In this issue of Clif’s Notes, I provide an update on the state appropriation and how it affects our budget for fiscal year 2015, an update on the 2014 session of the Missouri General Assembly, the planned reorganization in my office and a preview of my upcoming trip to China.

Budget update

The Missouri General Assembly completed its work on the fiscal year 2015 budget by the constitutional deadline of May 9 (one week before the session concludes). Therefore, we have begun the process of developing our detailed internal operating budget for next year.

The first step was discussing the plan with the Executive Budget Committee, which we did on May 9, where we received unanimous approval. We briefed the Board of Governors at its May 15 meeting and received the Board’s endorsement. The last step is to formally present the final budget recommendation to the Board for its approval at the June meeting.

I wanted to use this opportunity to summarize our budget plan for fiscal year 2015.

5.2 percent increase

The overall increase for higher education was 5 percent. Since the increase was based on performance and since we achieved all five of our measures on both the Springfield and West Plains campuses, the Missouri State increase was slightly higher than the average – 5.2 percent. That amounts to an increase of $4,053,477 for the system – $3,875,879 for Springfield and $177,598 for West Plains. Since the Missouri General Assembly achieved the 5 percent goal, we will be able to keep in-state undergraduate tuition flat for 2014-15 as we had planned.

Chancellor Drew Bennett is working through the West Plains process to allocate the increase there.

For the Springfield campus, I wanted to provide a summary of budget recommendation for fiscal year 2015.

Total revenue increase

With a combination of increases and decreases, we are projecting a net increase in revenue of $4,956,145. The three main sources of increases are as follows:

•  $4,053,477 – 5.2 percent increase in state appropriations (less the standard 3 percent holdback)
• $466,068 — new tuition from modest increases (less than the 2013 rate of inflation) in undergraduate out-of-state and graduate tuition
• $971,102 – enrollment growth experienced in Fiscal Year 2014 continued in Fiscal Year 2015

There are anticipated decreases of revenue in several categories, totaling $596,800, for the net increase of $4,893,847.

Compensation

Of the total $4,893,847 increase, about 60 percent will be allocated to compensation:

• $600,000 — on-going funding for new faculty positions approved last fall — the funding for these positions was originally made possible by income from enrollment growth, proving once again that enrollment does matter when it comes to the budget
• $1,251,944 — 1.5 percent across-the-board salary increase for full-time faculty and staff who were on the payroll as of April 1, 2014
• $433,182 — fringe benefits on the 1.5 percent salary increase
• $97,797 — $480 increases for all staff members who are below $30,000 and have a salary less than 90 percent of the mid-point of their range.  In addition, salary ranges will be increased by 1.2 percent effective July 1.
• $33,838 — fringe benefits on the staff salary increase
• $53,045 — 1.5 percent increase in graduate assistant wages
• $310,926 — faculty promotions, including fringe benefits
• $201,900 — $5,000 salary increases with fringe benefits for 30 recipients of the new Full Professor Program — Provost Frank Einhellig sent letters to the 30 recipients late Thursday afternoon, May 15

Priority increases

In addition to compensation, we have identified these priority increases to be paid from the increased revenue:

• $338,386 — restoration to the cost centers of 1.5 percent of the supplies and services portion of the operating budgets
• $75,000 — faculty international travel – This was a specific request from the faculty members of the Executive Budget Committee.  The Provost has established a faculty committee to develop guidelines for administration of this new fund
• $250,000 — increased maintenance, security and grounds
• $250,000 — funding a women’s tennis program to comply with Title IX

Increases in expenses

We also are funding $937,752 in items such as increased utility costs, increased services provided by the Disability Support Center (for interpretation services for students with disabilities), increased property insurance and increased fee waivers for employees and their dependents.

Summary

I am extremely pleased and appreciative of Governor Jay Nixon recommending and the Missouri General Assembly approving the 5 percent increase in funding for higher education. I also am very pleased that we are able to allocate a significant portion of the new funds to our number one priority: compensation for our faculty and staff.

