UM system might face cuts in state funding

Most of the state's revenue goes toward education, one legislator says.

By Greg Young

Published Dec. 9, 2008

With the state legislature anticipating budget shortfalls next year, the UM system is bracing for cuts.

Although the UM system Board of Curators does not yet know the extent to which budget cuts are necessary, they are preparing impact statements for potential budget cuts of 10 to 25 percent, per a request last week from Paul Wagner, the deputy commissioner of the Missouri Department of Higher Education.

"This is the beginning of the planning process," MU spokesman Christian Basi said. "While we are consistently planning for contingencies, this is the first step in order to analyze our current situation."

The potential cuts come amid a report last week from Gov.-elect Jay Nixon's transition team estimating that the budget deficit will reach $342 million for the current fiscal year. Because the state constitution requires that the budget be balanced, Nixon is proposing freezing long-term state contracts, as well as conducting performance reviews on each agency.

"We will live within our means, make government more efficient, and once again have a budget that reflects the needs of regular Missouri families," Nixon said in a news release.

Despite those proposals, MU economics professor Joseph Haslag said Nixon will have to curb some of his policy proposals made during the campaign.

"It is kind of like a household that has taken cuts in their income and they don't have the abilities to borrow," Haslag said. "There have to be some changes in spending."

However, there are some questions as to whether Nixon's estimated budget deficit is completely accurate.

"We think it might be a little bit overly pessimistic but as we continue to move forward to the budget, we watch it daily," said Mark Schwartz, a policy analyst for House Budget Chairman Allen Icet, R-Wildwood.

Rep.-elect Chris Kelly, D-Columbia, said he believes that the budget deficit projection could actually be an underestimate.

One looming question over the projected budget deficit is whether funding to higher education will get cut, and if so, by how much. The current budget for higher education funding is $1.3 billion, which represents 5.6 percent of the total state budget.

Although most officials have acknowledged that there will be some cuts necessary to higher education funding, it is unclear the extent of which the cuts will be necessary. Sen.-elect Kurt Schaefer, R-Columbia, said that though the budget cuts to higher education might be necessary, Missouri lawmakers should learn from the budget shortfall in 2001-2002, in which, he said, the UM system took a huge hit.

Kelly is more blunt about the necessity of budget cuts to higher education.

"A huge majority of the general revenue is in secondary and higher education," Kelly said. "You can cut all the general revenue out of the Department of Health, every single dime, and not make any difference to the total amount."

When asked about the potential for budget cuts to higher education, Schwartz said Icet's No. 1 priority is education.

Basi said, while tuition rates would be considered as the university prepares for budget shortfalls, he could not say if tuition would rise based on the current situation.

Haslag believes there are ways MU can help negate any budget cuts to higher education to prevent tuition rates from increasing.

"During this type of downturn you will frequently see prices decline, the question is if the general price level goes down, then you don't have to give raises the same way," Haslag said.