Murray State University Details Budget Shortfall
Murray State University is facing a total estimated loss of $7.3 million for the current fiscal year ending June 30 related to coronavirus impacts, according to projections shared during the April 24 special-called Board of Regents meeting. Administrators said a current plan should cover the current deficit, yet some expressed concern with the next fiscal year’s potential deficit.
Vice President of Finance and Administrative Services Jackie Dudley said the projected $2.6 million in savings from the temporary university shutdown, combined with $3.1 million in federal CARES Act funding, means the university should only have to pull about $1.5 million dollars out of savings (reserves) to cover the total projected deficit.
Dudley said the savings from the temporary university shutdown is the result of a number of factors including the ban on travel, utilities savings while the buildings are mostly empty and in office supplies as employees working remotely are relying on electronic communication methods.
Dudley said a few of the challenges facing the upcoming fiscal year (FY21), which begins July 1, include a projected 25% decrease in international student enrollment and an increase of approximately $275,000 in costs for premium liability insurance.
She said current predictions indicate the university could save as much as $1.5 million in salaries and fringe benefits if it doesn’t fill vacant employment positions.
Dudley said she will be ready to present a more finalized version of a FY21 budget to the board during June’s meeting.
MSU President Bob Jackson said 71% of the university’s budget is enrollment-driven, and while projections for international students enrolling in the fall has taken a hit, recruitment and retention reports are trending in a positive direction.
Vice President for Student Affairs Don Robertson said summer course enrollment is up, and fall 2020 enrollment a this point is only about 15 students short of fall 2019. He said there will also be an increased number of graduate students with the launch of five new academic partnership programs, but data regarding the programs isn’t yet complete and available because enrollment isn't complete yet. Overall, administrators believe enrollment is trending upward.
“When we get into fiscal year 21 I don’t anticipate widespread furloughs like UofL and UK but we will have to make strategic decisions,” he said. “Will it impact people, yes. Will it be mass furloughs, no.”
In other business:
The board voted on three action items: they voted unanimously to keep the tuition and mandatory fee rates the same for the upcoming school year (no increase); the majority of the board voted for an increase in both the housing and dining rates (Regents Trey Book and Melony Shemberger voted against the increase on both measures). The increase in housing rates is earmarked for replacing and maintaining equipment (such as furniture in the dorms), and the increase in dining rates was required based on contracts with outside food vendors.
The board learned it now has until Dec. 31, 2020, to decide whether or not the university will continue to participate in the KERS (Kentucky Employees Retirement System). Initially, the board was tasked with making that decision by the end of April 2020, but the coronavirus pandemic pushed the deadline and resulted in a freeze of the university’s contribution rate. Jackson said although the board now has more time to consider and weigh options, he doesn’t see how the university could afford to opt out. He said the current options on the table for the university to buyout include: buying out in one lump sum for $108 million, or financing the buy-out for $162 million over a 30-year period. He said that kind of debt “would be crippling” for the university.
The university is finalizing an application process for students who need financial assistance made available by the recent federal CARES Act. Dudley said the university was awarded approximately $6.2 million, and half is dedicated to students. She said the U.S. Department of Education issued guidelines which are both “flexible and stringent.” She said the target recipients are those who qualify for Pell grants, which make up approximately 34% of the student body. The university doesn’t want to leave out any student who needs the help, she said, so a committee will oversee the applications and requests and she said they hope to roll out more details by the end of next week.
The board wished farewell to Board Chair Dan Kemp who will resign effective May 15, six weeks ahead of the end of his term. A press release issued by the university said the board was out of compliance regarding political registration. The release said that led to Kemp’s decision to resign early and the state senate confirmation of Regent Leon Owens, who has served on the board since August of 2019. The move leaves one vacancy, which will be filled by Gov. Andy Beshear. Board policy mandates current board vice chair Jerry Rhoads will become board chair starting May 15. Jackson thanked Kemp for six years of dedication serving on the board and said, “We appreciate you and your service and your friendship.” Jackson said the board will host a more fitting send-off when they’re able to gather in person again.
This article originally included a note about the university's state performance funding model but has since been removed.