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Tuesday, May 8, 2001 By GEORGE DENNISON president of the University of Montana

With the close of the legislative session, we have definitive information about the funding provided higher education for the next two years. I must now recommend tuition increases for consideration by the Board of Regents during the meeting May 17-18.

We asked the Legislature for an additional $500 per resident student and funds for increases in salaries, student financial aid and inflation. However, the Legislature funded less than half of the request - just over $28 million, a 5 percent increase, including about $950,000 more for financial aid. While the appropriation contains much less than we requested and need, it is an increase. Some states will actually decrease funding for higher education this year because of the downturn in the economy. When we talk about funding for higher education, we must state clearly that we appreciate the increase, even if we want and need more.

Based on the request to the Legislature, we had planned to recommend a tuition increase of 4 percent for each of the next two years. Because the appropriation was lower, we must reconsider the level of tuition increase. My analysis of needs and obligations leads me to a recommendation for increases ranging from $240 for resident freshmen and sophomores to $322 for resident advanced graduate students, and ranging from $932 for nonresident freshmen and sophomores to $1,070 for nonresident advanced graduate students for fiscal year 2002, the coming year. When combined with mandatory fee increases - the largest of which is the $130 Campus Recreation fee increase approved by the student referendum last year - the amounts range from $411 for resident freshmen and sophomores to $493 for resident advanced graduate students, and from $1,103 for nonresident freshmen and sophomores to $1,241 for nonresident advanced graduate students. For fiscal year 2003, the year after, the tuition increases range from $244 for resident freshmen and sophomores to $326 for resident advanced graduate students, and from $954 for nonresident freshmen and sophomores to $1,094 for nonresident advanced graduate students. The mandatory fee increases for fiscal year 2003 will not exceed $50.

The percentage increases for tuition are 11.25 for 2002 and 10.25 for 2003.

When I met recently with the Student Senate, I described the expenditures the increases must cover:

Annualizing current salaries $1,412,449 (1.5 percent)

Salary increases began on Oct. 1. Hence we need the funds to pay for the months from July to October. In addition, the percentage of the salaries that the appropriation will cover was reduced from 62 percent to roughly 50 percent.

Salary increase for FY 2002-FY2003 $2,875,870 (3.1 percent)

Roughly half of the salary increases that take effect during the next two years on Nov. 1 must come from tuition.

Transfers from campuses to agencies $635,849 (0.7 percent)

This refers to changes in the appropriation during the legislative session, reducing it from the level anticipated.

Library inflation $640,174 (0.7 percent)

Inflation runs higher for library operations and maintenance than for any budget item except utilities. Because of student and faculty concerns, keeping pace with inflation is a high priority.

BANNER operations $770,000 (0.8 percent)

This item relates to the automated systems implemented several years ago. The systems must be updated and maintained.

Fixed costs $475,592 (0.5 percent)

This refers to increases in insurance, fee waivers, and other such fixed costs over which we have no control.

One percent reduction in personnel costs $779,826 (0.8 percent)

The Legislature reduced personnel costs by 1 percent across the board. We must either find a way to replace the funds or reduce the number of faculty and staff.

Total $7,589,760 (8.1 percent)

Thus, before we do anything at all about conditions unique to this campus, we will need a tuition increase of 8.1 percent each year.

We already know of additional needs and obligations. Most people expect fierce increases in utility costs during the next two years. By our estimate, that will require an additional $497,418 during 2002 and $1,373,803 during 2003. We must also shore up University Reserves by $400,000 in 2002 and another $370,000 in 2003 to prevent disruptions caused by enrollment shortfalls or other contingencies. We must increase funding for the operation and maintenance of the buildings on campus as well to make certain that they are suitable for continued use. Finally, the university must fund the termination pay that retiring faculty and staff members have earned, requiring a $400,000 increase in that budget line. For the Missoula campus, those numbers translate into an additional 3.15 percent for 2002 and 2.15 percent for 2003.

I understand and appreciate the burden these increases represent. Some will ask why not reduce costs rather than increase rates? The university reduced budgets by $8 million during the past two years, with half of those reductions in permanent budget cuts. I have concluded that further reductions will erode the quality and responsiveness of the university. However, I pledge to continue to seek ways to control costs. Even with these proposed increases, we will have tight budgets. But we can and will deliver the programs and services that attracted students to the campus.

How do these increases compare with what is happening elsewhere? We will continue to monitor those developments closely. However, I can report that the University of Montana ranked 16th on a list of 20 comparable institutions in the West for nonresident tuition in 1990 and ranks 16th on the same list in 2001. For resident tuition, the university ranked 12th in 1990 on the same list and ranks eighth in 2001. Reports indicate that Utah State University will raise tuition across the board by 9 percent; the University of Nebraska by 15 percent; Idaho by 10 percent to 12 percent; with other states not yet certain but suggesting increases in this range. These reports provide some context.

I realize that this article contains little by way of good news. However, I thought it important to let everyone know what appears in the offing. I want to assure you as well that we will do all we can to sustain the quality and responsiveness of the programs and services at UM.

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