STORRS – In the face of a deepening financial crisis, University of Connecticut trustees adopted a budget Thursday that seeks to promote austerity while preserving quality – an increasingly difficult challenge.

Officials warned of even more ominous times ahead as trustees approved a $1.03 billion budget for the fiscal year beginning July 1. The budget, the first to top the $1 billion mark, is 4.8 percent larger than this year’s budget for UConn’s main campus at Storrs and regional campuses.

“We have to continue to plan for dramatic cuts in state support,” UConn’s Chief Financial Officer Richard Gray told trustees as the university confronts a fiscal crisis that has delayed some campus construction projects and prompted cuts in everything from printing costs to travel expenses.

The nation’s economic slump has hit colleges hard, and UConn is no exception. Thirty-six states cut higher education funding by more than $2.3 billion this year, according to a survey released last week by the National Governors Association and the National Association of State Budget Officers. The survey projects continuing budget strains in 2012 and possibly beyond.

At UConn, state support has remained stagnant since 2008 and accounts for a diminishing proportion of the university’s overall budget – about 32 percent in the coming year – while the university relies increasingly on student tuition to fill the gap.

Tuition, fees and room and board for in-state undergraduates will reach $20,968 this fall, an increase of $1,180 or nearly 6 percent.

Among the additional costs in the new budget are increases for labor contracts and for additional professors. The university has budgeted for about 15 new tenured or tenure-track professors as part of a long-term plan to bolster UConn’s research capacity and begin reducing class sizes that have grown beyond recommended limits.

Gray warned that the budget for the following year could be even more difficult. Deficits could reach the $50 million mark if state support declines, he said. State funding has held steady because of a requirement that states accepting federal stimulus funds must maintain existing levels of education funding, but that requirement expires after this year.

“The state’s economic picture, from everything I’ve seen, is not getting any better,” Gray said.

As part of the effort to reduce the state’s overall budget deficit this year, UConn will be required to transfer $15 million to the state’s general fund – another squeeze on an already tight budget. “The state,” said board member Denis Nayden, “is taking money from parents and students paying tuition.”

The budget includes a variety of efforts to cut expenses, including unpaid furlough days for employees, limits on travel expenses, and projected energy-saving steps such as turning off lights. “The culture has changed,” said Barry Feldman, UConn’s chief operating officer. “People are very mindful of doing big and little things to reduce the cost.”

The economic slump not only has squeezed the university, it has been hard on students, too. Among programs that are preserved in the new budget is a fund that has been set aside to assist juniors and seniors facing financial emergencies that put them in danger of dropping out. The fund kept dozens of students in school this year, officials said.

“If students have emergency financial difficulty, I have no problem delaying [other] projects. . . . The economy is fractured,” Board of Trustees Chairman Lawrence McHugh said.

McHugh said support for the state’s flagship university is crucial. He called for efforts to keep UConn “strong and vibrant because that’s the fuel that’s going to move our economy forward. . . . Brainpower is the most important thing we can do here.”

The trustees also approved a $787.3 budget for the UConn Health Center. That is a 4.8 percent increase over the current budget and must also be approved by the Health Center’s Board of Directors next week.

Among those at Thursday’s meeting was UConn’s interim president Philip Austin, named recently to replace Michael Hogan, who is leaving to become president of the University of Illinois. “It’s a tough budget year, but keep your heads up,” Austin told the board. “We’ll get through this.”

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