Budget plans in review for fiscal year 2017-18

Decisions should be ready in late April; layoffs likely

March 14, 2017

Central Michigan University's financial team, cabinet and president are reviewing plans submitted by senior leaders across campus to address the 2017-18 budget deficit, which is expected to go beyond this year's $14 million shortfall.

Current-year gaps of $9.2 million in the service centers and $4.8 million in the colleges will be covered in part by one-time funds. Early projections for fiscal year 2017-18 point to a deficit that could be as much as an additional $6 million higher — totaling up to $20 million.  

"We've reached the point where we cannot scramble each year to make up the difference," said Barrie Wilkes, vice president for finance and administrative services. "And that, unfortunately, means base-budget cuts."

Wilkes and his team will use latest-available data on factors such as state appropriations and enrollment to refine budget projections. These will be used to determine which financial scenarios submitted by the service units will be needed and to allow the colleges to finalize their plans.

Scholarships and financial aid, as well as student recruitment and advancement efforts, will be excluded from reductions because of their impact across the university, President George E. Ross said. Debt service and utility budgets also will remain whole. CMU is a statewide leader in minimizing its utility budgets through sustainability measures.

A number of construction projects have been put on hold this summer, including campus identity and signage work as well as renovation and space maximization efforts in Ronan, Warriner, Brooks, Foust and on the fourth floor of the library.

Ross said he's heard comments the deficit would be lower if the university had raised tuition as much as the state would have allowed in recent years.

That's true, but not in the best interest of students, he said. Even though CMU has had the lowest cumulative tuition increase — 17 percent — of any Michigan public university the past seven years, that hike bumped the cost of an undergraduate credit hour from $346 to $405.

"CMU's determination to lead the state in tuition restraint upholds our commitment to students. We cannot solve the higher ed funding dilemma on the backs of students and families.

"Budget reductions are grueling," Ross said. "A deficit this large is certain to include layoffs, and each of the 60-some members of our senior leadership team feels the enormous pressure of what that means to our campus community."

Many universities across the nation are suffering the effect of declining high school graduating classes, which will continue to shrink through 2023. The greatest percentage decline is predicted this fall. Michigan and New Hampshire are seeing the largest decreases.

"This is a tough yet formative time for CMU," Ross said. "We can be anything and do anything we want. But we can't be or do everything. I appreciate the compassion I'm seeing campuswide as well as the determination to shape CMU for the long term, to meet the greatest needs of students, communities and businesses across the state."

Provost Michael Gealt said the budget planning process has required an in-depth look at priorities.

"We've worked to identify and protect what's essential for student success and programs that fuel growth, achieve national recognition or bring in external funding. This is about proactively shaping CMU's future in response to population changes and career growth areas," he said.  

A relatively concrete plan, including layoff numbers, should be ready by late April. The Board of Trustees will approve the fiscal year 2017-18 budget during its June meeting.

Estimated budget process timeline

March 1                     Reduction plans due to division leaders (vice presidents, president)

March/April             Financial planning and budgets, vice presidents, president review                                       plan scenarios, update budget projections again for this year                                   and next, finalize university wide plan, work with Human Resources

Late April                 Senior leaders brief teams on respective college/department and                                   unit plans

Early May                Layoff notice process begins

May – June             Bumping process for staff unionized positions occurs

June 29                    Board of Trustees approves fiscal year 2017-18 operating budget

June 30                    Layoffs become effective

July 1                         Fiscal year 2017-18 begins