Executive Budget Committee revises guidance on budget

The Executive Budget Committee met Friday, Jan. 21, to recalibrate our approach to the budget following the State of the State address delivered by Governor Jay Nixon last Wednesday (Jan. 19). We are thankful that the governor reaffirmed his commitment to, and support of, higher education. I now want to provide our revised guidance on the budget process for fiscal year 2012 based on the governor’s recommendation of a 7 percent reduction of state appropriations for Missouri State University.

Students in the snowBudget target

The proposed reduction of 7 percent of state appropriations is significantly less than the “worst case scenario” for which we had begun planning. This reduction will result in a net cut of $5,410,787 for the Springfield campus and $375,726 for the West Plains campus. With the defense and strategic studies reduction of $6,372, the total is $5,792,885. Accordingly, the Executive Budget Committee proposes the following revised approach.

  • We propose a modest tuition increase. The Executive Budget Committee and the administration are committed to keeping the cost of tuition affordable. We therefore propose a tuition increase linked to the increase in Consumer Price Index (CPI). For the past two years this has been approximately 4 percent. We do not intend to request a waiver for a tuition increase above the CPI. Assuming that enrollment remains at current levels this fee increase will generate approximately $2.8 million to $3 million.
  • The Executive Budget Committee recommends the remainder of the budget reduction be covered with a portion of reserve funds generated by the conservative approach of the administration during the past several years. This is expected to be approximately $2.8 million to $3 million in line with our previous proposal.

This combination of reserves and the modest tuition increase will cover the 7 percent reduction in state appropriations for Fiscal Year 2012 without need for budget cuts from the colleges. Accordingly, the charges for the Administrative and Academic Budget Committees will be redirected with new goals. With respect to administrative areas, the goal is to continue to improve efficiency and generate cost savings where possible. With respect to academics, the goal is to strategically reallocate savings already identified, along with another portion of the reserves, to specific programs and initiatives as determined by the respective budget committees.

Charge to the Administrative Budget Committee

The Executive Budget Committee will ask the Administrative Budget Committee to continue its work to find more efficient ways to operate the University. We are confident that the committee will identify ways in which the University can maintain essential services while reducing costs. We expect that recommendations from this committee also will be consistent with the new strategic plan and guiding principles.

Student working on a computerCharge to collegiate budget committees

In anticipation of possible cuts, the college budget committees have worked many hours to understand revenue and expenses, and look closely at college activities. It is now clear these efforts must be re-directed. So, instead of cutting budgets, we now have the opportunity to use this level of understanding to identify, and selectively invest in, those academic programs that make each college and the University distinctive. The Executive Budget Committee believes we must seize this opportunity and commit to Decisions for Distinctiveness.

We are asking the college budget committees to complete three tasks:

  1. Identify the programs/activities that will make the college distinctive. Ideally the areas identified should emphasize student success and learning, faculty excellence and interdisciplinary collaboration. These initiatives should be consistent with the new strategic plan of the University. Note that it is reasonable to expect more than one potential initiative from each College.
  2. Using the budget discussions that have taken place within the colleges as a starting point, determine the funding necessary to achieve distinctiveness in the areas identified above.
  3. Recommend how best to reallocate up to 2 percent of the existing college budget to fund the distinctive areas identified. Dr. Cofer intends to make some one-time matching money available to help “jump start” the best initiatives recommended by the college committees.

Each college will then forward proposals outlining these initiatives to the Academic Budget Committee. The Academic Budget Committee will evaluate the proposals and forward the selected proposals to the Executive Budget Committee. Given this change in emphasis of the committees the previous timelines are no longer relevant. We do, however, encourage the college committees to forward their ideas to the Academic Affairs Committee by mid-April.

Students in the audiology labGuiding principles

Some of the original guiding principles have changed, but many remain:

  • No one-time savings should be used for the college reallocation – only on-going funds should be used to address these initiatives.
  • Budgetary decisions should be consistent with the mission and strategic plan of the University, with a primary focus on student learning.
  • The University should make budget decisions that will not reduce student access to core courses during fall, spring and summer semesters – given the importance of student fees, it is clear that any reduction in student credit hours would negatively impact the budget.
  • Maintaining accreditation of current programs should be a high priority.
  • Both the college committees and the Administrative Budget Committee may address the budget reallocation/reduction with an appropriate combination of cost saving measures and substantiated plans for increased revenues to the cost center.
  • The overall goal of the budget decisions should be to help Missouri State University emerge as a stronger, distinctive, and more focused university poised for the future

Business students in a classroomPlan for compensation

Improving compensation for faculty and staff is a key goal of the Executive Budget Committee and the administration. In this regard, the Executive Budget Committee hopes to identify a modest pool of money for fiscal year 2012 that will be used to address both faculty and staff equity and market adjustments. An across-the-board salary increase is not proposed for fiscal year 2012. The Executive Budget Committee hopes to position the University so that it can provide across-the-board and performance-based salary increases to faculty and staff in fiscal year 2013. All involved are committed to making these increases as significant as possible.

On behalf of the Executive Budget Committee, I hope you find this report helpful. Clearly, the landscape has improved. We have an incredible opportunity to build on the conversations/discussions that have begun in the budget committees. It is up to us to be innovative, strategic, and intentional as we move forward to make Decisions for Distinctiveness.

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