Projecting an estimated budget gap of $16 million next academic year, the University of Montana is looking to trim costs, a discussion that could include cutting personnel.
The state’s largest university saw enrollment dip last fall by roughly 700 students, a number that school officials have blamed on poor publicity surrounding recent scandals and fewer high school graduates.
While administrators already have made a litany of one-time cuts this academic year to cover the gap, deeper adjustments may be carried into next year.
“We’re projecting about a $16 million increase in costs next year over this year,” said Michael Reid, vice president for administration and finance. “We’re not going to have less money next year than this year. It’s based on increased operating costs.”
Reid said Tuesday that as the university develops its 2014 budget, it may have options beyond cutting expenses to narrow the funding gap. Generating new or additional revenue could help, he said.
Yet much of that will depend on fall enrollment, and that won’t be known until mid-summer. Campus vice presidents are considering a list of options to deal with the shortfall, including cuts ranging from 2 percent to 8 percent, though retirement and attrition within departments could also help.
“There will likely be reduced operations across all areas of the campus based on an evaluation of student enrollment,” Reid said. “I don’t expect significant changes, if any, to institutional offerings.”
Reid said it’s likely that the university will have to scale back its resources, either through cutting personnel in low-demand areas, or through other financial expenditures. Tenure-track faculty members are protected from any potential cuts.
Reid said all budget considerations are based on the ebb and flow of the student population, along with the mix of students in that population. Students attending UM from out of state pay more in tuition, as do graduate students, for example.
“We’re seeing some positive indicators in our enrollment numbers for 2014, so we may adjust the revenue projections up a little bit, and that will also help reduce the projected shortfall,” Reid said.
When the university saw record-high enrollment in recent years, funding from the Montana University System increased, along with revenue gained from tuition. The school added positions and programs to meet the rising demand, and it must now scale back as demand drops.
UM President Royce Engstrom said the 2014 budget won’t be known until the legislative session ends and the Board of Regents convenes in May.
“I have instructed the vice presidents who oversee sectors across campus to plan for a reduced budget,” Engstrom said in a recent letter to the campus community. “They are working to minimize the possible impacts on people and expect to be able to manage most of those impacts through retirement and attrition.”
Much of the university’s administration was off this week during spring break. But in his letter, and in past interviews with the Missoulian, Engstrom has said UM is looking to invest in new areas, while generating revenue beyond tuition and what it receives in state funding.
Among the goals, Engstrom said, the university plans to dedicate more resources to student recruitment while increasing its contact with student prospects. Engstrom said UM also must offer heftier financial aid packages, saying that move is needed to stay competitive with other universities in the region.
Reid said the 2014 budget projections are based on the school’s $167 million educational and general budget. While the budget does not represent the university’s overall budget, it does cover general instruction and support operations.
“These budget projections are primarily a factor of what’s going on with enrollment, and not how we’re being funded by the Legislature,” Reid said. “We have to recalibrate our operations given the projected enrollment. That means we grow operations as we increase students, and have to make the necessary adjustments in the years when our enrollment dips.”