A Message from the President
June 11, 2012 - Campus Update
The recently concluded legislative session was one of the most contentious and controversial in recent memory. As has been the case in recent years, debate over the state budget contributed significantly to the controversy.
Along with other members of Southeastern’s administration, I began meeting with our legislative delegation well ahead of the legislative session to share with them issues and concerns of the university, particularly regarding the budget. During the session, we communicated frequently with legislators about a number of bills that were important to higher education and Southeastern. In addition, our Alumni Association, through its ROAR Network, advocated for the university’s position on a variety of legislative issues.
As explained in my May 31 and June 4 campus updates, as the legislative session wound to a close it became clear that, despite the collective efforts of many people, we would be confronted with additional state budget challenges impacting both the current fiscal year as well as next. We recently received additional details from the University of Louisiana System about the resulting budget reductions.
For the current fiscal year that ends June 30, the Legislature took action to utilize money from the state’s budget stabilization fund to help partially offset a revenue shortfall. However, Southeastern’s share of the resulting budget cut to higher education for the remainder of this fiscal year will be approximately $1 million. At this time we believe we can accommodate this reduction through “savings” achieved as a result of the spending freeze enacted by the Governor.
For the upcoming fiscal year which begins July 1, Southeastern’s allocation of the higher education budget reduction is approximately $9.4 million. This amount is the net reduction given approximately $6 million in additional tuition we will realize next year as a result of meeting our GRAD Act performance goals. Obviously the reduction would have been much greater if we had not achieved the ability to implement the tuition increase.
At one point in the legislative process it was estimated Southeastern’s part of the higher education reduction could have been as high as $16.5 million. While we are certainly relieved that the reduction is less, $9.4 is still a very large reduction, particularly given that this represents our ninth reduction in state funds since December of 2008, bringing our cumulative reduction in state funds to about $40 million and our cumulative reduction in total operating resources, net of tuition increases, to about $18 million.
These are staggering amounts, representing a loss of about half of the level of our state support on July 1, 2008. Over the course of these last several years we have implemented many changes to accommodate the reductions in operating resources while still maintaining our focus on our students and critical programs. Frequently, these changes involved difficult decisions and unpopular results.
To date, our actions have included drastically reduced staffing levels across the university, and the elimination of 203 positions. Nearly half of these positions were occupied when eliminated from the operating budget. We also restructured colleges, departments and other units on campus to deliver necessary services with fewer people and at lower cost. We drastically reduced funds for supplies, travel, acquisitions, and other operations. We also reduced support from the university operating budget for athletics, the Lab School, Columbia Theater and other community-related activities by asking these areas to significantly increase their financial support from other sources.
Following a detailed and arduous prioritization process, we eliminated 19 low-enrollment/low-completer academic programs. We restructured our 40-hour work week to fit in 4.5 days to reduce utility costs. We implemented the use of solar energy and biodiesel to increase energy efficiency and save money.
And finally, under the GRAD Act we significantly increased student tuition and fees to generate additional revenue, thereby offsetting part of the loss in state funds. In fact, our self-generated revenues next fiscal year will make up about 60 percent of our total operating budget vs. about 40 percent from state funds - an almost exact reversal of these proportions in four short years.
None of these changes has been easy, but all have been necessary. These prior actions notwithstanding, we are now faced with the challenge of making additional changes to accommodate further reductions in our financial resources. As a result, we must again examine the activities in which we engage, evaluate their relative importance, and find more efficient methods to accomplish our priorities.
Although detailed budget and operational changes will not be finalized for several weeks, the actions necessary to balance the budget will likely include the following:
Additional employment reductions, including elimination of vacant positions, elimination of positions anticipated to be vacated in the upcoming year due to retirements or resignations, transfer of some personnel costs to non-operating funding sources, and, unfortunately, layoffs.
Additional reductions in the limited remaining operating budget support for supplies, travel, acquisitions, and other operating services.
Achievement of further efficiencies in instructional costs through additional scrutiny of course scheduling and faculty workload.
Additional transfer of support service costs, including library acquisitions, to non-operating funding sources.
Increases in self-generated revenues, where possible.
As I pointed out in my testimony before the Senate Finance Committee during the recent legislative session, much like the reductions in our state financial support, the impacts on the institution from our actions to manage the cuts are cumulative in nature. For this reason even more so than the absolute amount of the reduction for the upcoming year, this will be a very difficult budget reduction for us to manage.
As I have done in the past when we faced financial challenges, I ask that you continue to serve the interest of our students. In our frustrations with our circumstances, we are sometimes guilty of forgetting that it is the students who, despite significant annual increases in their tuition and fees, have seen their services, opportunities and futures constrained and at times even diminished. We must always remember they are the reason the university exists, and we must continue to focus on their success, even with limited resources.