University makes budget shortfall plans

Base-budget cuts needed for expected 2017-18 deficit

Jan. 26, 2017

Senior officers across campus are leading the way in determining how to make up a $10.6 million budget gap this year and what may be an even larger shortfall in fiscal year 2017-18.

Barrie Wilkes, vice president for finance and administrative services, said in planning to cover the current year's shortfall, service unit leaders and deans are reviewing options such as:

  • Savings from vacant positions and fewer course sections;
  • Delayed expenditures;
  • Use of strategic reserves; and
  • Base-budget reductions.

The shortfall this year is $4.2 million for the colleges and $6.4 million for service centers. State appropriations that are $1.4 million less than expected and a decline of 19,400 student credit hours caused the gap.

Steven Johnson, vice president for enrollment and student services, said a December report from the Western Interstate Commission for Higher Education — a key source for student data — captures the decline in U.S. high school seniors. It shows:

  • fewer high school graduates across the nation each year through 2023;
  • the greatest decline in 2017;
  • the Midwest being hardest hit; and
  • Michigan and New Hampshire having the largest decrease.

"Universities are competing for students more than ever," Johnson said. "We've long said student recruitment is a forever campaign. All of us, together, have managed to keep enrollment high despite the decline in graduating high school seniors."

CMU's freshman class was almost 30 students larger this year than last. Transfers, however, were down more than 200, reflecting precipitous enrollment declines at nearly all Michigan community colleges. Off-campus enrollment, especially face-to-face, also declined by more than 200 students.

Planning for 2017-18

Service and auxiliary units will identify scenarios by March 1 for potential 2017-18 base-budget cuts of 6 percent, 9 percent and 12 percent.

Deans will submit their proposed 2017-18 budgets by June 2, also relying on base-budget decreases. CMU's responsibility centered management model gives colleges ownership of their revenue and expenditures, whereas universities without RCM typically have centralized budgeting managed at the vice-presidential level.

The president's cabinet will review all plans.

 "These will not be across-the-board cuts," Provost Michel Gealt said. "All of us need to identify and protect what's essential for student success and programs that fuel growth, expand the university's reputation or bring in external funding. This is about proactively shaping CMU's future in response to population changes and career growth areas."

The Financial Planning and Budget office will work throughout the next several weeks to forecast next year's tuition revenue based on projected enrollment. Its staff also will forecast state funding and compensation and benefit costs.

Wilkes said revenue data won't be final until after fall semester enrollment counts. He does expect, however, that the shortfall will be as large or larger than this year's. Layoffs are possible, although senior officers are working to avoid or minimize those, he said.

"Michigan's high school graduating classes have been shrinking since 2008-09," Wilkes said. "As tough as these budget adjustments are, CMU remains strong because we are fiscally prudent, continue to be among the state's most affordable public universities, and support the growth of programs that address student and parent demand."