Executive Budget Committee Archives

Clif’s Notes for Feb. 13, 2018

February 13, 2018 by Clif Smart

Last week the Executive Budget Committee had its first meeting of the year. The committee will work in the coming months to develop budget recommendations for the Board of Governors.

Performance funding measures

The Executive Budget Committee discussed Missouri State’s results under the new performance funding model. The Springfield campus met all six of its measures. The West Plains campus met four of its six measures. These results formed a part of the governor’s budget recommendations for fiscal year 2019.

As you know, the governor recommended a 10 percent across-the-board cut to core operating appropriations for all public universities and community colleges. The governor also recommended additional cuts for institutions that did not meet all of their performance funding measures.

The result is that the West Plains campus would receive a cut of more than 13 percent to its operating appropriation under the governor’s recommendations. I have joined the presidents from the other public universities to advocate against the governor’s proposal to reduce appropriations for institutions that did not meet all of their performance funding measures.

Staying true to the strategic plan

The Executive Budget Committee looked at the guiding principles we created a year ago. Those principles will continue to guide us as we develop our budget this year. We remain committed to protecting the core mission and strategic plan of the university. Expense reductions will be strategic, and we will continue to prioritize enrollment growth, affordability and transparency as we make financial decisions.

Filling the $8 million gap

The Executive Budget Committee also evaluated projected revenues and expenses for fiscal year 2019.

This year we must fill an $8 million funding gap on the Springfield campus. This gap consists of:

A $5.9 million reduction in state appropriations under the governor’s budget recommendations
$1 million in lost enrollment revenue because the mix of our student body changed this year (i.e., we enrolled fewer international students and more domestic students)
$1.4 million in cost increases for items such as required pension plan contributions, faculty promotions and utility costs
An offset for $300,000 in new revenue from procurement card incentives and additional interest income

We have identified $4 million in new revenue and expenditure reductions to help fill this gap. The first $2.5 million will be generated by increasing in-state undergraduate tuition by 2.1 percent (which is the amount of CPI) and increasing out-of-state and graduate tuition by 4.2 percent. We have also identified $1.5 million in administrative expenses that we can eliminate before the next fiscal year begins.

This leaves a remaining gap of $4 million. The Executive Budget Committee evaluated several strategies to generate additional revenue to address the remaining funding gap. We will continue to work in the coming months to close the gap and develop a stable fiscal year 2019 budget. We will also continue to aggressively advocate that the legislature restore the appropriation cuts recommended by the governor.

Diving into Missouri’s economy

The Missouri Budget Project is a public policy analysis organization that researches and analyzes state budget, tax and economic issues. Amy Blouin, the executive director of the Missouri Budget Project, will be on campus to present and discuss issues related to Missouri’s budget, taxes and economy on Feb. 26 at 7 p.m. in the Welcome Center. Please join me in participating in this conversation.

Thanks for all you do for Missouri State!

Clif’s Notes for Jan. 23, 2018

January 23, 2018 by Clif Smart

Affordability for our students is an important part of what we do at Missouri State.

We have a great record of affordability. While tuition and fees have increased by 50 percent at universities throughout the country, our tuition has tracked with inflation. Our tuition and room and board expenses are also lower than most of the other four-year public universities in Missouri.

Our work on affordability has primarily involved holding down increases on tuition and fees. This becomes more challenging each year when the budget tightens, as it will again in the coming year. Fortunately, there is more to affordability than just the amount of tuition and fees.

Last week we announced five new initiatives to make Missouri State University more affordable.

Hours reduction – We have decreased the total number of hours required to graduate from 125 to 120 hours. This change is effective immediately. Special thanks to Dr. Cindy McGregor, Dr. Thomas Dickie, and our other faculty and SGA leaders for recommending this change.

Food service – We renegotiated our food service contract with Chartwells to reduce the allowable increase for student meal plan charges. Under the old contract, the allowable increase was 4 percent. Under the new contract, the allowable increase will be the greater of CPI or 2 percent.

Housing freeze – We are freezing housing rates for three residence halls next year — Hammons, Hutchens and Scholars — which impacts about one third of our inventory.

Textbooks – We have rolled out a “StreamlinED” textbook program that will significantly reduce costs for textbooks in larger sections of lower-division courses through open sourcing and other cost-reduction strategies.

