Trends in the University of Massachusetts’ general budget fund and the impact of the Capital Plan was discussed in great detail by Joyce Hatch, Vice Chancellor for Administration and Finance, on Thursday at the 640 Regular Meeting of the Faculty Senate.

Hatch began her presentation by delivering “good news” concerning the University’s current budget situation.

“This year we are very stable. That still may not make a lot of people happy since we still have many things that are under funded, but the freefall of budget cuts over the last three years has stopped,” she said.

In 2004 alone, Hatch said the budget cuts amounted to over $36 million. The strategy that was used to address this deficit was to increase student fees as well as receive bargaining increases.

One question that Hatch said she is frequently asked regards where all the money that has been raised through higher student fees is going and why it isn’t enough to cover the budget cuts.

“Student fees definitely helped to offset the budget cut. So why wasn’t that enough to solve the problem?” Hatch asked.

Although student fees have gone up by 40 percent during the last two years, she said that cost increases such as salaries to any non-unit members of the faculty as well as the utility budget also increase every year.

Financial aid and curriculum fees must also be considered, according to Hatch.

“Since student fees went up by 40 percent, the cost of financial aid must also go up to cover the difference,” she said. “And the increase of fee waivers for all the graduate students does go up also.”

Hatch also noted that payment for some debt that was borrowed years ago for infrastructure was now kicking in, accumulating to $9.9 million.

“The point is that with the loss of state funds and cost increases of 38 million, we balanced the budget with student fees and the campus budget,” Hatch said, summing up the past two years.

Looking ahead, Hatch addressed the issue of student fees by saying that she is committed to keeping increases down to three percent for the next few years.

Also discussed was the future of utility costs at the university. She said that $42 million has been invested in order to conserve energy on campus.

“We will be converting from coal primarily to gas, but oil as a backup,” Hatch said. “The good news is that it will be more efficient and cleaner – the bad news is that by dropping coal, which is the cheapest form of energy, the cost increase would normally be about 3 million … but we are able to offset that with some of the energy savings and other things we are doing.”

Hatch continued her presentation by discussing the current budget for the Capital Plan.

“This year we are putting in an additional 5.4 million into the Capital Plan out of our operating budget,” she said. “Next year it will go up by about 3 million, the next year 4 [million] and so on. This is in addition to the 30 million that is already in our operating budget, which will go towards remodeling and other major projects.”

Hatch said that the Capital Plan’s budget amounts to about $544 million over a five-year period. She added that a state contribution of only 11 percent is expected.

“The majority of the money (about 87 percent) will be funded through UMass Building Authority borrowing, campus borrowing for the energy project, or the campus revolving pool,” Hatch announced.

According to her, new building construction costs will amount to about $200 million, since only 34 percent of the buildings on campus are reported to by in “good” condition.

“After spending only half a million dollars, that statistic goes up to 40 percent,” Hatch said. “But we have a long way to go before we can really fix the campus.”