MU to experience $32 million budget loss from enrollment decrease
Budget cuts and a hiring freeze are two of the plans that will be implemented to save money.
Mar. 09, 2016
MU is expected to be $32 million short of next year’s planned budget, interim Chancellor Hank Foley announced in a letter sent to staff Wednesday.
“I wish I had better news,” Foley wrote in the letter.
The shortfall comes from an anticipated enrollment of 1,500 fewer students for fall 2016 and does not include the proposed $1 million loss from state appropriations.
Without exception, MU will impose a 5 percent budget cut. With the cut, Foley wrote that MU “will be $10 million short of balancing (the) recurring budget.” Reserve funds will be then used to fill the gap in the 2016–17 budget. Additionally, there will be no raises, unless through promotions.
There will also be a hiring freeze. It will be left to the discretion of campus administrators to choose whether to hire faculty or staff, but the need for new employees must be “exceptional” and “absolutely necessary to the mission,” Foley wrote.
The Missouri state legislature is also proposing a $7.6 million cut to the UM System budget as a whole, which would bring a further challenge.
“Such a cut to the system budget would have to be shared with the four campuses as critical functions provided by the system offices will need to be carried out on behalf of each of our campuses,” Foley wrote. “We at MU would probably bear a significant percent of the system reduction in order to maintain treasury, legal counsel, benefits administration and other services system administers.”
He wrote that there are a number of initiatives underway to encourage more first-time students to enroll at MU in the fall. Current plans include reaching out to admitted students via calls, texts and Skype and adding more out-of-state recruiters. Foley also said the admissions department will develop a new web-based admissions platform that gives live feedback to prospective students.
“The goal is to make it easy to apply and to know very quickly what their prospects are for admission to MU,” Foley wrote. “The key is to be faster, more personal and much more interactive.”
Foley noted in his letter that an increase in tuition is not the solution to the budget shortfall because an increase in tuition is limited to the Consumer Price Index. The CPI last year, Foley wrote, was 0.7 percent. An increase in tuition, if approved by the Board of Curators, would account for $2 million, not nearly enough to make up for the losses.
Because tuition alone cannot solve the budget shortfall, Foley announced a variety of plans that will be implemented to reduce expenditures.
Revenue projections for a single year have little impact on large campus projects with dedicated sources of funding, Campus Facilities spokeswoman Karlan Seville said in an email.
“The large capital projects that have had recent Board of Curators action include a variety of funding sources but all that are dedicated to the particular project,” Seville said. “Examples like donor funds, state appropriations for facilities improvements and bonds repaid by auxiliary revenue are generally set aside from the day to day operating revenue stream.”
Spokesman John Fougere said in a statement that the UM System is reviewing multiple scenarios and creating multiple plans.
“As currently proposed, a reduction to the system budget could have a number of impacts on campus budgets as critical, centralized functions performed at the system offices would have to be funded or replicated at the campuses,” Fougere said in the statement. “In the meantime, we will continue to work closely with our state legislators as they determine our appropriation, and are committed to doing so by being accountable, transparent, and fiscally responsible in our leadership and our actions.”
The challenge will affect the university short-term, Foley wrote, but “we have survived other stressors of this kind before.”
“We will endeavor as a campus to make decisions on these reductions that will least hamper our ability to deliver our core mission,” Foley wrote. “We also will seek to build on the strengths of this university as we move forward.”
Edited by Taylor Blatchford | firstname.lastname@example.org