Earlier this month the Springfield campus Executive Budget Committee held its first meeting to discuss the fiscal year 2021 budget. This year’s chair is Dr. Richard Gebken, and each college has an elected faculty representative on the committee. Leaders of Faculty Senate, Staff Senate, the Student Government Association also sit on this committee.
The purpose of this meeting was to evaluate preliminary budget numbers and discuss strategies to increase revenue and reduce expenses to fill the budget shortfall. The Executive Budget Committee makes recommendations that the Board of Governors considers when finalizing and approving the university’s operating budget.
Reviewing the current budget
Before beginning to work on next year’s budget, the committee first reviewed this year’s budget.
This year’s budget includes:
- A modest tuition increase that was substantially less than the increases at most other public universities in Missouri
- $9 million in new revenue due to a substantial increase in state appropriations (this is net of the state’s standard 3% withholding and the West Plains campus’s share of the increase)
- $1.4 million in additional interest income
- $6.9 million in payroll and benefit increases
- $2.4 million in expense reductions and re-allocations
Unfortunately, we also had to budget for $4.6 million in reduced revenue because of a decline in credit hour enrollment.
Planning for next year
As we begin to work on next year’s budget, we will start with a carry-forward of $3.2 million in revenue. We intentionally left this carry-forward in this year’s budget because enrollment projections indicate another enrollment decline in fall 2020.
Next year’s budget assumptions include:
- More than $300,000 in faculty promotions
- Funding for enrollment strategies that were rolled out this year, such as the application fee waiver, the Academic Advising and Transfer Center, the Center for Academic Success and Transition, and scholarship program changes
- Increases in the cost of employment benefits, such as a $900,000 increase in the university’s pension premiums, $1 million in increased health care costs and more than $200,000 in increased usage of the credit course fee waiver program.
- A $1.3 million reduction in the support the university’s auxiliary system can contribute to the operating budget
Unfortunately, our enrollment model continues to project another enrollment decline in fall 2020. This will impact the budget with:
- Another $5.2 million decrease in tuition revenue
- A $700,000 decrease in anticipated auxiliary student fee and parking revenue
If Missouri State increases undergraduate in-state tuition by the maximum amount allowed by the law, we will still have an anticipated budget shortfall of nearly $7 million that must be filled for the upcoming fiscal year.
How we move foward
We are developing several strategies to address this budget shortfall.
First, we are implementing cost reductions of $2.9 million across campus. I have asked all cost centers to begin the thoughtful process of identifying where these reductions can be taken.
Second, we are working to improve our enrollment situation for the fall semester. Due to state and national demographic shifts, we will not have increased (or even flat) enrollment in fall 2020. However, we are working on strategies to reduce the amount of our enrollment decline. Some indicators show that these strategies are making an impact, but we will not know for sure until the fall semester begins.
Third, we are advocating for an increase in operating appropriations from the state. Last week Chairman of the Board of Governors Craig Frazier and I traveled to Jefferson City and met with legislators to discuss the importance of year-over-year operating appropriation increases for Missouri State. You can find additional information about these meetings and the other work we are doing in Jefferson City in the most recent MSU Legislative Network update.
Board will discuss this week
We will present this same information to the Board of Governors later this week during the Finance and Facilities Committee meeting. Discussion at that meeting will focus on tuition and fees for the 2020-21 academic year.
Due to last year’s appropriations increase, we were able to hold the tuition increase for in-state undergraduate students to 2.87%. Our tuition increase was significantly lower than the increases at other public universities throughout Missouri. This allows us flexibility to increase tuition in the coming year while still being competitive with our affordability.
If you have input on any issues relevant to the university’s budget, please feel free to reach out to the members of the Executive Budget Committee. You can find the roster in the university’s Committees Handbook.
Thanks for all you do for Missouri State!