A Message from the President
July 18, 2011 - Campus Budget Update
Late last week we received detailed information from the University of Louisiana System regarding our operating budget for the new 2011-12 fiscal year. As promised in my recent campus update at the end of the Legislative Session, I am sharing these additional details with the campus.
You will recall that our operating budget is funded from two sources - State appropriations and self-generated revenues from student tuition and fees. While our State appropriations in the 2009-10 and 2010-11 fiscal years were drastically reduced by a total of nearly $16 million, our campus budget cuts would have been even deeper had it not been for significant Federal stimulus funds included by the State in our budget. In fact, our 2010-11 fiscal year State funds were augmented with over $16 million in stimulus funds that are no longer available in the current 2011-12 fiscal year. Naturally, the anticipated loss of Federal stimulus funds was the cause of much of last year’s angst about this year’s budget. Fortunately, the lost stimulus funds have been partly replaced with State funds through a variety of budget transfers and other financial maneuvers accomplished by the Governor’s Administration and the Legislature.
The amount of funds we will receive from the State for the 2011-12 fiscal year also is somewhat impacted by further implementation of the new funding formula which relies on an allocation method tied heavily to relative program cost factors. As a result, institutions with more “high cost” programs, e.g., engineering or architecture, receive more funding under the formula, while institutions like Southeastern that have relatively fewer “high-cost” programs, are allocated less money. Additionally, this year for the first time the formula will base resources on end-of-semester student credit production, as opposed to 14th-class day student credit hour enrollment, thus funding institutions for student completion of courses rather than initial enrollment. The formula also includes a performance component that is consistent with achievement of institutional GRAD Act performance targets, particularly retention and graduation rates, as well as numbers of program completers.
For the reasons described above, the total amount of money we will receive from the State has declined by about $7 million when compared to last fiscal year. However, self-generated revenues in our operating budget should increase by a little over $6 million, primarily due to the 10 percent tuition increase approved by the Legislature, and to a lesser degree, enrollment growth.
Finally, our operating costs will increase next year by over $3 million. This increase is partly the result of higher fringe benefit costs and additional risk management costs. In addition, our scholarship costs will rise as we continue to implement our progression scholarship program that encourages students to progress more quickly to graduation and from higher general academic scholarship costs as we recruit more well-prepared students under the higher admission standards implemented this past fall.
The bottom line realized from higher self-generated revenues, less State funds and unavoidable increased operating costs, is a net reduction in institutional operating resources of about $4 million. Of course, this is much less than what the shortfall would have been had the potential $16-$19 million additional budget reduction for which we had been asked to plan had occurred. I am certainly pleased and very grateful that Governor Jindal’s Administration and the Legislature worked to achieve a budget for higher education for the 2011-12 fiscal year that avoided the previously anticipated financial catastrophe.
Last year’s aggressive cost cutting and planning for potentially more dire financial circumstances have positioned our institution to address the more modest net shortfall for the new fiscal year. Specifically, we will balance our operating budget by eliminating a number of positions that presently are vacant, realizing other operational savings and shifting certain costs to other funds. I am very pleased that we do not plan any budget-related layoffs, furloughs or further reductions in operating resources for individual units.
I look forward to the conclusion of the budget planning process in the weeks ahead so that we can finalize specific budget allocations and plans for individual budget units.
I hope everyone is having an enjoyable and productive summer and is looking forward to the upcoming new academic year with anticipation.