A Message from the President
May 5, 2010 - Budget update to faculty and staff
As we approach the end of the spring semester, I thought it would be appropriate to update the campus on a number of budget-related issues.
As you know from my April 16 Campus Update, Southeastern has been told to plan to absorb an additional $1.825 million reduction in our operating budget in the current fiscal year that ends June 30. Under Governor Jindal’s proposal to the Legislature to address the current shortfall, this reduction will be met through savings from personnel attrition and the previously enacted spending freeze.
As originally proposed by the Governor, the State budget for the upcoming 2010-11 fiscal year, which begins July 1, 2010, does not reflect additional reductions for higher education; however, the same shortfall in state tax collections which resulted in the most recent budget reduction also has a negative impact on the proposed budget for the 2010-11 fiscal year. At this point, it is unclear how the Legislature ultimately will choose to resolve the projected shortfall in the 2010-11 budget and how those decisions might impact higher education and Southeastern.
In addition, given the upcoming expiration of federal stimulus funds that are helping to shore up the State’s current and proposed 2010-11 budgets, I continue to have significant concerns about our budget for the 2011-12 fiscal year.
Furthermore, I am very cognizant of the fact that units cannot function indefinitely without a reasonable level of operating resources. Four budget reductions totaling nearly $16 million in the past 18 months have decimated operating resources for budget units across campus. The resulting reality is that we may have to eliminate or further reduce funding for some activities in order to return some operating funds to those activities that are most vital to the University’s future.
On the revenue side, while we anticipate being able to raise tuition by five percent next year in accordance with previously approved legislation, unfortunately, the additional revenue does not provide much net budget relief. In fact, the anticipated revenue from the increase is about $2 million, while anticipated increased expenses next year attributed to retirement and healthcare benefits, along with mandatory risk management costs, will amount to about $3 million.
The proposed LA GRAD Act would allow colleges and universities to enact additional tuition increases, tied to higher performance expectations; however, at this point legislative approval is far from certain.
Going forward, our ability to effectively “manage” all of these potential budget issues requires that we continue to be proactive and take action to position the University to remain viable in the face of additional budget challenges that increasingly appear likely. This means we cannot afford to take a “wait and see” approach but instead will continue to move forward with additional elements of our strategic budget plan.
First, as you know, last week we launched a Retirement/Resignation Incentive Plan for Tenured Faculty. Legal and policy constraints significantly limit our ability to directly impact the substantial instructional costs represented by salaries and benefits of tenured faculty. Consistent with a recent change in University of Louisiana System policy, our Incentive Plan provides retirement incentives to a limited number of tenured faculty members with the priority based on those earning the highest salaries relative to their peers at other institutions.
Second, we will continue to move forward with prioritization of both academic and non-academic programs with the goal of reducing and/or eliminating some programs to ensure the most effective use of our diminishing resources.
For non-academic programs, we are carefully evaluating financial data, along with information about mission-related impact and other criteria-based assessments in order to discern the best course of action for each program.
For academic programs, a Task Force made up of academic deans and senior college faculty will review the data collected to date in light of previously-determined program prioritization criteria. These criteria and data can be viewed at the following link: http://www.selu.edu/admin/president/prioritization_acad/review_materials/index.html.
Finally, I regret to report that in the weeks and months ahead, we anticipate some additional organizational changes and personnel reductions in order to achieve further cost savings in future fiscal years.
I realize there is a great deal of concern and unease among faculty and staff about the uncertainty associated with future budgets. Unfortunately, current economic circumstances and political realities do not augur for the level of certainty we all prefer where future events are concerned. I am confident, however, that the pursuit of the additional budget reduction strategies described above, in conjunction with previously implemented actions, will position our institution to endure these uncertain times.
In conclusion, I want to thank all of you for continuing to focus on serving our current and future students. I am pleased to report that at this point, enrollment projections for the upcoming summer and fall semesters are very positive - both in terms of the numbers of students, as well as the numbers of new students with outstanding academic qualifications.
As always, additional details and developments will be promptly shared with the campus community.
John L. Crain,