Dissecting the university budget

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One of the more complex workings of a public university is its operating and capital budget. In November 2009, Central Michigan Life began to dissect CMU’s operating budget — How it works, where students’ tuition money is funneled, who decides how much money is allocated to each of the 10 academic departments, etc. Most recently, budgetary precautions have stretched across the entire university to counteract the threat of decreased state funding and lower incoming-freshmen rates.

Gov. Rick Snyder allocated $61,431,100 to CMU for the 2011-12 school year in his February 2011 budget proposal, effectively cutting state appropriations by 23.3 percent from the 2010-11 school year when CMU received $80,132,000.

CMU could receive $6,677,800 in additional funding from a tuition incentive grant if tuition is not raised by 7.1 percent or more. University President George Ross said during a March 17 interview with the CM Life Editorial Board that tuition will not be raised higher than 7.1 percent, though a modest increase is possible.

Ross previously approved a 2.065 percent increase in tuition for the 2010-11 school year following a 2.8 percent cut in state appropriations from 2009-10 levels. CMU ranks above the national median for tuition rates.

Rep. Kevin Cotter, R-Mount Pleasant, who serves on the appropriations committee and sub-committee on higher education, said he likes the incentive. He said representatives are hearing testimony from university officials and aim to pass a budget by May 31.

The latest from Central Michigan Life

‘Modest’ increase in tuition slated for 2011-12 University President George Ross says CMU will likely see an increase this year to accommodate any cuts in state appropriated higher education funds.March 21, 2011

All the coverage

Gov. Rick Snyder proposed state appropriations to state universities, slating CMU for a 23.3 percent decrease — the most of any other school. University President George Ross said it is the greatest drop in state funding among Michigan’s public universities.Feb. 24, 2011

The deadline for a survey of academic programs for the academic prioritization process has been changed to June and may not ultimately be completed until the fall. Provost Gary Shapiro said his final decisions will be made during the summer. Dec. 3, 2010

The Union of Teaching Faculty prepared documentation concerning the financial status of the university to share with the public prior to discussing wages, benefits and working conditions with administrators in December to inform the campus community of their challenges. The Faculty Association argued at the first closed session of the semester “the university can ‘afford to pay increases and benefits to its hard-working and dedicated employees without suffering financial ruin.’” Negotiations with two other labor union groups during summer and fall 2010 resulted in zero pay raises. Dec. 3, 2010

CMU’s roughly 350 programs will be evaluated in the first-ever academic prioritization process, in which an advisory committee for each college will look at their programs and prioritize them in one of five categories. Programs will either receive more money, have their funding maintained or will be cut. Nov. 19, 2010

CMU’s deferred maintenance fund received a $200,000 increase than previous years following board approval, taking it to the $5.7 million level. University officials say the budget is higher than other schools, but “(t)he needs are always greater than the funding.” Nov. 12, 2010

On average, 54.5 percent of revenue generated by the six colleges at CMU is transferred out of their budgets to fund non-revenue generating entities on campus. The assessment rate, which determines how much money each college must transfer out, will be re-evaluated this year. Nov. 5, 2010

Nearly a quarter of the available university reserves will be used on construction projects until the 2012-13 academic year, according to the capital budget. CMU has $30 million in restricted expendable net assets and $228.3 million in unrestricted net assets as of June 30, 2010, according to the university’s audited financial statements. An estimated $62,440,816 was allocated from university reserves to finance restricted projects, including the Events Center, College of Medicine, Ronan Hall and Bovee University Center renovations. Oct. 18, 2010

CMU allocated $250,000 to create 100 new jobs through Work Study. Ross said while the number of Work Study jobs available to students on campus remains the same as last year, the number of jobs available in the community have decreased. University reserves will fund the costs necessary for creating jobs. Oct. 11, 2010

A total of $13,810,306 went into CMU’s debt service, which is the combined amount of principal and interest allocated each year to pay debt. According to the university’s audited financial statements, this is more than it did 10 years ago. In the 1999-2000 academic year, the figure was 2.3 percent; the total was 3.7 percent in 2009-10. Oct. 8, 2010

CMU lost $2.3 million in state allocations after the Michigan legislature approved a 2.8 percent decrease in higher education funding. The university received $80,132,000 for the 2010-11 school year — a loss of $2,304,000 from 2009-10. Sept. 29, 2010

CMU’s long-term bond debt has dropped nearly $30 million since 2008. The university has an accumulated $160,681,655 bond debt for campus projects as of June 30. It would take until 2036 to pay off the current bond debt if no additional borrowing takes place, which university officials say is unlikely. Sept. 27, 2010

CMU office professionals voted 5-1 in favor of a proposed contract that froze wage and benefit increases for at least the first of three years. The terms of the agreement mean CMU’s 340 office professional staff can receive an increase the second and third year of the contract, determined by the wages of professional and administrative staff. Sept. 17, 2010

The Leadership Institute’s half-time office professional was cut as a results of campus programming funding cuts, though it has not experienced a reduction in funding from state appropriations. Money saved will be funneled into scholarships and financial aid. Sept. 3, 2010

Ross announced at a student forum that the Leadership Institute would remain funded next year. He said while the staff is unknown, after discussions with LI Interim Director Dan Gaken and Dean of Students Bruce Roscoe. April 25, 2010

Senior officers’ and professional and administrative staff pay will be frozen during the 2010-11 school year, according to the P&A Communicator. The freeze would affect about 700 employees. April 23, 2010

Eastern Michigan University Regents voted to not raise tuition for the fall at its April 20 meeting, the first time tuition had not been raised in the state since the 1980s. CMU officials responded to the decision by stating that CMU’s budget situation was its own and would not be affected by EMU’s decision. April 23, 2010

