CMU prepared for potential state funding callbacks; Snyder could issue executive order in January

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The university has pooled $5 million in reserves to patch potential budget holes in case newly-elected state lawmakers mandate funding callbacks in January 2011.

Kathy Wilbur, vice president of Government Relations and Public Affairs, said any governor has the authority to issue executive order cuts based on state budget figures.

Gov.-elect Rick Snyder can issue an executive order in January to indicate payments to institutions will be held up, taken away or even cut because of the state’s finances.

“It’s a vehicle governors have when faced with overwhelming budget challenges,” Wilbur said.

If Snyder issues executive order cuts, Wilbur said it will be reviewed by the legislature, which can then either vote to accept the proposal as written or deny it.

“Or they can chose not to take any kind of a vote,” she said, “And if they don’t take a vote, it goes into place anyway.”

David Burdette, vice president of Finance and Administrative Services, said budget reductions will be employed to prevent increasing tuition rates as much as possible if reserves do not cover the shortfall.

“The president has made it very clear,” he said. “We’re not going to budget our way out of the Michigan challenge of the appropriations through tuition increases. That’s when you get into budget reductions.”

In September, the legislature allocated $80,132,000 to Central Michigan University for the new fiscal year, which began Oct. 1. It was a loss of $2,304,000 from 2009-10 funding levels.

Kathy Koch, College of Education and Human Services interim dean, said it’s not a matter of if the state will call back part of the $80,132,000, but when. The problem with using cash from reserves to handle fund callbacks is that it’s a one-time fix, she said.

“If the state says, ‘We’re not going to fund you at this level anymore,’ that is going to eat into our base funding because some of our base funding comes from the state,” she said. “To the extent that base funding is affected, this is an ongoing kind of thing and there’s where the real crunch is going to come.”

She said the university is always thinking about state cuts, which is why they have been conservative in assigning resources. Koch said the EHS college will be prepared for callbacks unless the amount taken away is an unanticipated “astronomical amount.”

She said the threat of lost-funds forces the university as a whole to go to a new level of efficiency.

“I think we’re doing pretty good right now,” she said. “But whenever you have to cut funding, you have to find ways to do what you’ve been doing in a different way and hopefully, we don’t sacrifice the quality of services that we have.”

Salma Ghanem, dean of the College of Communication and Fine Arts, said the colleges are already “lean” and don’t frivolously spend money.

“We are extremely lean so budget cuts will hurt,” Ghanem said, “but it’s amazing how resilient departments and colleges can be and I think the university wants to ensure that nothing will affect the academic side of things.”