Faced with a 4.5% reduction in state funding, Murray State University officials are considering a set of proposals to raise tuition while reducing budgets.
Earlier this month, Gov. Matt Bevin signed an executive order to cut state spending to state higher ed institutions by 2% for the current fiscal year, a move that will be contested in a lawsuit by the state Attorney General.
Speaking during a town hall discussion in MSU’s Alexander Hall (Thursday), President Bob Davies says the university still has to respond to the 4.5 percent state cuts in higher-ed funding in the General Assembly’s upcoming 2-year spending plan.
“One of the things that we will be talking about more is having a tuition increase, that will add approximately $3 million in new revenues to Murray State university," said Davies. "So what we’re looking at is $6.1 million in reductions or changes that we must make, that roughly estimates to about 4.8 percent of our expendable amount."
Western Kentucky University and Eastern Kentucky Universities plan to reduce their budgets by $6 million in the next fiscal year while increasing tuition and fees. Davies says MSU will look to do the same – cut about $6.1M from the budget.
“Are we all handling it exactly the same? No," said Davies. "We’re different universities, we’re in different places, we have different fiscal foundations, different enrollment projections, desires, different tuition levels. But by and large, we are in the same predicament and we are handling it the same.”
State universities also face the possibility of the Kentucky Council on Post-Secondary Education adopting a new performance-based funding model starting in 2018, under which higher ed institutions will compete for 5% of state funding, which grows to 25% in 2020.
At the meeting, Davies introduced a pair of tuition increase proposals currently under consideration: one would see a 4.5 percent increase on tuition and mandatory fees while only charging for the first 12 credit hours and 16 and above. The other option would see a 5 percent increase on tuition and mandatory fees while keeping the current model of up to 15 credit hours free.
Along with the state funding cut, MSU faces a decline in enrollment, lower freshmen retention rates (currently 72%), reduced commitment numbers of international students, increase contributions to the state pensions system as well as aiming to increase faculty salary and staff wages.
"So even in this time when we're talking about reductions, we are talking about salary increases as well," said Davies. "We cannot continue to lose sight of the salary compression and the salary issues and the declining purchasing power. So one of the things that we are adding in to our budget scenarios is across the board salary increases."
At the same time, the university is considering cutting some 50 full-time equivalent positions to meet the remainder of the budget reduction requirements.
"A overall majority of which are vacant... but around 17 to 20 are filled positions," said Davies. "No faculty, no tenure-tracked faculty are on that list. But there are vacancies and that is a large number when we think about the budget of Murray State University where about 80% of our budget is people. In dealing with a $6.1 million budget reduction, this is not something that is necessary to be unexpected. We will be going through the process of seeing if those are the right positions, but we've got to be strategic, mindful and we've got to be working together."
Several staff members will also be moving to 9, 10 or 11-month contracts as well as reductions to adjunct, overload, temporary and student workers. The final estimated salary savings of the move is expected to be around $4.3M. The university also looks to make up around $1.6M in non-salary allocations such as supplies and travel expenses as well as a parking permit fee increase.
Davies also indicated that a comprehensive budget plan would include the auxiliary and athletic programs.
"As I walk across the campus, two things kept on popping up: 'Is auxiliary being part of the game?' Yes they are. 'Is athletics being part of the game?' Yes there are. Those are two specific things that have been asked of me, I'm not going into the details of how those are being handled, but be assured as I've said before... everything is on the table."
The timeline ahead:
- April 28 - Executive Team prepares recommendations on FY17 budget for the President
- May 13 - Special Board of Regents meeting to approve tuition and mandatory fee rates
- May 16 - Finalize FY17 budget to present to Board of Regents, notification of reductions
- June 3 - CPE Board approves tuition and mandatory fee rates
- June 10 - Regular BoR meeting to approve final budget