In this issue of Clif’s Notes, I review the Governor’s action on the operating budget for fiscal year 2014 and its implications for Missouri State University.

Restrictions on budget announced

As you may have heard through media accounts, Governor Jay Nixon has found it necessary to restrict some of the fiscal year 2014 budget approved by the Missouri General Assembly during its recently completed session. The restrictions amount to about 4 percent for many state agencies, including higher education. The Governor has indicated he would plan to lift the restriction if his veto of House Bill 253 is sustained during the veto session in mid-September.

For more information about the restrictions and the reasons for them, I invite you to see the story on the governor’s website.

Impact on Missouri State

For Missouri State University, the restriction means there will be $3,141,979 less available in operating funds than we had planned for in the new budget, which began July 1.

(In case you were wondering, this is in addition to the 3 percent statutory withhold that is normal for each budget year, for which we plan every year.)

In addition, 100 percent of all new funding in the state’s budget is being restricted, including $1,325,000 for these programs:

• Occupational therapy program in Springfield – $825,000
• Health-related programs in West Plains – $500,000

That funding will be re-evaluated in September following the veto session.

Funding of salary increase

As you remember, the operating budget approved by our Board of Governors on June 21 was based on this funding. That includes the 2 percent across-the-board raise that goes into effect July 1. We are committed to funding the raise.

Should the funds not be released at all this fiscal year, we are prepared to use our one-time reserves to cover the expenses for this fiscal year. The Board of Governors agrees strongly with this approach. The fact that we have reserves available for this purpose is precisely the reason Missouri State — all of you — are to be commended for your frugal approach to the budget over the past 5-8 years. As you would suspect, we would then need to evaluate the budget and have a serious discussion about how to budget for fiscal year 2015.

Immediate actions

We are hopeful that the Governor will be in a position to lift the restriction after the veto session in mid-September. With that in mind, we will proceed into the new fiscal year as we had planned, including the salary increase, with the anticipation that the funding will be released.

In the meantime, for the next 75 days, we have determined we need to take the following actions:

• Hiring
  In advance of any searches for open positions, the search must be justified by the unit; be recommended by the provost, CFO or appropriate vice president; and then be approved by the president. We will evaluate those searches that are underway, as well as those searches that are recommended to begin.

• Health program initiatives
  We will proceed slowly and prudently with the health initiatives planned for the $1,325,000 in new funds approved by the legislature. We will continue our search for a director for the occupational therapy program, which is well underway. Beyond that, we will wait until after mid-September to proceed in implementing plans.

• Travel
  All travel requests will be carefully reviewed and should be moderated until mid-September.

• Purchases/contracts
  Any major purchases and contracts that can be delayed until after mid-September should be. Again, please consult your cost center head before proceeding with major purchases and contracts.

• Salary adjustments
  We will not consider any additional salary adjustments/changes beyond the across-the-board increase until Oct. 1.

Beyond this, I am asking all cost center heads to be prudent until we have a clearer picture of the budget for this fiscal year. It is important that we continue to operate and move forward; that is the balance we must achieve. This situation again reinforces just how important revenue from enrollment is to the future funding of the University.

Conclusion

I hope this update is helpful to you. As always, I will keep you informed on the budget as new information becomes available. Thank you for your patience and understanding.