CMU to use $6.1 million in reserve accounts to fund 2012-13 operating budget
A shortfall in tuition and state appropriations has forced Central Michigan University to use $6.1 million from reserve accounts to fund next year’s operating budget.
In a meeting Thursday with the CMU Board of Trustees, David Burdette, vice president of finance and administrative services, unveiled the $441 million 2012-13 financial plan that included $6,105,400 from reserve accounts.
This marks the first time in recent memory CMU has had to dip into reserve funds to close a gap in the operating budget. There is currently $8 million in the contingency fund, Burdette said.
The cash infusion, described by University President George Ross as “one-time only dollars,” makes up for a $1 million shortfall in state appropriations and declining enrollment. Michigan Gov. Rick Snyder recommended a 3-percent increase in funding for higher education in February, but legislators passed a bill in June that included $1.4 billion for public universities, a 2.2-percent increase that amounted to $69.5 million for CMU.
Steven Johnson, vice president of enrollment and student services, said during the meeting the university is projecting about 3,500 incoming freshman in the fall, 200 fewer than 2011.
“We made the conscience decision this year to use one-time (funds) to ‘course correct’ because enrollment’s going to be down a little bit this year,” Ross said in a briefing with the media after the meeting. “We’ve been talking about this for years. It’s a reality.”
It’s no secret enrollment among Michigan’s public universities is down. Summer I enrollment at CMU fell 8 percent compared to 2011, and Johnson said the state’s shrinking high school market and competition from other schools — Saginaw Valley State University, Oakland University and Wayne State University, specifically — has forced the university to look out of state for perspective students.
“All of us have been discussing this openly,” Johnson told the board. “We all have very similar challenges as we’re looking at a very different economic market … and it’s causing all of us to step back and reassess how we approach strategy for attracting students to our institution.”
About $345 million was tabbed for the general fund, including $138 million for faculty and staff salaries and another $62.4 million for benefits. The university is allocating $32.6 million for scholarships and financial aid, a general fund increase of about $1 million from the 2011-12 budget. Total university-funded student aid will be $54.6 million, an $8 million increase from 2011-12.
The university anticipates $205.6 million from on-campus tuition and fees, $49.3 million from Global Campus tuition and fees and $14.75 million from department activity. Revenue from student tuition and fees makes up nearly 75 percent of the operating budget
CMU plans to spend $96.4 million on non-general fund items, such as athletics, the Events Center, Parking Services and residences and auxiliary services. Athletics is expected to bring in $6.8 million, an increase from $6.4 million last year, but will receive a $17.1 million subsidy from the university for a total budget of about $24 million.
Other items from the meeting:
*While no capital projects are ongoing, $5.7 million from the capital budget was approved for deferred maintenance projects. Among them include $1 million for infrastructure improvements to Anspach Hall, $820,000 for roof replacement, $450,000 for domestic water pipe replacement and $188,000 for sidewalk repair.
*The board approved $1.6 million from university reserves for a campus facilities master plan, a document addressing capital needs, including building projects and possible future expansion over the next 10 years. The last master plan was conducted in 2001.
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