COLUMBIA — In the same way that some college students live off ramen to make ends meet, the University of Missouri System is making its own sacrifices to pay the bills.
The system's leaders discussed some of these sacrifices, such as disproportionately low faculty and staff salaries, at Thursday's board of curators meeting in St. Louis.
The bulk of the system's funding is provided by state allocations plus student tuition and fees.
"Historically these sources have contributed 85 percent or more of the total resources for general operations," according to board documents presented during the finance committee's meeting. The amount of state funding has decreased in recent years, forcing the system to rely more on student funding.
The curators reviewed the system's preliminary tuition and fee recommendations for fiscal year 2015, which would go into effect in the 2014-15 academic year. The board plans to vote on them at its January meeting. The board also approved the MU School of Medicine's plan to hire an architect for a proposed expansion.
Sinking funding and growing enrollment
The UM System's enrollment has grown 34 percent since 2000. More students translate to more dollars but also mean more expenses as better infrastructure is needed.
"Record enrollments push against the capacity of our faculty, staff and facilities," according to board documents.
Employee compensation is one of the system's major expenses, accounting for 78 percent of the operations expenditure budget.
In the last five years, curators have increased MU's undergraduate, in-state tuition by an annual average of 2.3 percent.
Compared to institutions in the Association of American Universities, SEC, Big 12 and Big Ten, MU has the lowest average tuition and required fees.
"We are doing much more with the same amount of money; less money if you take into account inflation," one of the participants said.
State appropriations were $22 million less for fiscal year 2013 than they were in fiscal year 2001. This amounts to $168.5 million when adjusted for inflation.
"Is this a good thing because we've learned to operate much more efficiently? Or is this a bad thing because there are a lot of other things we could do if we would have kept in line with inflation?" Board of Curators Chairman Wayne Goode asked Tom Richards, UM System treasurer and interim vice president for finance.
Richards said it was both.
"It's just a factual statement of looking at the revenues and defining the challenge," he said. "The good news is we've been able to manage through the challenge. Are there things we'd like to be doing that we can't do? Absolutely, because we’ve had to make tough choices."
Curators usually raise resident undergraduate and graduate tuition by the rate of inflation on all campuses. The inflation rate is estimated at 1.7 percent but will be finalized in December.
MU activity, facility and health fees for fiscal year 2015 are also tentatively set to increase at the rate of inflation. Curators are considering raising housing costs by four percent and dining plan costs by two percent.
Campuses can request increases above the inflation rate, but they must be approved by the curators. MU requested a three percent tuition increase for out-of-state undergraduate and graduate students, rather than the CPI default.
"Students are contributing more than ever to the cost of their education as the state provides less funding support," according to board materials. "Continued increases in tuition and fees to offset cuts in state appropriations are problematic due to legislative restrictions as well as access and affordability concerns."
Board members said they needed to hope for the best and plan for the worst.
"The low-hanging fruit of eliminating waste; we've done that," one participant said. "We've been cutting into the bone the past several years. One of the bones that we’re cutting into is our faculty salaries."
One way the UM System has balanced the budget is by deferring maintenance, Richards said, but this isn’t a sustainable solution. According to board documents, costs for deferred maintenance, repairs that were not accomplished as part of normal maintenance, total nearly $626 million.
"The problem is most of the dollars we have are allocated to emergency issues," Richards said. "We’re not able to spend resources on preventative maintenance."
In other business, the curators took the first step to advance a medical campus expansion proposed for MU. The curators approved a $1,950,500 contract with an architect that will oversee the project's design.
The project calls for expanding the Medical Science Addition's current structure from four to seven floors and adding a new seven-story addition to the west.
"This provides a compact yet efficient expansion of space in close proximity to the many existing facets of the MU SOM (School of Medicine), and preserves adjacent land reserves for future further expansion," according to board materials.
The project also includes a new main entrance for the School of Medicine to replace the current entrance, which, according to board materials, is "hidden and difficult for visitors to locate."
MU's School of Medicine plans to increase its annual class size from 96 to 128 medical students and is requesting the expansion to meet the demands for more students.
The full expansion project has a $35 million budget and will be voted on at the board's next meeting, Jan. 30 and 31, in Columbia.
Supervising editor is Elizabeth Brixey.