Guidelines for preparing the FY13 internal operating budget

Overarching goals

As the budget recommendations for fiscal year 2013, the four overarching goals for all committees, and ultimately the Executive Budget Committee, are:

  • Create a pool of resources to fund an across-the-board salary increase for faculty and staff.
  • Determine criteria for allocating one-time funding.
  • Develop a strategy for funding new initiatives.
  • Begin to develop plans that will incentivize and reward colleges and other units to increase enrollments and revenues, without compromising academic quality, with such plans to be implemented in the fiscal year 2014 budget.

Fiscal year 2013 budget assumptions

Lecture hallState appropriations — reduction of 5 percent ($3,583,667)

It is likely this is a worst case scenario, but we believe it prudent to plan for this level of reduction. We will know more in January and can adjust at that time if appropriate.

Enrollment — same as fall 2010

The Executive Budget Committee endorsed a more aggressive approach to enrollment. In short, estimating flat enrollment from the actual for fiscal year 2011 (fall 2010) and budgeted for fiscal year 2012 means we must recapture the 147 students we lost on the Springfield Campus in current fiscal year 2012 (fall 2011) to meet this projection. (Remember, the West Plains Campus has a parallel but separate budget process, and that campus will be working to recapture the 87 students it lost this year.) So, in total, it means moving from the current 22,866 back to 23,092.

Tuition increase — increase by 3.6 per cent ($3,348,558)

Absent a waiver, state law limits the tuition increase to the Consumer Price Index (CPI) from December to December. We estimate that CPI will be 3.6 per cent. We will have official notification of CPI in January and will finalize then. We do not intend to request a waiver to exceed CPI.

Other expenses — reallocate to fund more than $3.7 million of increases

We must reallocate for other increases, including a mid-year salary increase ($2,362,899), MOSERS increase ($522,290), University contribution to medical insurance (estimated at $907,710 based on current claims rate) plus utility increases and other fixed expense increases yet to be determined.

Elements of the budget plan for fiscal year 2013

Students on campus walkingProvided the above assumptions are accurate in total, we will implement the following plan:

Current fiscal year (FY12)

  • Based on proposals from the college deans, Interim Provost Einhellig and President Smart will strategically invest some one-time funds into academic programs to boost capacity, especially in health fields.
  • The first six months of the mid-year raise will be funded centrally.

Next fiscal year (FY13)

Pending input from the Board of Governors, and ultimately formal approval by the Board

  • Over the next 18 months, the plan is to increase faculty and staff salaries from a pool that equates to about a 4 percent overall increase. Here is how:
    • Cost centers will be expected to reallocate their pro rata share of $3.7 million. This includes the ongoing cost of the mid-year raise (approximately $2.3 million), plus an additional $1.4 million to help fund anticipated increased expenses – cost center heads may use one-time funds for up to one-third (33.3 percent) of the reallocation for up to three years, provided the plan meets reserve targets and is approved in advance by the CFO.
    • Beginning July 1, 2012, an additional 2 percent across-the-board raise will be implemented and funded through reallocations centrally and in selected university-wide budget categories. This funding for the salaries will be distributed into the cost center budgets. (Again, this proposed salary increase, as well as other elements of this plan, are dependent on meeting the overall assumptions on the front page, especially limiting the state appropriations reduction to 5 percent.)
    • Should the reduction in state appropriations be less than the 5 percent assumed in the budget model, the balance will be returned to the cost centers on a pro rata basis.
  • Every effort will be made to fund a 2 percent increase for graduate assistants; this increase will be funded centrally.
  • From their one-time fund balances, cost centers would increase the rates for all per-course faculty by at least $15 per credit hour.
  • A strategic investment package of $1 million in one-time funds will be available from University Reserves — proposals will be generated and all will be discussed and prioritized by either the Academic Affairs Budget Committee or the Administrative Budget Committee, then forwarded as priority proposals to the Executive Budget Committee. The Executive Budget Committee will discuss the proposals prior to the president making the final recommendation. In cases where the one-time funds are proposed as “start-up” funds for recurring expenses, a plan for sustaining the funding must accompany the proposal. A specific timeline for submitting proposals will be developed, but the deadline is likely to be mid-February.
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