20% November 20, 2008Posted by gordonwatts in university.
Today the stock market went down 5%. Ok, that is depressingly normal. But this has real effects. Unlike some others, I’ve been fortunate not to see a direct effect (i.e. lost a job, etc.). But this is going to hit home directly in two ways.
The state of Washington has released its latest set of budget numbers – the projected budget gap has gone from 3.2 billion to 5 billion for the next two year state budget cycle in less than 4 months. The state government is now looking to slash about 20% from everyone’s budget.
This will be painful. While the university’s load on the state budget is only 400 million (compared to a 1.2 billion dollar annual operating budget), all of the salaries come from than 400 million. The most immediate effect will be: it will be very difficult to hire anyone new as the University attempts to save money by attrition. On the flip side, of course, everyone’s retirement benefits have got straight into the toilet, which may make people put off retirement!
The second way, of course, will be federal funding. Given the current climate I can’t see any possibility that number will go up. Perhaps Obama’s statement that he will ignore a balanced budget for two years will keep it safe from immediate harsh cuts, but…