The board of National Public Radio voted yesterday to tighten its already stringent fiscal 1985 budget of $22 million to make up for $686,000 in unexpected losses and new expenses. At the same meeting the board announced an ambitious five-year plan that would fundamentally alter the funding system in public radio and hopefully give the network financial stability.
The budget amendment was described by NPR board chairman Donald Mullally as a routine business adjustment and not an alarming development as were the financial disorders that led the network to a $7.4 million deficit and near bankruptcy in fiscal 1983. This adjustment, according to the board, was prompted by a loss of $331,000 in anticipated revenue from the Corporation for Public Broadcasting, a loss of $232,000 involved with the cancellation of NPR Plus, a 24-hour music service, and an increase in distribution costs of $125,000.
CPB, which is the federally funded private corporation that distributes federal funds for public broadcasting, gave NPR $10.3 million instead of an anticipated $10.6 million. Once the NPR Plus service was cancelled, NPR lost its bulk-rate discount on the public radio satellite and had to absorb the $125,000 in distribution costs.
The reductions in expenses, according to NPR president Douglas Bennet, would affect every department. The programming division, which produces the award-winning news shows "Morning Edition" and "All Things Considered," would be hardest hit, with a $211,000 trim. Next in belt-tightening would be the engineering division, at $195,000. Speaking of the already strapped programming division, Bennet said, "That is 2 percent of their annual budget. There will be constraints on travel and other discretionary items. I am very concerned about doing it. Our budgets are stretched to the limit."
In contrast, NPR officials enthusiastically presented their new business plan, calling it the second phase of the restoration of the "financial and managerial integrity" of NPR. The board proposed that, starting in fiscal 1987, all federal radio funds be sent directly to the stations. Then the stations would directly support the network through a system of dues based on a fixed percentage of their revenues. The network estimated yesterday that the annual fee for stations in fiscal 1987 would be 9 to 10 percent of its federal funds and non-federal revenues.
"We must establish a predictable system, one in which both stations and NPR know well in advance what funding will be available," said Mullally. Stressing the need for stability and unity within the public radio system, Mullally also said the "unpredictable" reductions from CPB, as well as other financial uncertainities, pushed the network to this strong membership-support plan.
In the current arrangement NPR is financed by federal appropriations, which provide half its budget, foundation grants, $1.5 million in membership fees from the stations and some individual contributions. Bennet reported yesterday that the network is $421,000 ahead of where it was this time last year in grants and underwriting.
In 1987 the $7 million loan from CPB that enabled NPR to survive its budget crisis in 1983 would be paid, and the federal appropriation for public radio is scheduled to increase. "If the present appropriations hold, the stations would receive $18 million in community service grants and the total cost of services would be $15 million," said Bennet.
The plan must be worked out with CPB, and Mullally reported that he talked to CPB board chairman Sonia Landau yesterday and that she was "positive." The 251 member stations are expected to vote on the proposal at their annual conference in May.