COLUMBIA – MU is staring down the barrel of a $12 million deficit for the upcoming fiscal year, and MU Budget Director Tim Rooney explained how the shortage breaks down at Thursday’s general faculty meeting.
Rooney outlined the costs MU will face, which add up to more than $20 million:
- The 5.2 percent budget cuts from the state total a decrease of $10 million.
- MU will attempt to maintain the discount rate currently available for undergraduates, which adds $2 million to MU’s expenses.
- The 2.7 percent increase in graduate tuition would mean tuition waivers from assistantships would cost the university $800,000.
- Few expenditures, which include increasing instruction costs due to enrollment growth, faculty diversity recruitment, promotion funding and new scholarships, would add $9.6 million to the deficit.
To lower the deficit, there are a few opportunities for the university to gain revenue. The tuition increase would bring in approximately $5.2 million, Rooney said, while the projected enrollment increase of 538 students would total $3.9 million.
The budget office is not projecting any salary increases or related benefits increases.
In total, Rooney projected a deficit of about $12 million. This may look like an overwhelming amount, but there are some options to address the shortfall, he said.
The university has a permanent operating reserve fund of $9 million to offset state funding losses, with an additional $9 million in one-time use funding. Campus Facilities was able to identify savings of $2.3 million by signing new contracts, which brings the $9 million operating reserve up to $11.3 million.
MU Chancellor Brady Deaton explained that the university is holding $18 million across divisions as “insurance funds against the unexpected,” and that private fundraising efforts have been very successful.
But whether the university will utilize these funds is uncertain.
Rooney said while many universities have already exhausted their federal stimulus funding, 2012 is when MU will run out of federal money.
“We’ll have to continue to be very cautious and err more toward stability in what we’re doing in funding,” he said. “We want to try to respond to new opportunities that arise but avoid major disruptions that have occurred in so many states.”
Because fiscal year 2012 is fast approaching, Rooney mentioned the possibility of holding onto at least some of the funding for what university officials project to be a rough time.
Rooney emphasized that no decisions have been made because the state’s budget has not been finalized.
Also at the meeting, Deaton addressed potential enrollment numbers for fall 2010.
Based on price elasticity calculations, Deaton said, the increase in non-resident tuition could decrease out-of-state enrollment by 160 students. He also said that more freshmen are opting to attend community college, and that families are increasingly concerned about higher education costs.
Deaton said enrollment projections would be more accurate after the May 1 deadline for deposits, but he outlined the following projections:
- a 1-2 percent increase in first-time college students;
- continued increase in diversity, especially Hispanic students;
- continued increase in high-ability students (those who achieved a score of 28 or higher on the ACT); and
- an overall increase of 2.3 percent, or 500 to 600 students, for a total of about 31,800 students.
Deaton said the university has received 17,080 applications to date, which is a 6 percent increase from last year.