COLUMBIA — Seven years ago, researcher Steven Segal left Yale University to start a microcirculation laboratory at the MU School of Medicine.
His laboratory's work on the signaling processes that control blood flow in the smallest, microscopic blood vessels has earned recognition for its scientific achievements and brought international acclaim to MU.
Segal said that as his time at MU has progressed, however, he and his colleagues increasingly feel constrained by the campus budget, one that relies on tuition collected from rapid enrollment growth to counteract shrinking state funds.
Segal sees the budget's effects in the growing number of students that faculty advise and the inability to accommodate many students seeking research opportunities.
He sees the effects in the university's inability to hire enough research-oriented, tenure-track faculty who capture grant money and publish research that boosts MU's reputation among its fellow public Association of American Universities members.
He sees the effects in aging infrastructure. On and off over the years, his laboratory has lacked clean water and temperature control — essentials for conducting successful experiments, protecting research equipment and ensuring the health of research animals. Although repairs have been prompt, challenges such as these compromise research productivity and education overall, he said.
"People love this place — that’s one of the reasons I came here," Segal said. "It hasn’t lost its attraction, but I’m very concerned it’s on the edge of doing so."
Segal’s frustrations highlight a dilemma for MU as it continues drafting a budget for the coming school year and beyond. Since 1990, decreasing state funds have plagued MU's budget. In the past decade, however, the university's record-breaking enrollment growth — 8,500 students since 2002 — has generated enough tuition to help MU compensate for diminishing state dollars, said Rhonda Gibler, MU budget director.
But MU officials expect enrollment growth — and the tuition that comes with it — to decline, and they do not anticipate additional help from Jefferson City. With faculty already feeling the sting of low state funding and an increasingly crowded campus, university officials are burdened with balancing MU's budget and addressing pressing campus needs.
While state support decreases, the percentage of MU's budget that is funded by tuition (a product of enrollment growth) has increased. Graphic by Colleen Maag
State funding frustration
Gibler, Provost Brian Foster and MU faculty are quick to point out that the lack of help from the General Assembly leaves MU at a budget disadvantage.
Higher education funding in Missouri per capita is 44th in the nation.
"This tells you a story about what level or priority higher education is in our state," Gibler said.
In 1990, state appropriations accounted for 70 percent of MU's general operating fund — the part of the budget that pays for faculty, staff and campus operations. Tuition provided 27 percent. In 2012, tuition supplied 62 percent of the general operating fund, while state money contributed 31 percent, according to MU budget documents.
Frank Schmidt, a professor of biochemistry at MU and former chairman of Faculty Council, has taught at the university since 1978. In March, he attended a budget forum where MU officials asked for suggestions on potentially untapped sources of revenue or extraneous expenses not yet cut.
In an interview a week after the forum, Schmidt used what he called the "dead-mule budgeting metaphor" to describe the state’s funding relationship with MU.
"A farmer discovers one day he can give 10 percent less feed to a mule, and it still works hard," Schmidt said. "The next day, he gives 10 percent less feed, and the mule still works hard. The next day, he goes outside, and the mule is dead. That’s the kind of shortsightedness that ruins the health of Missouri."
Right now, Schmidt said the university is "buying its own hay to feed the mule." He pointed to the money raised from tuition as a result of enrollment expansion as the university’s recent self-sustaining practice.
Universities across the country are resorting to such practices, according to a 2013 study by State Higher Education Executive Association.
The study identified a "new normal" in higher education funding, in which schools and colleges must absorb large state and federal budget cuts and find new sources of revenue to maintain productivity.
Texas A&M University, a member of the AAU and the Southeastern Conference, has doubled tuition over the past decade to cushion a decrease in state appropriations.
Unlike Missouri, the Texas Legislature deregulated tuition in 2003, allowing universities to set tuition commensurate with reduced state funding. Missouri limits public colleges from raising tuition by more than inflation for each year unless approved by the Missouri Department of Higher Education.
Martha Loudder, associate dean of the Mays Business School at Texas A&M, said decreases in state funding forced the university to cut back classes, lay off lecturers and encourage professors to retire.
"We're operating with a skeleton crew here," Loudder said. "We had to let a lot of great teachers go."
In addition to state budget cuts, money held back by the federal government compounds the budget worries at public schools like MU.
Stefan Sarafianos, a researcher at the MU School of Medicine, contributed to the development of EFdA, a drug that combats HIV's primary enzyme and stops the virus from spreading.
He said this work contributed to the international recognition of MU's HIV-research program and, though it is not a cure, the compound might offer hope for the hundreds of thousands living with the virus.
Sarafianos receives the majority of his funding from the National Institutes of Health and other federal agencies. He called the current levels of federal research funding, worsened by the sequester of funds in March, "absolutely demoralizing."
Couple the federal worries with the lack of state funding, he said, and there’s an air of uncertainty among researchers at MU: "What projects can you do if you don’t know your budget for the next few months or years?"
Rise and fall of enrollment growth
In the past decade, MU's enrollment growth has mustered enough revenue from tuition to outweigh the incremental decrease in state funding. But a projected decline in high school graduates in the Midwest — states where MU heavily recruits — has MU officials expecting the robust enrollment growth to level off.
In 2002, MU's Office of Enrollment Management made a conscious choice to more aggressively recruit out-of-state students to combat a projected dip in Missouri graduates, Ann Korschgen, vice provost of enrollment management, said.