As always, the entire budget will be posted on the Financial Services website once it has been approved by the Board of Governors in June.

Capital funding

The General Assembly passed and sent to the governor a bill that would provide “50-50 matching funds” for the Welcome Center, which will focus on student admissions and success. The total cost of the project is estimated at $5.5 million. Of that total, $1 million will be covered by the Bookstore insurance settlement. Of the remaining $4.5 million, half — $2.25 million — will come from state appropriations and then be matched by $2.25 million in reserve gift funds from the Missouri State Foundation. The Welcome Center has been designed and bids have been submitted. Construction is scheduled to begin later this summer and be completed in fall 2015.

With a few hours left in the session — it ends at 6 p.m. Friday — we were still hopeful there might be funding for additional capital projects. As this issue of Clif’s Notes was being distributed, however, there were still significant differences between the House and Senate versions of remaining capital bills. If something changes, I will get a note out about that.

Other legislation

There are some other operating budget highlights as well:

• The line item of $1,325,000 for the Occupational Therapy Program in Springfield and health program enhancement at West Plains remains in the budget.
• The $2 million line item for the cooperative Doctor of Pharmacy degree program with UMKC remains — and the first class in that program begins this fall. A large majority of the 31 students admitted into the first class have done their prior work at Missouri State.
• Funding increased for both Bright Flight (merit based) and Access Missouri (need based) scholarship programs.
• There is $750,000 in the budget to support three summer academies, including the Missouri Fine Arts Academy at Missouri State. The exact amount that will be allocated to each of the academies, including the Fine Arts Academy, had not been finalized in time for this communication.
• There is $980,000 in the budget to support public television in Missouri, including Ozarks Public Television housed at Missouri State.

The higher education funding formula bill, Senate Bill 492 which Missouri State and the other four-year universities supported, passed. It provides a framework for how higher education will be funded in the future, with the final authority continuing to rest with the General Assembly. The bill calls for no more than 90 percent of new funding to be based on performance measures, with at least 10 percent based on equity criteria. The bill also calls for the performance measures to be revised and updated to include the success of graduates, both in the job market and as graduate-degree seeking students.

These bills also are on Governor Nixon’s desk for approval.

Reorganization planned in president’s office

With Paul Kincaid’s upcoming retirement and Penni Groves’ request to go back to part-time, I plan to reorganize the president’s office staffing effective with the new fiscal year, July 1.

Paul’s current responsibilities as chief of staff and assistant to the president for university relations will be reassigned as follows:

Ryan DeBoef, current legal counsel, will become the chief of staff and assistant to the president for governmental relations. He will have responsibility for governmental relations at the state level.

Dr. Jim Baker, vice president for research, economic development and international programs, will add federal governmental relations to his portfolio.

M. Suzanne Shaw, has been named the new vice president for marketing and communications, following a nationwide search. She will have responsibility for the unit formerly known as university relations, which includes university communications, publications, Web and new media, photographic services and athletics communications.

Penni Groves, current general counsel, will move to the role of legal counsel.

Rachael M. Dockery has been hired as the new general counsel.

For more detailed information, please see the news release we distributed on the reorganization.

China trip

On Saturday morning, May 17, I leave for a 10-day trip to China with Vice President Jim Baker, Associate Vice President Steve Robinette and others. While there, we have a number of activities scheduled, including the graduation for students at Liaoning Normal University in Dalian, several alumni events, and multiple meetings with our education partners, both current and prospective.

When we talk about signature programs for Missouri State, our China program has to be near the top of the list. We continue to expand our partnerships, involve increasing numbers of students and faculty and are now developing alumni ties there.

While I don’t necessarily look forward to the 12-hour flight, I am looking forward to spending time in China to further develop our program there.

Conclusion

I hope this week is a good finish to the year for you, and I hope you will make time to attend one or more of the commencements in Springfield on Friday, May 16, and West Plains on Saturday, May 17. I also wish for you a restful and rejuvenating summer, no matter what you are doing or where you will be.

Thank you for all you have done for Missouri State University during the 2013-14 year.