be expected to have a significant impact on the region’s economy,” he said. “State universities can be a tremendous engine for generating economic growth, but they must be funded adequately in order for that to occur. Otherwise, in a difficult economy, we all suffer.”

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