UM System Enterprise Investment Program loses $2 million in funding

Wednesday, June 29, 2011 | 8:12 p.m. CDT; updated 4:29 p.m. CDT, Tuesday, July 19, 2011

COLUMBIA — Interim UM System President Steve Owens announced Wednesday that the system’s Enterprise Investment Program took the hit after a two-week deliberation to decide where to inflict a deeper cut in state funding.

In a letter to university employees, Owens said half of the recent $4.37 million withholding mandated by Gov. Jay Nixon would come out of the program, which supports university-affiliated start-ups. This would leave the program intact but reduce its original budget by $2.18 million.

The other half will be allocated to the four campuses, Extension and System Administration on a pro rata basis.

MU will absorb $957,000, said Christian Basi of the MU News Bureau.

"This money will come from accumulated savings from frozen positions and cutting other positions since the university's hiring freeze went into effect in 2008," Basi said.

When positions are vacated, supervisors must get special permission to refill the space, he explained.

"This has left numerous unfilled positions across campus," Basi said.

He estimated that roughly $5 million remains in the savings fund, but university budget planners had set it aside to absorb any future financial burdens.

“We had hoped to hold on to these savings in the upcoming years because of the continuing economic uncertainties and potential decreases in student enrollment,”Basi said. “Some predict there will be fewer high school graduates in Missouri in the next few years.”

Owens rejected other options that had been presented to the Board of Curators two weeks ago. Possibilities included adding to student fees, asking employees to contribute more to their retirement funds and trimming the 2 percent merit salary pool.

Owens also fielded potential cuts to 4-H programs, reductions in financial aid or capping enrollment to ease the strain of students on campus resources.

In his letter, Owens said none of the options was appealing.

"Each of the options, if exercised, would have a negative impact on some important aspect of our mission of teaching, research, service and economic development," he wrote.

Owens said his decision would not affect this year's pending investment awards to entrepreneurs who will soon be selected to receive funds from the Enterprise Investment Program.

The cut, however, will impact the university's ability to provide similar enterprise awards in the next year or so. It would also have an adverse effect on potential long-term investments for the university and state, Owens said.

“The likely effect of this cut will be felt in the form of fewer new businesses and new jobs created as a result of the program,” he wrote. “It also means a reduction in the likelihood of generating new revenues for the university from licensing new technologies — a source of funding that could help offset the costs paid by taxpayers, students and their families to support our core missions.”

The latest $4.37 million cut comes on top of $8.7 million in previously identified reductions, efficiencies and reallocations, and $53.2 million in cuts that have been self-imposed in order to present a balanced budget at the last board meeting, Owens told UM employees.

He noted that buildings, labs and classrooms were suffering the most, with a maintenance and repair backlog that has swelled to more than $1 billion.

“These are challenging times for higher education in general and for the University of Missouri System in particular,” he said.

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Mike Sykuta June 30, 2011 | 10:19 a.m.

Can someone explain why 4-H should continue to be administered as a state agency through UM Extension? Why are taxpayers paying to provide a youth program that competes with many other youth programs that are privately funded? Not that 4-H isn't a great program, but why should it (and youth who participate in it) benefit from direct taxpayer subsidies for program, staffing and operational support? Why shouldn't (or couldn't) 4-H be cut loose to fund for itself just as BSA, GSA, Boys & Girls Club or so many other quality youth programs?

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