UM system payments deferred

The system says it has sufficient reserve funds for the time being.
Friday, February 25, 2005 | 12:00 a.m. CST; updated 2:49 p.m. CDT, Wednesday, July 16, 2008

JEFFERSON CITY — Gov. Matt Blunt has decided to defer payments totaling $100 million to the University of Missouri system and five other state universities, a Blunt spokesman said Thursday.

During a conference call on Wednesday night with presidents from each school, Blunt received unanimous consent to defer the payments. From March until May, the schools will receive a distributed amount of $14 million per month as opposed to the $47 million usually allotted.

Blunt spokesman Paul Sloca said the money must be deferred so the government can pay for income tax returns that are being filed early. Sloca said the deferment is only temporary and the money will be returned to the schools at the end of the fiscal year on June 30, using money collected from tax filings.

In the meantime, the universities are expected to finance themselves with money from their own reserves.

“Like any business, you want to make sure you have a cash flow,” Sloca said. “You may have a lot of investments, and the state has bills to pay. These are not a shifting of appropriations, these are not new things that are being funded; these are obligations the state’s already under to pay. In a fiscally responsible way, you make sure you have the proper cash flow to cover your bills.”

Schools affected include the UM system, Truman State University and Central, Southeast, Southwest and Northwest Missouri State universities.

Sloca said the deferment will affect neither university operations nor students’ tuition. He said all of the university presidents confirmed that their respective schools have enough money in reserves to last through the three months and that the move will create no strain on university functions.

“This is part of the governor’s response to being fiscally responsible,” Sloca said.

House Minority Leader Rep. Jeff Harris, D-Columbia, said Blunt contradicts his State of the State Address, in which he said: “A college education is increasingly a requirement for success in the workplace. Therefore, my budget maintains the current level of funding for our state’s colleges and universities.”

“This governor promised he would not withhold money from our public colleges and universities, and today he broke that promise,” Harris said. “When you withhold money from higher education when you said you would not do it, you are not being a responsible steward of our taxpayer dollars.”

UM system officials, however, see no problem. Nikki Krawitz, vice president for finance and administration, said the UM system has $32.4 million in uncommitted reserves and $171 million in general operating reserves. The four-campus system will receive nearly $9 million a month over the three months. Normally the system is given $29 million per month.

“It’s just a question of when the cash is going to come in the door,” Krawitz said. “This will not affect any kind of spending. We’re happy to help the state out through this cash flow crunch.”

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