UMC Administrators Work on Budget After State Cuts

University of Missouri leaders working on response to state budget cuts

By Rudi Keller, Columbia Daily Tribune January 19, 2017

University of Missouri administrators are considering ways to close the budget hole created by new state withholdings but haven’t reached any decisions, interim MU Chancellor Hank Foley wrote in an email distributed Wednesday to faculty and staff.

MU lost almost $20 million in state support Monday when Gov. Eric Greitens announced he was withholding $146.4 million in general revenue spending, including $83.8 million from college and university budgets. The MU cut includes $13.7 million from operating funds, $4 million to expand School of Medicine programs in Springfield and $2 million for extension programs.

“I am writing to let you know that the senior leaders of the campus are working on this challenge and discussing ways to best fill this gap before the end of the fiscal year,” Foley wrote. “As soon as we have a plan, we will share it broadly and transparently.”

Greitens’ action Monday will reduce state funding for the UM System administration by $789,000 on top of a $3.8 million cut imposed by lawmakers. Interim President Mike Middleton has not decided how to spread out the system cuts, spokesman John Fougere wrote in an email Wednesday.

The withholding took away a budgeted $9 million boost in state aid for MU, part of a $17.9 million increase for the university system. MU and the other campuses will receive less in state support than in the 2015-16 school year. Greitens’ withholding also will take $3.9 million from Missouri University of Science and Technology in Rolla, $4.8 million from the University of Missouri-St. Louis and $5.7 million from the University of Missouri-Kansas City.

Ongoing state revenue shortfalls make further cuts likely and will push costs onto students, state Rep. Kip Kendrick said in a news release about legislation to control student debt. Kendrick, D-Columbia, blamed the cuts on tax reductions enacted by the Republican majority.

“We’ve seen special-interest tax cuts make it all but impossible to fund our state’s critical needs and top priorities. Make no mistake, these budget cuts will ultimately mean higher tuition and increased student debt in Missouri,” Kendrick said.

Foley was not immediately available for comment on his email. To close a projected $36.3 million shortfall in tuition revenue for the current year, in March Foley ordered a 5 percent cut in general fund budgets for all campus divisions and told them to expect further cuts in the next two years. That cut, plus small tuition increases for out-of-state and professional students, was designed to cover all but $10 million of the deficit, with the remainder made up from campus reserves. The university did not increase tuition this year for in-state undergraduate students.

The campus imposed a hiring freeze, MU laid off 37 employees and cut an unknown number of part-time adjunct and full-time non-tenured faculty as a result of Foley’s directive.

University officials are closely monitoring indicators for enrollment next year, Foley wrote. This year’s freshman class was more than 20 percent smaller than the incoming class for 2015 and without a strong recovery, overall enrollment at MU is expected to decline for at least two or three years.

About 58 percent of the core operating budget comes from tuition payments, Foley wrote in the email.

“While finances are a challenge, we are hardly alone,” he wrote. “Budget cuts are happening to public higher education institutions across the country. But with challenge comes opportunity, and we are committed to coming together to define that which is essential to our mission.”

Foley promised to keep faculty and staff informed on plans for absorbing the revenue loss. “I know that times of uncertainty can be a cause for anxiety,” he wrote.