The U.S. economy is sick, and Ohio State’s finances are running a slight temperature.

A financial report issued by Ohio State’s Office of Business and Finance on Oct. 29 details the problems caused by the economic downturn. The short-term impact of the economic crisis on Ohio State has been “noticeable, but manageable,” according to the report.

The report will be reviewed at today’s meeting of the Board of Trustees’ Fiscal Affairs Committee.

The biggest challenge facing Ohio State’s revenues comes from a decline in state support, according to the report. State budget reductions will result in at least $6.1 million in cuts to Ohio State campuses, a problem further compounded by the ongoing in-state tuition freeze.

Ohio Gov. Ted Strickland, faced with a growing budget deficit, implemented a 4.75 percent cut in most state appropriations in September. Although Strickland largely sheltered Ohio State from the cuts to preserve the resident undergraduate tuition freeze, some cuts will still affect Ohio State, according to the financial report.

Almost half of the $6.1 million in cuts that will be reflected on Ohio State campuses will be related to agriculture, according to the report. The university has an annual operating budget of about $4 billion, according to an Ohio State news release. University financial officials were not available to discuss the cuts Wednesday.

The university will have a harder time making up for this lost revenue because of the tuition freeze, although OSU is less dependent on state support than in decades past, according to the report. OSU President E. Gordon Gee and Vice President for Government Affairs Curt Steiner have begun discussions with state leaders to address this hardship, said Senior Vice President of Business and Finance William Shkurti in an e-mail.

The sour economy might have additional implications for Ohio State’s revenues. Although enrollments have increased projections, presenting the possibility for additional tuition revenue, declining home values and pressure from other aspects of the struggling economy might affect the ability of families to pay, according to the report.

During the Asian financial crisis of the 1990s, OSU sought additional sources of aid, according to the report. This was very successful, but any additional aid that OSU might target to deal with the financial crisis has not yet been determined, said.

Ohio State’s long-term investment portfolio also lost more than 8 percent of its value in the 2008 fiscal year and 12 percent in the first quarter of fiscal year 2009. October was the worst month for the stock market in recent memory, according to the report. The bear market also caused the university to fall short in several of its financial performance goals in the 2008 fiscal year, Shkurti said.

Ohio State’s long-term investment pool, valued at about $2.2 billion, ranked 308th among all U.S. institutions and 27th among public institutions in assets per full-time students, in a 2007 study.

The university hired Jonathan Hook as its first chief investment officer in June to manage the university’s long-term investment pool beginning in August, according to the news release. Hook was not available for comment.

The university’s finances also stumbled when a fund containing $57 million of Ohio State’s short-term portfolio was frozen by its trustee, Wachovia. The funds will be liquidated and recouped over the next 12 months, according to the report. This should have no noticeable impact on operations in the near future, however, because the total short-term portfolio of $850 million provides enough money to meet Ohio State’s financial needs until the money is returned, Shkurti said.

The economic slowdown could also present other challenges for the financial health of Ohio State’s self-supporting auxiliaries, according to the report. Patients losing insurance coverage could increase the burden on the health system, the Blackwell could lose conference business and Ohio State’s athletics could see a reduction in corporate sponsorships, according to the report.

Dan McKeever can be reached at [email protected].