A “modest tuition increase” is likely this fall in light of the volatile financial situation caused by COVID-19, UM System President Mun Choi said Thursday.
Choi made the remark at an online special session of the UM System Board of Curators held to provide a budget update during the pandemic. That increase will be discussed in more depth at the June 18-19 curators meeting, Choi said. He did not say whether the increase would be systemwide.
There is no end in sight for budget cuts and personnel reductions, according to a report from the board’s Finance Committee and system Chief Financial Officer Ryan Rapp, as “leadership anticipates further personnel reductions will remain a potential necessity.”
As of May 13, MU has laid off 49 employees, furloughed 899, reduced salaries of 995 and not renewed the contracts of 33.
The system will also move to a quarterly budget adjustment process for the indefinite future to account for any new unexpected financial changes, Rapp said. Any changes each quarter to the budget previously approved by the curators must be re-approved by the Finance Committee, Rapp said.
“We do have to change how we think about our budgets,” Rapp said. “Until the long-term impacts of the pandemic and its related economic challenges become clear, we’re going to stay on quarterly budget planning.”
Weighing financial options
A number of factors have already significantly affected the system’s budget, including state revenue decline, student refunds from the spring semester, losses to MU Health Care and federal stimulus funding.
Missouri’s budget, as proposed by legislators in Jefferson City, would not cut higher education funding as long as the federal government continues to support states financially — taking the situation largely out of the system’s hands. Gov. Mike Parson said Tuesday Missouri schools will “most certainly” see a reduction in state funding and he will meet with education leaders Wednesday.
Rapp and the Finance Committee provided three potential budget outcomes for fiscal year 2021, titled “Virus Contained,” “Virus Recurrence” and “Pandemic Escalation,” which roughly line up with the three primary scenarios for reopening campuses in the fall. The scenarios project the following revenue declines:
- Virus Contained: $60 million decline, or 3% of the system’s planned budget
- Virus Recurrence: $250 million, or 12.5%
- Pandemic Escalation: $500 million, or 25%
The system plans to align with the Virus Recurrence option, Rapp said, which expects either the fall 2020 or spring 2021 semesters to “return to depopulation and online learning.” The third option, if realized, would see significant disruption to “auxiliary services,” including residence halls, dining halls, bookstores, athletics and more, Rapp said, as many of them would not be in use.
The second option would also see major declines in those auxiliary services, enrollment loss, “especially among non-resident students” and a slight decrease in state support, according to the Finance Committee’s report.
Much of the board’s discussion about budget cuts involved consolidating administrative duties and eliminating non-essential roles to “better align with our mission on all four campuses,” Choi said. That process would be “data-driven, transparent and have input from a variety of stakeholders at and beyond the university,” he said.
The finance report invoked the actions taken by the university in 1931, early in the Great Depression, which involved the “elimination of much clerical help (and) assistants.” Those steps could guide what the system does in the wake of the current pandemic, though Rapp said he would not equate the two and was still unsure of the full economic impact of COVID-19.
Despite the uncertainty of the longevity and extent of COVID-19’s impact on the UM System, Rapp said he still views the actions taken for fiscal year 2020 as “temporary,” and they will have to be revisited in fiscal year 2021.
Scenarios for reopening
As the MU campus gradually reopens for the summer, system leadership has developed five scenarios for fully reopening campuses in the fall, largely dependent on the evolution of COVID-19. Financial officials are preparing three budget scenarios, also dependent on the pandemic’s future and how the system decides to reopen.
The scenarios for fall reopening include full in-person learning, a hybrid of in-person and remote learning and a primarily remote semester. It is also possible for the semester to begin in person or with a hybrid and transition to fully remote. Choi, who is also interim MU chancellor, said each campus’ plans will vary depending on local health situations, but as of now, the system plans for its four campuses to operate in-person this fall.
“In general, people that I’ve been meeting throughout Columbia are excited that we’re planning for normal operations in the fall,” Choi said. “But they also recognize that we have to take the health and needs of our entire community into consideration.”
Choi said if the campuses open for in-person learning in the fall, they will be “in constant contact” with local public health departments to stay in accordance with their policies.
In the event the fall semester starts or transitions to remote learning, Choi said, those teaching courses must prepare an online version with “rich, high quality content.”
“Low-quality experiences will lead to demands from parents and students for tuition discounts,” he said. “We need to prepare now. We have the resources, and they are made available to all staff, faculty and students assigned to teach.”
System leadership will ask department chairs to confirm compliance with these instructions to avoid hit-or-miss remote instruction some students experienced with the rapid transition in the spring.
“We cannot put our students in that predicament again,” Choi said.