Academic Senate Budget Committee

Meeting Notes

January 22, 2010

1:37 p.m.

Lewis & Clark Room

 

 

Members Present:

Keith Edgerton

Rakesh Sah

Lorrie Steerey

Sandie Rietz

Kay Streeter

Brian Reed

Liz Tooley

LeAnn Anderson

D’Ann Campbell

Terrie Iverson

Stacy Klippenstein

Shelly Anderson

Gary Gray

Michael Barber

Diane Duin

John Cech

Gary Young

Tasneem Khaleel

Karen Heikel

Mary Susan Fishbaugh

Jane Howell

Kurt Laudicina

Ronald Sexton

Dan Carter

Kirk Lacy

Marsha Sampson

Tyler Harris (student)

Linda Wham

Ken Siebert

Vern Gagnon

 

 

A.  Introduction:  Lorrie Steerey, Committee Chair

 

We all know the state budget is in a bind and we are not the only institution suffering.  In essence, we are broke.  We can complain about what used to be, but it gets us nowhere.  We must work through this process with a positive attitude; we must see it as a way to reinvent ourselves and define ourselves as an urban university.  First and foremost, we have to honor our commitments to students.  We are overworked and we will be asked to do more with less.  We have to do what is best for the University.

 

B.  Review of the Situation:  Ron Sexton, Chancellor

 

In 2009, the Montana legislature had to decide, like every other state, what to do with the federal stimulus funds.  The big concern for the University System is the use of the stimulus funds to backfill general fund money in our budgets.  It amounted to almost $100 million in the University System.  At that time, the state budget looked good, but since then the surplus the state had is now completely wiped out and state revenues continue to drop.  Since that time, the BOR decided there would be a significant cut to our budgets to make up for the difference made by the federal stimulus.  At the November, 2009 BOR meeting, they accepted our plans for those cuts with no discussion whatsoever.

 

Now, the Governor is implementing a 5% cut in state spending.  The Governor cannot tell the BOR what to do, but it is expected next week the BOR will “agree to participate” in the 5% cut, as they did in the 1980s.  The Governor can also cut up to 10% of the state budget without convening a special legislative session.  It is likely the Governor will make the additional 5% in cuts.  He has to decide on the additional 5% by March, which is when a special session decision must be made.  This 10% (total) cut, spread across the University System, amounts to an 18% cut to MSUB’s general funding.

 

The BOR at this time is not discussing or even mentioning a tuition increase.  Chairman Stephen Barrett indicated on Monday that there will be no tuition increases.

 

The Governor has implemented travel restrictions, but at this time MSUB has not.  However, we are asking departments to evaluate the need for travel.  The Leadership Council meeting was scheduled in Helena next week.  It has now been changed to a conference call.  The BOR is also doing more conference calls.

 

There have been discussions on furloughs, changing appointments from 12 months to 10, reduction of fee waiver amounts and the number of fee waivers, and “savings accounts” for excess tuition, but no decisions have been made.  The BOR have not explained anything about how we will go about this process.  The BOR have not sat down with the Presidents and CEOs, as they have in the past, to talk through the budget process.

 

There is nothing out there saying the state revenue will turn around anytime soon.  Most likely we can hope for a state revenue increase starting in 2013 or 2014, but it will be a year or two after that before we see any relief.  However, it’s also unlikely the legislature will increase our funding.  What we, the University System, have been doing and how we do it is not sustainable.  Present law adjustments, which give us increases to compensate for increased costs in health insurance, utilities, etc., will no longer occur.

 

C.  Current FY10 Budget & FY11-12 Budgets:  Liz Tooley, Budget Officer

 

We are currently planning for the worst case scenario because there is just so much we don’t know.  Right now our enrollment is up, so we plan to use the excess to make up the Governor’s 5% cut.  We expect the Governor to ask for another 5% cut in FY11.  Basically, we have to get more students in order to give funding back to the state without getting hurt.  The University of Montana rescission is still a possibility, because their enrollments have been on the rise since 2007.  They may ask for the rescission in FY11, FY12, or it may never happen.

 

Last year Bozeman was allowed to increase their tuition, and MSUB and the other units were to get a portion of that funding to offset a non-increase in tuition.  We received those funds once, but apparently Bozeman will be allowed to keep the tuition increase but no longer distribute the excess funding to the other units.  Dr. Steerey noted that this will be a topic of discussion during President Cruzado’s visit to MSUB next week.

 

Chancellor Sexton noted that our key to making it through the next biennium will be international students.  Those students must come to us from China ready to pay full non-resident tuition.  We are shooting for 40 international students this year, and a goal of 100 next year.  One hundred international students would equal about $1 million in revenue.

 

Ms. Tooley noted that she is working with Dan Carter and Bozeman to set up a Budget Office website to post updates as we learn more.

 

Chancellor Sexton stated that their approach has always been to take a percent cut and spread it across all units evenly as a starting point.  However, no across-the-board cuts are ever made.  Instead, they work together to move as many cuts as possible into Student Affairs, Administrative Affairs, and the Chancellor’s Office, so as to cut as little as possible from academics.

 

Dr. Sexton also noted that the state retirement fund is about $1 billion below the state-mandated minimum.  The Montana legislature is not mandated to give any funding to the University System and we are definitely low on the priority list.

 

This is doable, but it will be painful.  We need flexibility and new ideas to move us in a new direction.

 

 

The next meeting was tentatively scheduled for February 19.

 

 

The meeting was adjourned at 3:35 p.m.

 

Respectfully submitted by Rita J. Rabe Meduna