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MU faces big decisions with budget crunch ahead

Thursday, April 18, 2013 | 3:43 p.m. CDT; updated 8:57 a.m. CDT, Monday, April 22, 2013
Mark Twain Residence Hall undergoes a renovation at Conley and Fifth Street.

COLUMBIA — MU's past 11 years have been defined by skyrocketing enrollment growth.

Since 2002, the university has grown by more than 8,500 students — or by the size of a small university, MU administrators say.

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The rapid and record-breaking enrollment growth has boosted MU's national reputation and shifted its primary competition from Missouri institutions to flagship universities in other states, said Ann Korschgen, vice provost for enrollment management.

Also in the past 11 years, MU has seen an incremental decrease in state funding. The diminishing help from the legislature has forced MU to use tuition provided by the enrollment growth to balance its budget.

"Essentially, we've used tuition to offset a lack of state funds," MU Budget Director Rhonda Gibler said at a budget forum in March.

But an expected decline in enrollment growth, plus the limitations of space on campus, could limit the stream of tuition that has counterbalanced the shrinking state funds. With no additional help from the state predicted, MU administration, faculty and staff are wondering where the funds will come from or where the cuts will be made to balance the budget for fiscal year 2014 and beyond.

The university's general operating funds — the part of the budget that pays for faculty, staff and campus operations — consists of state appropriations, tuition and research grants.

State appropriations amounted to more than 70 percent of the general operating budget in 1990. Tuition provided less than 30 percent, according to MU budget documents.

For fiscal year 2013, tuition contributed to 62 percent of the general operating budget, while the legislature added less than one-third of the funds, according to the documents.

The expected decline in enrollment growth compounds the problem. The high school senior class of 2009-10 was the largest ever in Missouri, reaching more than 70,000 students.

Since then, the number of Missouri high school graduates per year has decreased by nearly 5 percent, Korschgen said. A survey released in 2008 by the Western Interstate Commission for Higher Education predicted the number of high school graduates would decrease by as much as 5 percent per year until 2015.

MU has targeted out-of-state high school graduates to compensate for the curb in Missouri seniors. From a strictly financial point of view, out-of-state undergraduates are worth the extra recruiting effort; they pay nearly twice the amount of tuition and fees as in-state students. They also bring diversity to the campus — both ethnic and geographic — and often stay in-state after graduation, enhancing Missouri's intellectual talent pool, Korschgen said.

Increasing enrollment, however, might not be enough to balance the budget for fiscal year 2014, Gibler said. She estimated a $16.3 million shortfall, the difference between revenue and estimated expenses, at the March forum.

Even if MU manages to balance its budget this year, Gibler said the long-term outlook for the general operating fund looks bleak.

"If we continue to make certain kinds of assumptions and do what we've been doing, we'll run a deficit year after year," she said.

If the university can't bring in additional revenue, it will have to "reallocate," or cut and rearrange, internally, Gibler said at the budget forum. 

Provost Brian Foster said MU has already "cut the low-hanging fruit to maximize efficiencies" in past years.

"We have some difficult questions we'll have to confront here pretty quick," Foster said.

Supervising editor is Elizabeth Brixey.


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