Scholarship expansion – We are increasing the value of our Missouri State Promise Scholarship by $500. We are also expanding the criteria for several scholarship programs to increase the number of students that will receive those scholarships.

These are win-win affordability initiatives that will provide students with substantial savings without putting significant pressure on the university’s budget.

The state budget and what it means for MSU

Yesterday the Governor released his budget recommendations for fiscal year 2019. These recommendations include a 10.12 percent cut to Missouri State University’s core operating appropriation. This is $8,668,086 less than the General Assembly’s core operating appropriation to Missouri State last year and $10,368,665 less than 2001. To put that in perspective, our enrollment has increased by over 6,000 students since 2001.

As you know, this is not the first budget cut we have experienced in recent months and years. In fact, we have experienced three other recent reductions in state funding over the past year:

FY17 withholding of approximately $6.7 million
FY18 budget reduction of $6.5 million
FY18 withholding of approximately $2.7 million

The impact is that per student funding for Missouri State is the lowest of any public university in the state, and it continues to decline as state funding shrinks and the number of students enrolling at Missouri State grows.

State funding and tuition and fees make up 98 percent of Missouri State’s operating budget. Accordingly, as we face another tough year with regard to state funding, we must evaluate tuition and fee increases.

While our strategy to develop a budget will involve administrative reductions and developing creative revenue sources, these efforts will not alone be sufficient to offset the state funding reductions we anticipate. We are confident that the affordability measures we announced last week will soften the impact of any tuition and fee increases for our students.

We will advocate with our elected leaders to reduce the level of cuts in the budget passed by the General Assembly. Meanwhile we will work through our budgeting process to determine what impact the Governor’s budget recommendations will have in fiscal year 2019. Our first Executive Budget Committee meeting is scheduled for the first week in February.

Thanks for all you do for Missouri State!

Clif’s Notes for May 2, 2017

May 2, 2017 by Clif Smart

Last week the Executive Budget Committee developed its recommendations that I will present at the Board of Governors’ May meeting. I want to take a moment to summarize those recommendations for you.

Identifying expense reductions

You will recall that due to a state revenue gap, Missouri State is developing a budget for the Springfield campus that includes $7.4 million less in anticipated revenue from the state.

One of our guiding principles in our budgeting process is that we will not rely solely on increased tuition and fees to replace the budget shortfall. Guided by this principle, the Executive Budget Committee previously recommended, and the board decided, to raise tuition and fees for in-state undergraduate students only by the amount of inflation. Tuition and fee increases will generate around $3.4 million in additional revenue, leaving $4 million to be identified through expense reductions.

Another of our guiding principles is that protecting the core mission of the university — academic achievement, scholarship and student success—is paramount. Hence, as scenarios were analyzed during the budgeting process, the decision was made that the office of the provost and non-academic units would receive a 4.9 percent reduction, but colleges would receive only a 1.2 percent reduction.

Budget committees across the university have worked throughout the spring to identify $4 million in expense reductions required to develop a balanced budget. In reaching its decision, the Executive Budget Committee discussed the recommendations received from college and university level budget committees as well as feedback received at the budget town hall meeting and other input received from various members of the university community.

I am pleased to report that the Executive Budget Committee has identified the remaining $4 million in expense reductions. These reductions include:

Eliminating 22 vacant staff positions
Eliminating 5 vacant faculty positions
Eliminating 8 occupied staff positions
Reducing the online course incentive payments from $55 to $40 per student
Eliminating institutional support for multiple campus research centers
Reducing event-related expenses by eliminating the Ozarks Celebration Festival, reducing the length of the Public Affairs Conference, eliminating summer commencement and reducing or eliminating several other university events

The impact

By focusing on vacant positions, we were able to eliminate staff and faculty positions largely through attrition. However, these cuts will involve eight staff layoffs. We know layoffs dramatically impact lives, and we anticipate that several of these individuals will find other positions within the university.

We also recognize that our compensation at the university lags behind our peers, and the recommended budget will likely place us even further behind with regard to faculty and staff pay. While living expenses continue to rise, the budget recommendations do not include a cost-of-living increase for employees. Moreover, the online course incentive reduction will result in compensation decreases for some of our faculty.

