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Portera: UA System Faces $130 Million Cut

By Associated Press

Huntsville, AL – University of Alabama System Chancellor Malcolm Portera said the system faces a $130 million cut in state appropriations for the 2009-2010 school year.

Portera informed the UA System Board of Trustees of the outlook Friday at its meeting in Huntsville.

Overall, Portera said the system likely will see its state funding reduced by nearly a quarter compared with a year ago. That includes an 11.5 percent cut instituted last June, a more recent 9 percent cut due to proration, and an expected 3 percent drop for next year.

The system expects to receive between $40 million and $44 million in federal stimulus money in each of the next two years. But Portera said soaring costs of health care and retirement for employees pose another challenge and probably will leave the overall budget hit at about $110 million.

This year's state appropriations totaled about $498 million and made up about 15 percent of the budget for the system's three campuses in Tuscaloosa, Birmingham and Huntsville.

The full system budget was $4.3 billion this year, including the UAB Health System, according to system spokeswoman Kellee Reinhart.

The answer to the shortfall likely will be a combination of staff cuts, tuition increases and other measures. Portera said he expects to have a comprehensive plan for all three campuses in June.

Last month, Portera said the budget crunch could result in the loss of about 700 jobs systemwide, on top of about 300 job cuts last year.

On Friday, he said much of the focus will be on raising revenue, possibly in the form of tuition hikes or increases in federal and private money coming into the system.

Meanwhile, board members blasted the Alabama Legislature's suggestion that public universities freeze tuition for students involved in the troubled Prepaid Affordable College Tuition, or PACT, program.

Board Chairman Finis St. John IV called the proposal "a dangerous precedent," because it would limit the schools' ability to set their own tuition and would set up a two-tiered payment system.

"We will work in every way possible to find a solution, but they cannot now cut off the ability of this board to deal with financial crisis in the system," said board member Joe Espy.

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