Plunging enrollment creates budget shortage at University of Missouri

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COLUMBIA – Interim Chancellor Hank Foley sent a letter to faculty and staff Wednesday, projecting a significant budget shortfall for next year's budget starting in July.

Foley said it was “due to an unexpected sharp decline in first-year enrollments and student retention this coming fall.”

“I wish I had better news,” he said.

An approximate $32 million budget gap is possible for next year, Foley said.

He anticipates 1,500 fewer students enrolling next fall compared to current freshman enrollment.

State budget appropriations could be reduced by $7.6 million or more system-wide, Foley said.

“We at MU would probably bear a significant percent of the system reduction in order to maintain treasury, legal counsel, benefits administration and other services system administers,” he said

Foley said a number of short-term and long-term initiatives and projects are underway to offset the declines in first-time students.

“We are reaching out to admitted students who have not yet enrolled and to their parents with phone calls, Skype calls, videos and a text campaign,” Foley said.

The University is in the process of adding more out-of-state recruiters and admissions faculty is making sure admissions materials meet the expectations and needs of prospective students, he said.

Foley addressed tuition increases in the letter as well. He said the Board of Curators would have to approve a higher tuition increase since it is limited to the Consumer Price Index. Last year the CPI was .7% and if the board approved an increase, it would only account for an extra $2 million in new revenues.

Looking to other options to make up the shortfall, Foley has imposed a cut of 5% to general funding, leaving the university still $10 million short of a balanced budget. The university will also implement a hiring freeze for all units on campus unless absolutely necessary. Foley also said raises will end for the budget year but promotional increases for faculty will still be provided.  

Dr. Angela Speck, an MU professor and Executive Committee member of the MU Faculty Council, said the cuts were expected.

“We didn’t know how bad it was going to be, but we kind of had it on our radar, so it wasn’t an entire surprise,” Speck said. 

She said MU administration has been helpful and open with the Faculty Council about the budgeting issues. However, continued communication is vital. 

“If administration does it without faculty, then that’s a problem. But faculty need to understand that we have to play a part in this. If the money’s not there, we have to find a way to survive without it," Speck said.

However, in terms of preparing for falling enrollment numbers, she said the administration failed to prepare for something it should've anticipated. 

“The issue of the drop in number of students in that age range, we knew this was coming, and yet we’ve been building up and building up," Speck said. 

She also said getting out of the hole will have to happen with the help of Missouri legislators. 

“We’re going to need their support in order to not do serious damage to the institution," Speck said. "I think we have the support of our local legislators, but I would say that in general I would say they are not being very good to us.” 

Speck also wanted to clear up one misconception concerning why the budget issues have taken place. 

"People will think we brought this on ourselves because of the protests last semester, this is mostly not to do with that,” Speck said. 

The UM System released this statement: 

"The UM System has been reviewing potential budget scenarios and preparing a variety of options. As currently proposed, a reduction to the system budget could have a number of impacts on campus budgets as critical, centralized functions performed at the system offices would have to be funded or replicated at the campuses.  In the meantime, we will continue to work closely with our state legislators as they determine our appropriation, and are committed to doing so by being accountable, transparent, and fiscally responsible in our leadership and our actions."

 

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