I know I speak for all members of the Executive Budget Committee when I say that we do not take layoffs and compensation concerns lightly. I am saddened by the impact these decisions have on people who have invested their careers with us at Missouri State. However, I am confident that the reductions are necessary to sustain the financial health of the university. I remain committed to continuing to work on increasing compensation as we move forward.

I encourage all faculty and staff to remain positive and to continue to pursue the university’s mission. Missouri State is strong. We have grown enrollment in 19 of the past 21 years, topping 26,000 students in fall 2016. We anticipate additional growth again in fall 2017. We have a stable leadership team who has managed budget cuts before. I am confident that, together, we can continue our growth and emerge from these cuts stronger than ever.

Thanks for all you do for Missouri State!

Clif’s Notes for March 28, 2017

March 28, 2017 by Clif Smart

The Board of Governors met last week. I want to highlight several of the board’s important discussions and action items.

Update on recent board meeting

In the Programs and Planning Committee meeting, the board discussed scholarship programs, diversity recruitment initiatives and college access programs. The board also participated in a diversity development session that included an overview of diversity and inclusion at Missouri State, a gallery walk and a presentation by Dr. Jake Simmons on “Diverse Student Experiences at PWIs (Predominantly White Institutions).”

At the regular meeting, the board received a presentation from two alums — Bryce Turnbull and Mark Grogan, both employed with the Cerner Corporation — about how they have made their Missouri Statement. The board also approved Terry “Bo” Pace as the recipient of an Honorary Associate degree on the West Plains campus.

The board approved a Master of Science program in Early Childhood Special Education and awarded a contract to renovate the bathrooms in Shannon Tower. The board elected new officers and selected a new executive committee, contingent on the Senate’s confirmation of Govs. Frazier and Silvey as new members.

Direction on the budget

The board discussed the university’s budget at the Finance and Facilities Committee meeting. Several preliminary decisions about the university’s budget were made:

The board instructed administration to move forward with a strategy that would raise in-state undergraduate tuition and fees on the Springfield campus by only 2.1 percent, the amount of inflation in 2016, for the upcoming fiscal year. This will be in addition to the 0.7 percent increase approved by the board in February for inflation in 2015. We will work to finalize a fee resolution in line with this instruction to present to the board in April. We anticipate that tuition and fee increases will increase university revenue by $3.4 million.
The board instructed administration to move forward with $2.8 million in proposed expense reductions in non-academic areas and in the provost’s area. These reductions leave approximately $1.3 million in cuts that must still be made to properly budget for the anticipated reduction in state appropriation. Unfortunately, some of these reductions will have to come from academic areas.

There are many financial decisions to be made before we start the next fiscal year. I would encourage all members of the university community to provide input as the final budget is developed and decisions are made about what additional expenses should be cut.

You can participate in these decisions by:

Contacting your representative on the Executive Budget Committee
Attending the university-wide Budget Town Hall Meeting at 1:30 to 3 p.m. on April 10 in the PSU Theatre

Focus on democracy

This year’s Public Affairs Conference starts on April 4. The theme for the conference is Life, Liberty, and the Pursuit of Happiness: Perspectives on Self-Government. Participants will explore our rights and responsibilities as citizens in a modern democracy.

The featured speaker for this year’s conference is Doris Kearns Goodwin, a world-renowned presidential historian and Pulitzer Prize-winning author. Her presentation, titled How did we get here? An historical perspective on our wild 2016 election, will shine a spotlight on the changes in our political systems over the past 150 years.

This session is scheduled for 7:30 p.m. on April 4 in Juanita K. Hammons Hall for the Performing Arts.

You also won’t want to miss the presentation by J.D. Vance, author of the #1 New York Times bestselling book “Hillbilly Elegy: A Memoir of a Family and Culture in Crisis.” This session is scheduled for noon on April 7 in the PSU Theatre.

As in prior years, employees may use up to two hours of their work time, in coordination with their supervisors, to attend the conference. I encourage you to attend, and I encourage supervisors to facilitate attendance by individuals in your offices or divisions.

The full schedule is available on the Public Affairs Conference webpage. All sessions of the conference, including the presentations by Doris Kearns Goodwin and J.D. Vance, are free and open to the public. No registration or tickets are required to attend.

Thanks for all you do for Missouri State!

