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Dear Members of the UW Community:

Many of you I know have followed the news this fall about the continuing slump in state tax revenues, the projected resulting budget deficit and the need for the Legislature and the Governor to adjust the current biennial budget in a special session due to convene November 28.

I know this all sounds very familiar and many of you may be asking, but haven't we been through this already?

The fact of the matter is that the economic recovery in our state is still grudgingly slow, and our tax revenues are reflecting this stasis.

The politics of how to address the projected revenue shortfall are difficult. Portions of the state budget-like K-12 education, social services and corrections-are in part protected from reductions.

The so-called discretionary spending part of the state budget therefore takes disproportionately larger reductions in attempting to balance the state budget.

The University of Washington has seen its state general fund appropriation halved over the past three years, from about $400 million a year to $200 million.

It appears as if that slide is not over.

The Legislature and the Governor have a daunting task ahead of them in trying to balance the budget for the remainder of this biennium.

Whether they do so solely through more budget reductions or through some combination of reductions and additional revenues is the major question with which they will be wrestling over the coming months.

This week, this debate in our state will commence.

The Governor will release a list of possible spending cuts to address a $2 billion funding shortfall.

This will mark the starting point of what many expect to be a lengthy-and contentious-supplemental budget process.

The numbers that come out for higher education and the University of Washington will look draconian, and we hope, needless to say, not where the final budget ends up.

We are watching this process closely and are in regular communication with the Governor's office and legislative leadership.

While we may end up some months down the road with further budget reductions, we hope they will be mitigated by other factors, such as greater management freedom and flexibility through which we believe we could save money and operate more effectively.

We have a long way to go in this process, and there may be alarming news along the way about what some of the proposals that emerge may mean for the University and the State.

My hope is that you will follow the process, understand its political nature and understand that we will be working very hard over the coming months to minimize negative effects upon the University.

I will keep you informed as significant events unfold during this process.

Sincerely, Michael K. Young

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