JEFFERSON CITY — The budget for fiscal year 2018 proposed by Gov. Eric Greitens on Thursday cuts higher education by about $159 million.
The University of Missouri System's state funding would be cut by about $40 million in Greitens' budget, compared to the amount appropriated last year.
Dan Haug, the state's acting budget director, said higher education takes the single biggest financial hit in the proposed budget.
MU officials said that they are creating three committees to find ways to generate additional revenue, looking at allocation of resources, capital finance, and tuition and fees.
Greitens, speaking at a press conference in Nixa, Missouri, said there will be "less money for professors, colleges and universities than they expected" and said higher education institutions "can tighten their belts" and work on greater efficiency.
Of the $159 million cut in higher education funding, $116 million comes from state general revenue. The remainder of the cuts come from funding for projects such as cooperative programs between campuses.
Dan Haug, acting budget director, said the budget cuts represent a total of about 10 percent from this year's appropriation. That equates to a continuation of the cuts in higher education made by Greitens and former Gov. Jay Nixon during the past year, plus a cut of about an additional 2 percent. Haug said that all institutions are treated the same in the budget, so all face the same percentage cut.
Greitens, speaking from a public school in Nixa, also cut the elementary and secondary education budget by $23 million in general state funds. However, the overall budget estimate for elementary and secondary education rose by $36 million because the governor's budget predicted an increase in federal funds.
State Rep. Donna Lichtenegger, R-Jackson, said the proposed cuts caught her by surprise.
"I knew it was going to be high, but that's unreasonable," said Lichtenegger, chairwoman of the House Committee on Higher Education. "There is not a university or community college in the state of Missouri that is a public institution that has not tightened their belts to the fullest extent already."
Lichtenegger said that to combat such cuts, universities and community colleges across the state will be forced to raise tuition. The end result of the cuts will make it harder for Missourians to attend colleges and universities, which means a less skilled workforce.
Lichtenegger also warned that the funding cuts could endanger MU’s standing with the Association of American Universities. "If we lose this status, this is a huge economic engine in this state and economically if people think we're in trouble now, we're really going to be in trouble," she said.
Michael Middleton, the interim UM System president, said in a prepared statement that the cuts will "make it challenging for the University of Missouri System to meet its critical statewide mission of educating our state’s future workforce, performing lifesaving research, and helping move Missouri’s economy forward."
Fougere did not get into specifics about how the system will deal with the cuts. "We will be discussing short and long-term strategies going forward among the university’s leadership about specifics to address the decrease in funding, as we have in the past in these circumstances," he said.
Last year, lawmakers broke down the UM system and dictated cuts by campus. This year, the governor's recommendation reverts to past practice, which lists the system's funding as a whole, leaving it to UM leaders to allocate.
MU tackles revenue problem
MU Interim Chancellor Hank Foley said at an MU Faculty Council meeting Thursday that the university must generate more revenue to compensate for the proposed cuts.
MU will assemble three committees to find ways to generate more revenue, Rhonda Gibler, vice chancellor for finance, told the council. The committees will discuss allocation of resources, capital finance, and tuition and fees. The committee formation dates are to be determined and no members have been nominated.
Foley and Gibler said it is imperative to take action on compensating for cuts before the new fiscal budget comes into effect in July.
"We have to find a different model," Gibler said. "We are at a point of urgency, folks, that if we can’t rally around and do that now, I don’t know what other circumstances will inspire us to do so."
Foley said MU needs to control costs and drive up enrollment.
MU could tap into its reserve funds to deal with the cuts, but Foley said he was reluctant to fully endorse the idea, because different departments have different amounts of reserve funds.
"These three committees (MU is) forming will be very vital," said John Gahl, chairman of the council’s Fiscal Affairs Committee.
Lawmakers took varying views of the governor's proposed cuts.
Lyle Rowland, R-Cedarcreek, chairman of the House Subcommittee on Appropriations — Education, said that he hadn’t had time to study the cuts as of Thursday afternoon.
"I’m going to try to protect education as much as possible," Rowland said. "I’m going to try and put money in where I can."
At the same time, he said the cuts to higher education weren't unexpected.
"I figured we would have a pretty healthy cut taken the fact that we just don't have any revenues coming in," Rowland said.
State Rep. Kip Kendrick, D-Columbia, called the proposed higher education cuts significant.
Kendrick blamed "special interest tax cuts" for contributing to the lack of funding. Special interest tax cuts refer to breaks for certain companies or industries.
"We can’t fund our priorities," Kendrick said. "Higher education, K-12 education, should remain a priority. We can’t fund them when there’s no money coming in."
Kendrick said the university is already going through difficult financial times.
The proposed cuts could "lead to increased costs in tuition, it’s going to lead to layoffs, maybe some elimination of programs as well," Kendrick said. "It’ll affect our entire economy in mid-Missouri and it’ll affect the entire economy across the street."
Chuck Basye, R-Rocheport, said he would hate to see tuition increases or layoffs result from the funding cuts. But he said that cuts must be made.
"We have a requirement by the constitution to balance the budget, and there are these limited areas we can reduce spending," Basye said. "And unfortunately, education is one of them."
Martha Stevens, D-Columbia, said corporate tax cuts have left the state facing tough budget decisions, but that she will advocate for more money for education.
The governor's proposed budget for elementary and secondary education is being reviewed by Columbia Public Schools District’s chief financial officer, who will assess the overall local impact, the district's spokeswoman Michelle Baumstark said.
The district is relatively unaffected by the $8.6 million in busing cuts statewide that Greitens announced in January, Baumstark said, but the long-term trend is more worrisome.
"We budgeted very conservatively with regard to transportation, because that is typically an area withheld," Baumstark said.
But continued cuts have taken a toll. Columbia Public Schools spends more than $12 million on transportation but is reimbursed for only $2 million by the state, Baumstark said. That difference means the district has to pay for transportation out of its operating fund.
Greitens' budget will now be sent to House appropriations committees, where lawmakers will craft what will become the final budget by the end of the legislative session in May.
Missourian reporters Crystal Duan, Andrew Kessel, Daniel Konstantinovic, Thomas Oide, Meg Hilling and Alex Derosier contributed to this article.
Supervising editors are Mark Horvit and Elizabeth Brixey.
What would you like to know about the state budget proposed by Gov. Eric Greitens? Let us know in the comments.