Executive Budget Committee Archives

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!

Clif’s Notes for Jan. 24, 2017

January 24, 2017 by Clif Smart

As many of you are aware, Governor Greitens announced a $146 million spending restriction to make up for a projected revenue shortfall. The amount apportioned to the Missouri State University system is approximately $6.3 million.

The percentage increase in state revenue this year to date is only 2.2 percent vs. a projected increase of 4.1 percent. This comes after the state revenue for last year increased by 0.9 percent vs. a projected increase of 2.8 percent. Consequently, the state must close the gap.

What this means to Missouri State

The university expected spending restrictions given the state’s revenue shortfall. Because of our enrollment growth and the work we have done to increase efficiency and quality at Missouri State, we have the ability to manage through this readjustment of funds using reserve funding. We are not expecting more restrictions on the current fiscal year’s budget.

State annual appropriations are paid monthly to the university. The $6.3 million restriction is the equivalent of withholding one month’s payment. This withhold will be spread over the next 5 months making it more manageable. To fully understand the impact, Missouri State was awarded a 4.5 percent budget increase for fiscal year 2017, which runs from July 1, 2016 – June 30, 2017. The $6.3 million is approximately 7.1 percent of our current appropriations, so not only are we “returning” the 4.5 percent increase, but also an additional 2.7 percent from the prior year which takes us to a funding level below our Fiscal Year 2015 budget.

However, if these cuts become permanent, or if additional cuts become part of next year’s budget, we will have difficult decisions to make in the coming weeks and months about raising tuition and fees and reducing services. We could essentially be returning permanently to state appropriation levels from fiscal year 2014 or 2015. We’ll have a better understanding after the Governor releases his proposed budget for the state in early February.

Moving forward

Our goal for the immediate future is to develop principles and priorities to guide us in the process so that we are organized, rational and consistent in our consideration of budget adjustments for fiscal year 2018, which begins on July 1. The Executive Budget Committee and our Chief Financial Officer will lead us through this process.

Shortly after the state budget is released, we will hold a town hall meeting to share information, receive input and review the process set up to make tough decisions on how to handle the short-term withholding and the potential long-term budget reductions.

It is more important now than ever that we continue to move the university forward. Stay positive; developing a bunker mentality will not help us solve these funding problems. We must remain committed to our goal of increasing the number of graduates through growth in enrollment and by increasing retention and graduation rates and enhancing the campus climate.

Thanks for all you do for Missouri State!

Clif’s Notes for May 5, 2015

May 5, 2015 by Clif Smart

In this issue I discuss our state appropriation.

State budget includes increase for Missouri State

The Missouri General Assembly has passed the state’s budget for fiscal year 2016. I want to highlight two key components of the budget that significantly affect the University.

State legislature approves $1.325 million for health programs

In each of the past two years, the budget has included a $1,325,000 appropriation for the University’s occupational therapy program on the Springfield campus and allied health programs on the West Plains campus. This year, the House’s budget included a $1 million appropriation for these programs, and the Senate’s budget included the full $1,325,000 appropriation.

I am happy to report that the General Assembly went with the Senate’s budget number and appropriated the full $1,325,000. This, in addition to the Governor’s release of the remaining withheld funds from this appropriation for fiscal year 2015, is very good news.

MSU sees largest percentage increase of any university in the state

The General Assembly also included a performance and equity increase for all public four-year universities in the state. The average increase was 1.3 percent. Because of our successful achievement of all of our performance measures, and because the General Assembly included an equity component to the increase, we are receiving a 1.5 percent core funding increase. This is the largest percentile increase for any of the public four-year universities in Missouri this year. We believe this is also good news.

With the legislative budget process completed, the Executive Budget Committee will now begin to finalize its recommendations to the Board of Governors for the fiscal year 2016 budget. We will continue to advocate for the University’s other priorities throughout the remainder of the legislative session.

Thanks for all you do for Missouri State!