Note: This story has been changed from its original version. Paragraphs 1, 2, 4, 6, 9, 10 and 11 were changed to repair several different errors.
ST. LOUIS — The UM system's proposed 4.1 percent tuition increase for the next academic year was made in order to match the increase in the consumer price index, a university financial representative said at the UM System Board of Curators meeting Thursday morning.
The projected increase is in accordance with legislation passed in the Missouri Higher Education Loan Authority bill last May, said Nikki Krawitz, UM vice president for finance and administration.
The curators did not vote on the hike today but are expected to at their next scheduled meeting in April in Rolla.
Any future proposed tuition increases on the university's budget scenarios through fiscal year 2012 are assumptions for making long-term projections, and are not necessities.
In 2007, Missouri appropriated about $402 million to UM for its general operating budget. The system projected that nearly $500 million in appropriations was necessary to keep up with inflation. Estimates for the 2008 fiscal year suggest the continuation of an approximate $100 million funding shortfall, with the system expecting around $418 million in allocations from the state, Krawitz said.
In the 2001 fiscal year, UM received close to $429 million from the state government, upon which the system's funding gap projections for inflation were based.
Missouri also ranks in the bottom fifth of the country in funding increases to higher education. While the national funding average increased by an average of 7.5 percent, Missouri’s increase was just 4.4 percent, according to the Illinois State University Center for the Study of Education Policy.
Since 2000, state appropriations have dropped from almost 56 percent of UM’s operating budget to just 39 percent in the 2008 budget. In the same time frame, information from the system shows that students’ payment of tuition and fees has risen 13 percentage points to cover 48 percent of the current budget.
Krawitz said the combination of state appropriations and tuition increasing together at the rate of inflation would not cover the university’s increase in expenses because items involved in higher education expenditures increase at a different rate than items contained in the consumer price index. Concentrated spending on utilities, technology, library costs and salaries, she said, explains why higher education’s price index has increased 1.7 percent more than the consumer price index over the past decade.
A 15 percent increase in full-time student enrollment at the system’s four campuses since 2000 further highlights the effects the percentage decline in funding has had on higher education in Missouri, she said. Combine the percentage increase in enrollment with the percentage decrease in appropriations in the budget, and the result is a decline of almost $2,000 in funds per each full-time-enrollment student system-wide.
Krawitz said higher education sometimes struggles with the overall economic environment in relation to endowment spending.
“When the market is down, everyone speaks up and says that higher education is spending too much,” she said. “And when markets are up, everyone asks why we aren’t spending more.”
Other business during Thursday’s meeting was supposed to have included voting on new increases to student fees at each of the four campuses, but the decision was pushed back until April. Tony Luetkemeyer, student representative to the Board of Curators, voiced concern over the discrepancy between the MU student government’s approved health fee increase and the increase proposed by the finance committee for the university.
Included in MU’s student fee recommendations for the 2008-09 academic year is a $35 fee per semester, beginning in the spring 2009, to cover costs for renovations and expansion to Brady Commons.
The Board of Curators’ meeting continues on Friday, where UM Interim President Gordon Lamb will give his final presidential report. President-Designate Gary Forsee, who was an observer at Thursday’s meeting, will take over the position Feb. 18.
You can listen to live streaming audio coverage of Friday’s 9 a.m. meeting by logging on to umsystem.edu/stream.