The decision was prescient. Since 2003, the number of out-of-state students and the number of in-state students has grown at roughly the same pace. Out-of-state students totaled more than 36 percent of the total student population in 2012, according to MU Registrar documents.
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 campus, both ethnic and geographic, and often stay in-state after graduation, enhancing Missouri's intellectual talent pool, Korschgen said.
Schmidt, who teaches a large undergraduate biochemistry course, said he’s felt the jump in enrollment at the ground level. He advises three times as many undergraduates since the enrollment expansion, he said, and his advisees are having a harder time finding classes to fulfill their major requirements.
"It’s not a big, dramatic shift," Schmidt said. "We don’t have undergraduates going out and recognizing they have to flip burgers because they can’t get their courses in. But you’re not maximizing the capacity we have. So, things are down."
Korschgen said she expects the accelerated enrollment growth to level off in coming years.
The expected enrollment dip is caused, in part, by 10-year projections that show high school graduates declining throughout the Midwest, she said. The projections show an especially sharp decline in high school graduates in Illinois, according to a study by the Western Interstate Commission for Higher Education. More than 4,200 students enrolled at MU in fall 2012 hailed from Illinois, according to MU enrollment statistics.
In the past decade, MU has targeted out-of-state students to boost enrollment growth and revenue. However, recent forecasts predict a decline in the number of high school graduates in some states targeted by MU. The map below includes the states with more than 100 undergraduate students enrolled at MU in fall 2012, and the chart shows the projected percent change in the number of high school graduates in those states over the next decade. Graphic by Colleen Maag
Part of MU's success in recruiting out-of-state students was increasing its out-of-state personnel. The office of enrollment management sent a full-time admissions representative to Chicago in 2003 and another in 2007. The office also added a full-time representative in Dallas and one who splits time between Minneapolis and Denver.
But the decline in high school graduates means MU is competing with other universities, some with more resources, for a smaller number of potential students.
The University of Alabama, for example, has 30 regional and out-of-state recruiters compared with MU's four, Korschgen said.
How will MU stand out from the pack?
"We're in the process of analyzing that very question," she said. "The recruiting landscape is changing very rapidly."
Addressing campus needs
MU administrators, faculty and staff underlined several campus deficiencies for which the university has been unable to find funding during the enrollment flourish and state-funding decline.
Segal, the microcirculation researcher, said the university's inability to hire and retain top research faculty during the enrollment growth has the effect of diluting the quality of education on campus.
"Faculty-to-student ratio has been compromised," Segal said. "As an educator that concerns me because I can only divide the pie into so many pieces before I become ineffective."
At the UM System Board of Curators meeting in April, MU Chancellor Brady Deaton said he plans for MU to hire an additional 100 tenured and tenure-track faculty, or 20 per year, in the next five years.
Gibler said creating 80 to 100 tenure-track positions would cost between $10 million and $14 million over a five-year period. Deaton told the curators much of the revenue to pay for the potential new faculty will come from a private fundraising campaign that's still in its early stages but so far has raised $250 million.
In the next few years, Schmidt said, he envisions the loss of tenure-track faculty — some let go, some moving on to greener pastures.
"These are the ones you'd expect to stay around for a long time," he said. "They're being replaced by short-termers. That's not healthy for the long-term priorities of the institution."
MU officials have long discussed increasing faculty salaries. A recent survey conducted by the American Association of University Professors found that current faculty salaries at MU are at or near the bottom when compared with other public AAU members, a group that MU often uses to measure its position nationally.
"It's almost embarrassing how low our salaries are," Gibler said at the March forum. She estimated that adding to the salary pool for faculty and staff next year would cost roughly $10 million.
Gibler and budget staff are also fighting to find funding for a backlog of capital renewal and deferred maintenance.
MU spokesman Christian Basi said the university has accrued nearly $500 million in capital renewal and deferred maintenance. For example, Hulston, Schweitzer and Strickland halls need new roofs, and the Chemistry Building needs an upgraded heating, ventilation and air-conditioning system.
"There's certain parts of campus we're not proud of," Gibler said. She recently toured areas of campus in need of repairs with other MU officials. "Somebody called it 'the depressing tour,'" she said.
Segal said the areas with outdated and worn infrastructure jeopardize research at MU.
"When you don't have clean water, you can't do your experiments," he said. "When the walls are cracked and the animals are cold, they're stressed. They aren't the same critters, and the ability to acquire meaningful results is compromised."
Balancing next year's budget
Gibler is still crafting the budget for fiscal year 2014. She and Foster have met with deans of various departments to find ways to bring in additional revenue or reallocate,, she said.
"We'll have to identify what we're going to do more of and what we're going to do less of," she said.
Even if MU balances the budget next year, she said, the university has already reallocated the easily identifiable and efficient fixes. She said the long-term outlook for the general operating fund is bleak.
When asked how MU can generate revenue that replicates the type collected during enrollment growth, Gibler said, "that's a huge question."
"There's no absolute way to generate the same revenue," she said.
Foster said that MU has already "cut the low-hanging fruit to maximize efficiencies" in past years and that discussions have been underway to generate revenue in the wake of the decline in enrollment growth.
"We have some difficult questions we'll have to confront here pretty quick," he said.
Supervising editor is Elizabeth Brixey.