Clif’s Notes for Feb. 7, 2017

February 7, 2017 by Clif Smart

On Thursday, Governor Greitens released his budget recommendations for fiscal year 2018. As I discussed in a prior note, the state’s revenue in the current fiscal year has not met projections. Accordingly, the governor is recommending a fiscal year 2018 budget that is $572 million less than the fiscal year 2017 budget.

Meeting with leaders to determine strategies

The impact of these reductions for higher education included a $72.7 million reduction in core operating appropriations for public universities. Missouri State University’s share of that cut is $8.2 million, an 8.9 percent reduction from last year. This year’s budget also omits the line item included in last year’s for our collaborative mechanical engineering program with the Missouri University of Science and Technology.

I spent a significant part of the month of January meeting with the governor, the governor’s chief policy adviser, the lieutenant governor, the commissioner for higher education, our elected leaders in the General Assembly, other government officials and other university leaders about the funding situation. I have also spent substantial time meeting with our board, the senior administrative team and leaders of university constituent groups to discuss our strategy for implementing the budget cuts.

Based on these discussions, I want to assure you of a couple of things:

First, our elected leaders have repeatedly told me that they remain committed to higher education and are proud of the overwhelming success we have achieved at Missouri State University. The funding situation is the result of a revenue gap at the state level, not hostility to higher education generally.
Second, Missouri State University has worked through budget cuts before, and we have an experienced team who will guide us through the current situation.

Our board makes a plan

Last week the Board of Governors spent the bulk of its time discussing the budget. The result of that conversation is the following set of guiding principles that the university will use to develop the university’s fiscal year 2018 budget:

Protecting the core mission of the university—academic achievement, scholarship and student success—is paramount. Budgetary decisions should be consistent with the mission and strategic plan of the university, with a primary focus on preserving strong academic programs, increasing the number of graduates at all levels, and enhancing diversity and inclusion.
All units will share in budget reductions and must become more efficient, but decisions about the relative levels of reductions will be strategic and reductions will not be equal in all areas of the university.
Given the importance of increasing revenue, any reduction in student credit hours would negatively impact the budget. Enrollment growth must continue to be a priority. The university must continue to invest in programs, facilities and technology that will grow enrollment and increase revenue while continuing to align with accreditation requirements.
Affordability and access remain important goals of the university; therefore, the university will not rely solely on increased tuition and fees to replace the budget shortfall.
All budget decisions will be made through a transparent process that uses existing budget committees, involves all constituent groups and utilizes a university-wide communication strategy. The university will continue its commitment to valuing and supporting people and will carefully consider the impact of all budget decisions on faculty and staff.

Guidelines for budget considerations

The university will also direct cost centers to consider or avoid the following specific strategies in making budget decisions:

The overall goal of budget decisions should be to help our university emerge as a stronger, distinctive and more focused leader in higher education, poised for the future. We must maintain quality, maximize efficiency, reduce expenses and increase revenue.
No one-time savings should be used for filling an on-going budget shortfall without prior approval from the president or provost. Transferring an ongoing and necessary cost to another unit is not an option.
Rather than imposing across the board cuts, cost centers should evaluate if entire programs may be eliminated without significantly impacting enrollment. Budget decisions should not reduce student access to core courses during fall, spring and summer semesters.
Evaluate restructuring units, positions, programs and support services to achieve greater efficiency.
Budget reductions should not significantly increase risk to the university. Evaluate the effects of cuts on enterprise risk management.
Budget reductions should not interfere with the university’s compliance with state and federal regulations.
Continue to develop and leverage partnerships with other colleges and universities in the state, along with corporate partnerships, for successful program expansion and increased revenue

The Executive Budget Committee will meet this week to begin the process of developing fiscal year 2018 budget recommendations for the Board of Governors. We will keep you informed of and involved in the process as it occurs.

Evaluating athletic expenditures

Last week, as the budget news was emerging, we formed a work group to evaluate strategies to reduce expenses in athletics. The Athletics Budget Work Group will be chaired by Dr. Jim Hutter. I have asked that group to determine how we can reduce athletics expenses by at least $750,000.

Supporting our international students

The university issued a statement last week about our efforts to support our international students from the countries impacted by the Jan. 27 Executive Order. Read the full statement.

Thanks for all you do for Missouri State!