Murray State University faces a $7.2 million budget shortfall this fiscal year. Vice President for Finance and Administration Jackie Dudley shared the numbers at a Board of Regents meeting on Friday.
The shortfall is due to tuition revenue decline, she said. This is a decline from what the budget had projected. Preliminary spring enrollment numbers show a 4.6% decline from the previous year.
However, Dudley noted contingency funds set aside to offset this $7.2 million. She said There is a $2 million contingency in the budget already approved for the current year. There is also a $1.1 million pension contingency designed to help with pension challenges.
She added that a review of unfilled positions and other expenditures could yield more savings. "We hope those efforts in saving on general fund expenditures help us with the shortfall that's expected," Dudley said.
She also noted a more than $400,000 rescission on state appropriation on top of the expected shortfall. She said the university will be challenged with implementing ways to address this issue on a recurring basis. She also noted a pension liability increase coming June 30.
There is a chance to break even this year, she said, but told to board to be prepared for some shortfall of around 'a couple million.'
"We knew it was going be a tough year, fiscally speaking," President Bob Davies said, noting challenges at the state level with pension reform, tax reform and the biennial budget. He mentioned the 'hiring pause' implemented at the beginning of the year and the discussion in November with regard to budget considerations that involved possible outsourcing. He said a budget planning committee meets on a regular basis. In addition, vice presidents have begun plans to make reductions and to create savings accounts.
Davies said decisions at the state level still pose some uncertainties for the university's next budget. He described the university's focus on four key areas: enrollment, investment in faculty and staff, revenue and cost avoidance strategies and regulatory and life safety. While not committing to a cost-of-living adjustment at this time, he said in 'difficult times,' actions like COLA increases should not be overlooked (a 1% increase would cost between $860,000-$1,000,000).
The board discussed outsourcing Health Services and Dining Services. Davies said outsourcing is not something he wanted to do but felt it's something that must be considered. He said his mindset has shifted on this matter from 'finding ways to save jobs at Murray State' to 'finding ways to preserve individuals remaining in the community and stay employed in positions that support Murray State.'
"We are a public university but we are becoming more and more privatized," Davies said, of reductions in state funding and an increase in the amount of state appropriation going towards increasing pension liabilities.
In addition to possible outsourcing, the university is conducting an 'extensive' academic program review. As to when faculty and staff would be notified of any changes, Davies said the process involves Human Resources and that university officials are trying to be "diligent and humane."
The board also discussed a need to address infrastructure issues. Regent Chair Stephen Williams said these projects (electrical grid, heating/cooling, etc.) have been put off as long as they can be lest there run a 'high risk' of probability that something could go wrong. Regent Don Tharpe said, since the board has been made aware of these issues in past meetings, if they didn't take action and if a catastrophic scenario should occur then they could be seen as 'derelict in their duty.' A request for capital asset preservation is making its way through Frankfort. Access to this funding would require a match from the university.
Watch the meeting:
