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Thu December 4, 2008
MSU Sends List of Proposed Cuts to Govenor
By Chad Lampe
Murray, KY – Murray State officials sent a list of proposed spending cuts totaling 2-point-1 million dollars to Governor Steve Beshear today. MSU officials plan to pay the proposed 4 percent rescission in state appropriations with reserve funds. But administrators are also bracing for the possibility of a permanent 4 percent reduction in state funding. MSU Assistant Vice President of Communications Catherine Sivills says the list of proposed reductions is preliminary and should be considered a planning document. Among other things, those cuts include 15 faculty positions, and the elimination of a potential 1 percent raise for faculty and staff. Below is the press release from Murray State detailing the proposed cuts.
IMPACT STATEMENT ON PROSPECTIVE
MURRAY STATE UNIVERSITY
4 % Mid-Year Rescission
Murray State University's strategy for coping with a mid-year rescission would be to use funding reserves to cover the prospective $2,117,700 shortfall. We regard this as the least disruptive approach given that the budget year is nearly half over. The use of operating unit reserves for both academic and non-academic areas will still have adverse programmatic impacts as they are typically used to cover extra expenses not part of the recurring base budget. These cuts will require a reduction in instructional technology upgrades and other departmental equipment purchases as well as reduced funding for faculty professional development. Newly implemented recruitment and retention initiatives will also be affected. Murray State recently reorganized its recruitment and retention area to better employ institutional resources in pursuing the objective of increasing enrollment to 12,000 by 2012. Travel to high schools in our regional area to engage with prospective students, a key element of the new recruitment strategy, will have to be reduced as will funding for marketing the university, which is also an important component of successful recruitment.
4% Permanent Budget Reduction
The narrative which follows, outlining how Murray State proposes to handle a 4% permanent reduction in its appropriated funding, should be considered as a preliminary planning document. As the planning process evolves over a longer time frame and more details of the extent of an actual budget cut become known, further discussions with campus constituencies may result in changes to how the budget cuts are ultimately handled.
To successfully absorb the first round of a cumulative 6% cut in its FY 07-08 and FY 08-09 appropriated funds, Murray State carefully pruned programs not considered essential to the core mission. With this second round of cuts, exclusive continuation of that approach will no longer be feasible. Whereas some of the budget reductions will be dealt with centrally, each major area will have to share in absorbing a major portion of these additional prospective cuts. In the midst of this fiscally austere environment, the university is midway through a major transformation of its administrative computing system from a mainframe system to an enterprise resource planning system (ERP). There is no question that a near cumulative permanent 10% cut in the university's appropriated base over a 3-year period will have an adverse impact on operations. Impacts and coping strategies of the major administrative areas are summarized below.
The central administration will use two sources to cover part of the required budget reductions. A budget reserve set aside for a possible 1% salary increase for faculty and staff of approximately $551,000 will be released to help reduce the size of the budget cuts allocated to the main administrative areas. In addition, trust funds consisting of the university's Program of Distinction Telecommunications System Management (TSM), the Action Agenda, Faculty Development and the Breathitt Veterinary Center (BVC) will be reduced proportionately to the amount of the appropriations cut, or approximately $228,500. These reductions in total will amount to about $779,500 or 36.8% of the total required.
The athletic subsidy will be reduced by a combination of operating budget cuts and scholarship reallocations. In addition, the football program will be able to offset a portion of its costs via a permanent increase in guaranteed revenue. Further savings will be realized by eliminating the formal budget for strategic planning initiatives. Anticipated savings are estimated at $123,900.
A permanent 4% cut in general revenue will necessitate the elimination of approximately 15 budgeted faculty positions for an estimated savings of $746,000. These position eliminations will be distributed across all academic colleges of the university to avoid penalizing any particular discipline with regard to sustaining academic quality. Inevitably, individual faculty workloads will increase along with class size. This will adversely impact student advising, research and community outreach engagement by faculty. It will also result in the second year in a row of no raises which could become a major detriment to the career longevity at Murray State of younger faculty. Contingency planning may need to be undertaken to consider the possibility of future program eliminations and the possibility of closing an extended campus. The unavoidable decline in overall academic quality with this magnitude of budget reductions, will eventually begin to affect recruitment efforts.
To avoid cutting too deeply into the university's recruitment and retention initiatives, other areas of Student Affairs will have to absorb budget reductions. Some of the savings will come from salary reductions in the Student Financial Aid/Scholarships area resulting from retirements and reorganization. Additional savings will come from the restructuring of the Counselor/Coordinator of First-Year Experience program. Positions will also be reduced from the reduced operations of the university postal services. Estimated savings equal approximately $72,800.
Finance and Administrative Services
To maintain overall critical functionality, budget cuts will be absorbed in a number of areas. The allocation of budget reductions is designed to minimize the impact on the continuing implementation of the new ERP system. The main reductions will be in salary savings, operations, cancellation of maintenance contracts, travel and training and overtime. Estimated savings equal approximately $351,900.
Institutional Advancement will make budget reductions in a number of service areas. The cuts will be a combination of salary reduction, operations, and travel. Anticipated savings equal approximately $43,000.
The plan detailed above to minimize the impact of a 4% recurring cut in appropriations will provide a viable continuation of current operations at a bare bones level. However, it will impede our current efforts to stay on track in reaching our Double the Numbers objective. There is no allowance for salary increases for the second year in a row and, on top of the budget reductions summarized above, the university will still have to cover increasing fixed costs of approximately $1 million.