Financial Situation and Action Plan

Financial Situation and Action Plan

Where We Are Today

There are significant structural budget deficits and real challenges that must be addressed. Fixing these challenges will require timely, strategic and sometimes difficult decisions. We will address these challenges head on, implement effective solutions and keep our University on an upward trajectory.

This is a widespread issue. According to our latest budget review, 61 of the 81 (or 75%) reporting units within the University forecast continued deficit spending.  

The vast majority of the deficit is due to increased spending to enhance and improve our student experience and to strengthen our faculty and staff. This includes millions spent on student merit aid, compensation to retain and attract world-class faculty and staff, and critical strategic investments.

Learn more about the background of the University of Arizona financial situation, including external and internal factors.

Financial Action Plan

Without further action, we would face a projected budget shortfall of $162 million this year. Our budget shortfall would only get worse year-after-year if we took no immediate action to course-correct the overspending trend. We are not going to allow that to happen.

In December, we announced immediate actions to slow spending and to help change the budget trajectory. These actions included the implementation of a hiring and compensation freeze, strict procurement guardrails and travel restrictions. Even with those measures, the latest information provided by college and division leaders indicates that we remain on a path of overspending, further depleting our cash reserves.

Longer-term solutions will be necessary over the next 18 months to implement ongoing cost-reduction measures and structural changes that address budget decision-making frameworks and accountability controls, and create operational efficiencies.

Based on input and feedback from faculty, student, staff and administrative leaders across campus, the University submitted its financial action plan to the Arizona Board of Regents on Dec. 13, 2023.

Action Plan Overview

What We Are Doing:

Actions Already Implemented
  • Implementing hiring and compensation freeze.
  • Freezing international travel for senior administrators.
  • Restricting purchasing.
  • Deferring nonessential capital projects.
  • Concluding strategic initiatives funding.
Actions Over the Next 18 Months
  • Implementing FY 2025 base budget reductions with focus on units spending in deficit, overhead and administrative functions.
  • Delaying FY 2025 Salary Increase Program.
  • Conducting individual reviews of all budget units; ensure ongoing financial accountability.
  • Rebalancing undergraduate non-resident merit aid for new students.
  • Eliminating tuition guarantee in fall 2025 for new students.
  • Eliminating Activity Informed Budgeting (AIB) model; implement centralized planning budget model.
  • Reorganizing administrative services in: Information Technology, Human Resources, Marketing & Communications, Business & Finance, Facilities Management and University Advancement (fundraising).

What We Are Not Doing:

  • Reducing need-based aid for Arizona resident students.
  • Reducing need and merit-based aid for any current students or those admitted for fall 2024 throughout their time at the University of Arizona.
  • Eliminating tuition guarantees for any current undergraduate students first enrolled prior to fall 2025.
  • Instituting furloughs.
  • Reducing retirement benefits.
  • Jeopardizing our teaching and research mission.