Presidential Updates

Clif’s Notes for Feb. 18, 2020

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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!

Clif’s Notes for May 21, 2019

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The Board of Governors met last week.

The Finance and Facilities Committee reviewed recommendations from the Executive Budget Committee. We are very fortunate to have new revenue in this year’s budget due to a substantial increase in state appropriations, a modest tuition increase and reallocation of $2.4 million in existing resources.

However, we are anticipating a 2.8% enrollment decline next fall. This will cost the university approximately $4.6 million in lost revenue.

Investing in our employees

The Executive Budget Committee has recommended that the bulk of the revenue remaining after we account for the enrollment decline go toward our employees. Highlights include:

  • $4.7 million in compensation increases for employees (including a cost-of-living adjustment, faculty promotions and the full professorship incentive program, and a student minimum wage increase)
  • $1.3 million in a mandatory increase in the university’s pension contribution
  • $200,000 in increased usage of employee fee waivers
  • $400,000 in stipend and fee waiver increases for graduate assistants
  • $300,000 in new positions

The compensation increases include a 1.9% across-the-board cost-of-living pay adjustment for employees. If approved by the board in June, this increase will go into effect on July 1.

We also plan to set aside $800,000 in a scholarship and recruitment fund to develop strategies to increase enrollment.

Commendations and awards

During its regular meeting, the board approved this year’s slate of inductees into the Wall of Fame. This year’s inductees are:

  • Earle Doman
  • Neosha Mackey
  • Virginia Mee
  • Linda Pettijohn
  • Denny Pilant
  • Burnie Snodgrass

As in years past, we will have an induction ceremony honoring these individuals during Homecoming week.

The Board also acknowledged this year’s recipients of the Excellence in Public Affairs Award:

  • Heather Blades
  • Lyle Foster
  • Janice Greene
  • Carol Miller
  • Sheryl Ruff-Hensley
  • Katie Stinnett

The board also approved commendations for Tom Dickey (outgoing chair of faculty senate) and Jon Lee (outgoing chair of staff senate) as well as our SGA President Isaiah Villarreal and SGA Vice President Dillon Cordon. Congratulations to all of you on a great year. The university is a better place because of your leadership.

The board concluded its meeting with a discussion of the department of defense and strategic studies (DSS). The program is highly acclaimed for its emphasis on practical application as well as theoretical comprehension. DSS plans to submit a proposal for approval of a professional doctorate degree program to the Missouri Department of Higher Education this summer.

Thanks for all you do for Missouri State!

Clif’s Notes for Oct. 9, 2018

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In June, I told you that if we received the funds appropriated by the legislature for fiscal year 2019, we would reconvene the Executive Budget Committee to evaluate options for a mid-year compensation increase.

We are over three months into the fiscal year, and I am pleased to report that we are on pace to receive the funds appropriated by the legislature. Many thanks to the Missouri General Assembly and Governor Mike Parson for restoring the funding cuts proposed earlier in the year.

As promised, the Executive Budget Committee met last week and developed its recommendation for a mid-year compensation increase. The committee will recommend that the Board of Governors approve an ongoing across-the-board compensation increase of one percent plus $600 for all full-time faculty and staff hired on or before Sept. 30, 2018. The proposed increase will be added to base pay starting on Jan. 1, 2019, for 12-month employees and on Feb. 1, 2019 for 9- and10-month employees.

This will cost the Springfield campus approximately $2.5 million in annual operating funds. This is the same cost as a 2.1 percent across-the-board raise. The Executive Budget Committee opted to structure the raise with a $600 flat component to soften the impact of increased premiums in the medical plan and to ensure that the pay raise helps our lowest paid employees the most.

Under this model:

  • An employee whose salary is $30,000 will receive a $900 pay increase (a 3 percent raise). A 2.1 percent raise would have resulted in a $630 pay increase.
  • An employee whose salary is $50,000 will receive a $1,100 pay increase (a 2.2 percent raise). A 2.1 percent raise would have resulted in a $1,050 pay increase.
  • An employee whose salary is $100,000 will receive a $1,600 pay increase (a 1.6 percent raise). A 2.1 percent raise would have resulted in a $2,100 pay increase.

Even with this increase, I recognize that our salaries at Missouri State lag behind national averages for all employee groups. Compensation remains a concern for the board and the administration, and we will continue to prioritize compensation increases as we develop budgets in the future.

Thanks for all you do for Missouri State!

Clif’s Notes for Feb. 13, 2018

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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

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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.

  1. 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.
  1. 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.
  1. 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.
  1. 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.
  1. 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!