About the President
Points of Pride
A Special Place
Dille Fund for Excellence
President's Remarks & Updates
Vision Task Force
University Reaccreditation 2007
Office of the President
203 Owens Hall
1104 Seventh Ave. S.
Moorhead, MN 56563
Budget and Planning
for 2009 through 2011
Presidentís Briefing DRAFT
January 9, 2009
Since my last budget briefing in
September, much has happened. The state of Minnesota has had a revenue
shortfall, which was magnified by challenges in the national economy. We
have had a mid-year base budget cut (i.e., unalottment). Due to the
stateís revenue shortfall, we are anticipating a substantial base budget
cut for the biennium beginning in 2010. These cuts come on top of our
existing structural deficit, which we have discussed in
). The Trustees have announced their intent to keep tuition increases
relatively low, thus limiting the use of tuition revenue to compensate
for base cuts.
At this point, we are looking at
a probable base budget cut of at least 14.2% over the next few years.
This figure includes a decrease in the current yearís revenue due to a
slight full year equivalent enrollment decline (1%), the recent
unallotment (1.39%), the structural deficit (adjusted lower by decreases
in health insurance and energy costs; 4.2%), and the biennial budget
reduction (8.27%). The resultant budget at the end of 2011 will be
approximately $9.2 million less than it was at the beginning of 2009. We
will go from $64.8 million currently to $55.6 million.
Maintaining enrollment has become an increased challenge. We have seen a
decrease in the traditional-aged college population in our region
coupled with increased regional competition.
these budget challenges, we must remember that we have a great
university. We have made good progress on our identity and vision;
articulated our points of pride (http://web.mnstate.edu/pointsofpride/
); and increased our local and regional visibility. Proudly, we offer
our students a private quality education at a public university. With
the current economic challenges of the nation, what we offer is more
important than ever. As a community, we will work together to bring our
university through these economically challenging times.
The magnitude of the required base cuts means that we will need to stop
doing some things and do others differently or more efficiently. As we
evolve to this new level of operation, we will need to keep in mind the
following three guiding principles.
- We are an educational institution. Therefore, our
primary priority must be service to our students. They must continue
to receive a high quality education without any extension of their
time to degree.
- We must care for our people. Our new level of
operation will have fewer employees. We hope to accomplish this
reduction in level by attrition. If that is not sufficient, we will
work with the bargaining units to try to lessen the personal impact
of any cuts.
- We are a community and will continue to work
together in transparency and collaboration. Monthly meetings with
bargaining units will continue as will periodic town meetings.
Members of the Cabinet and I welcome questions and concerns at any
A Word about Base Budgets
A base budget cut means an ongoing reduction of the overall size of the
university budget. As we have discussed previously, our base budget
comes from the state appropriation along with tuition and fee revenue.
The state appropriation is distributed according to a formula that
relates to our relative share of the systemís enrollment as well as our
own patterns of performance and expenditures. Our share of the
appropriation is decreasing because enrollment throughout the state has
increased while our enrollment has decreased slightly.
Although we continue efforts to increase revenue, we
must decrease our base expenditures. This means that we must decrease
ongoing personnel and operating expenses.
Following is my current plan for our budget challenge and future
development. This plan will continue to evolve as I continue to work
with the Cabinet, the bargaining unit leaders, and the Chancellor and
- In the near term, we will decrease
- Early in the fall, we implemented a hiring
freeze, with few, presidential approved, exceptions.
- Recently, we added purchasing approvals
required from vice presidents and deans.
- Currently, we are reviewing the
recommendations of the energy task force for additional savings.
- We are working to increase revenue.
- We have focused on marketing to increase
enrollment as well as student support to increase retention. The
proposed first year living-learning communities will help in
both marketing and retention.
- The summer session task force is working to
increase net revenue.
- The recommendations of the tuition and fee
structure task force, if adopted, will help to increase revenue
while also decreasing total student debt load.
- The vision task force is making good progress. We
will have a vision statement along with a revised or reaffirmed
mission statement before the end of the current semester. These
statements will lay the foundation for strategic planning during the
- We will examine longer term strategies for
decreasing base spending.
- I will work with the bargaining units and the
Cabinet to explore various ways to reduce personnel costs
through early retirement incentives for base reduction and
furloughs for short term savings.
- Even as we cut budgets, we must strategically
invest in our future. To do this, we must carefully review all of
our programs and develop clear and transparent processes for future
- Working with the Cabinet, bargaining unit
leaders, and the campus community, we will develop a plan for
review of all academic and non-academic programs (see e.g.,
Dickeson, 1999). The information from this review will be used
in the strategic planning process. It will also inform the
annual prioritization of potential ongoing expenditures. If we
have not achieved sufficient base reduction through the above
measures, we will also work with the bargaining units and campus
community to use this information to guide program reduction.
- We will work together to develop processes
for involving bargaining units in making recommendations for
prioritization of potential ongoing expenditures within their
units. Such work has already begun with the Faculty Association.