Ross announced on April 8 that he would hold his first budget forum at 3 p.m. April 26 in the Bovee University Center Auditorium. Those not able to attend the forum will be able to do so via a webcast. The e-mail also contained a suggestion box for people to submit topic recommendations and commentary to Ross. April 9, 2010

Another suggestion made to the SSBAG involved a two-tiered tuition program, which would decrease the cost for 100- and 200-level courses. Interim Provost Gary Shapiro said this move would not likely happen, as “budget implications would be very negative” for the university. March 22, 2010

Another suggestion made to the SSBAG was a tiered parking rate for students. While the SSBAG responded with “under consideration,” Police Chief Bill Yeagley said there was no “serious discussion” regarding changing the policy. March 15, 2010

Ross spoke at the Michigan Senate Higher Education Appropriations Subcommittee March 8 at Ferris State University in Big Rapids and spoke to legislators about funding issues CMU is having. He reiterated the fact that CMU is receiving the same amount of funding now than what it received in 1999, while cutting almost $30 million from its budget since 2003. March 8, 2010

Newly-appointed University President George Ross first addressed the budget crisis at the March 2 Academic Senate meeting. He said he does not want to make cuts immediately because it may have a negative consequence on the university’s future. He said he does not have much experience with the budget, but will deal with issues as they come up. March 2, 2010

CMU’s Leadership Institute will “most likely” face a budget cut or removal after one suggestion submitted to the SSBAG called for a budget reduction or removal. The SSBAG responded by saying, “This likely will occur as a result of the recent retirement of the director and the call for budget reductions.” March 1, 2010

The SSBAG recommendations were posted online the evening of Feb. 25. The committee compiled responses according to department and came with short responses from the SSBAG on the recommendations. Included were 20 responses saying the College of Medicine should be pushed back or removed from the budget. The SSBAG countered with the statement, “Board of Trustees authorized the start of the College of Medicine in 2009.” Feb. 26, 2010

CMU held a budget forum Feb. 23 for the public to hear how the budgetary process works and to come and ask questions. It was revealed that there was $595,000 CMU had been holding for one-time administrative raises. Wilbur said she expected more questions, as only three were asked at the end of the presentation, despite 2/3′s of the UC Auditorium full and about 175 participating via the Internet. Feb. 24, 2010

Wilbur did not release her recommendations for budget cuts to the Board of Trustees on Feb.18 like she had originally planned. She said it was “not appropriate at this time,” and said she plans to wait until President-designate George Ross begins March 1. Feb. 19, 2010

One way CMU tries to conserve funding is through a “green” budget. The university has attempted since 2007 to be more “environmentally aware,” and has taken measures such as energy reduction and made its residential restaurants trayless, eliminating thousands of dollars in water expenses. Feb. 15, 2010

CM Life made a Freedom of Information Act request for the more than 120 SSBAG budget suggestions and was denied because CMU deemed that “The public interest in encouraging such challenging and deliberative discussions clearly outweighs the public interest in disclosure of preliminary recommendations intended to inform later determinations.” CM Life also requested each department’s budget suggestions made, but was also denied. Feb. 12, 2010

Two departments wary of cuts are the math and writing centers. Because 10 percent of students utilize these centers and the low number of positions, the impact could be greater, said Mary Ann Crawford, director of the writing center. Feb. 3, 2010

Not all departments on campus generate revenue. But Residences and Auxiliary Services do. CM Life examines the revenue-generating department and how money is distributed and made through offices such as ProfEd, parking services and the CMU Bookstore. Jan. 22, 2010

Wilbur said she is looking to hold a campus-wide budget meeting by the end of February to discuss budget planning with faculty, staff and students. By the Feb. 18 Board of Trustees meeting, she said, CMU should have a better idea of the budget situation. Jan. 20, 2010

Wilbur unleashes the plan to cut the university budget on Jan. 13, 2010. She calls for departments and offices to prepare budget reductions between 3 and 9 percent. Associate vice president of residences and auxiliary services John Fisher said if cuts are made between 6 and 9 percent, layoffs could take place. Jan. 13, 2010

Stimulus funds curb additional budget cuts at CMU: CMU received $1,379,973 of the $787 billion stimulus package approved by the United State Government in February. According to the Web site recovery.gov, the funding created 16 new positions at CMU. The university, however, was not sure the funding created new jobs, because it always receives Federal Work Study Funding. Dec. 4, 2009

CMU budget advisory Web site has no planned end date: More than 100 suggestions were made to the SSBAG by Nov. 2, 2009, said Vice President of Finance and Administrative Services. The SSBAG said the Web site would not have a scheduled deadline for people to submit budget reduction ideas. Nov. 11, 2009

Where is your tuition going? CMU’s budget at a glance: CM Life begins its examination on the operating budget by breaking down the basics in how to explain the way CMU spends its money. Nov. 11, 2009

Friday deadline for students, faculty to suggest CMU 2010-11 budget cuts: On Oct. 16, the SSBAG launched a Web site for students, faculty and staff to suggest items to be reduced or removed from the budget. SSBAG would then consider the recommendations by the suggestions when it came time to cut the budget. Oct. 26, 2009

Layoffs, freezes possible in future: In April, CMU indicated that layoffs and wage freezes could be a possibility with the lack of funding. Because of federal stimulus dollars, CMU would not be affected too much in 2009, but future years were still uncertain. May 20, 2009

Links

SSBAG budget suggestion Web site

Capital Budgets, 1999-2010

Operating Budgets, 1999-2010