University President Michael Rao and university vice presidents are in the process of reviewing a budget reduction proposal, addressing $14 million in reduced expenditures.

Anticipated cuts to higher education appropriations and increased costs amount to roughly $21.5 million — and after $14 million in reductions, the university is still left with $7.5 million to cover.

The most logical solution is an increase in tuition, which currently is $133.05 per credit hour for undergraduate students. A 10-percent increase in tuition would raise the price of a credit hour to $146.30 — generating approximately $3 million. A 20-percent increase would generate more than $6 million.

Mike Silverthorn, executive director of News Services for Public Relations and Marketing, said tuition and other options could help offset the $7.5 million.

“Everything is speculation now; there hasn’t been a lot of talk yet about tuition. As we get closer to the board meeting, maybe there will be some numbers,” he said.

A tuition increase would add to a 7.2-percent increase in room and board rates, which the Board of Trustees approved at its April 24 meeting. Michigan State University also is expected to increase tuition by 10 percent, according to the Lansing State Journal.

The House of Representatives approved the higher education appropriations bill in May. This bill calls for CMU to receive less of an appropriation reduction than the Governor’s proposed executive budget. CMU’s cut would equal 5.74 percent, which would save the university approximately $864,000 from the executive budget recommendation of 6.74 percent.

As part of the reduction proposal from the Senior Staff Budget Advisory Group, formal layoff notices will be distributed today, with a little more than one week before the June 13 early retirement incentive deadline.

“We are in the process of notifying people who are affected by the layoffs,” Rao said. “(The early retirement incentive) isn’t finalized until the 13th, so it’s a moving target until then.”

A press release issued Tuesday stated 57 employees received informal notices of layoffs and an additional 12 employees will be affected by the university’s bumping process. Of the 69 employees affected, 15 will move into comparable vacant positions, 26 will be reduced to less than full time or be at a lower pay level, 19 will be formally laid off and nine will have employment changes delayed until July 2004.

In his Presidential Update #32, Rao said there will be concerns and issues on the part of individuals or advocacy groups.

“This is quite natural, since there legitimately may be a reason not to make almost any reduction. I request your support in ensuring that any discussion of these reductions be based in fact, civil and not hurtful to those affected or CMU,” he said on his Web site, www.cmich.edu/president/update32.html. “It will be important that the university community move forward into the coming academic year, particularly in light of the involvement of BRAC, the senior staff budget advisory group, the involvement of the university community in forums, and in consideration of the closed manner in which personnel reductions must be decided in order to protect individuals affected.”

The Board of Trustees is expected to present a balanced budget at its July 10 meeting.