Board of Governors approves budget, discusses financial outlook

The Board of Governors met June 18 and approved the 2012 operating budget with a 7 percent cut in state funding. The bulk of the meeting revolved around what the cut means for the University.

The 7 percent cut takes a $2.9 million bite out of the school's approximate $89.7 million operating budget for fiscal year 2012, which begins July 1.

The 7 percent cut was no surprise and the University has been preparing for it all year, budget director Dave Rector said.

 "Really every area was asked to identify cuts," Rector said. "Except we didn't cut utilities because that didn't make sense. We didn't cut scholarships and we didn't cut the admissions office because we felt that that didn't make sense to cut that back when we depend so much on student enrollment now because state funding is going away."

The University made room for a 7 percent cut in the 2012 budget, but earlier during the summer it looked like the cut might be lower, Rector said.

Congress passed a state budget with a 5.7 percent cut to higher education, but June 10 Governor Jay Nixon announced he is withholding an additional $16.8 million from higher education to funnel money toward disaster relief in Joplin and flooded areas of the state, bringing the cutback up to 7 percent.

Tuition increases announced previously during the school year will make up for some of the loss in state appropriations, he said.

Declining state appropriations is part of a bigger picture, said University President Troy Paino.

During the meeting, Paino distributed graphs that showed in the past twenty years, there has been a decline in state appropriations.

Given Missouri's current budget shortfalls, that trend is likely to continue for years down the road, Paino said.

With less revenue, Truman could struggle to attract top-tier students and professors if other universities are able to offer better scholarships and salaries, Paino said.

To stay competitive, Truman needs to spend money efficiently, offer market-based salaries and develop alternative sources of revenue in the form of private donations and entrepreneurial programs through the Truman Institute, he said.

Salaries

There have not been salary increases during the last several years, but faculty and staff will see a modest increase from the 2010-11 school year, said Matthew Potter, chair of the Budget and Capital Projects Committee.

"It's something, it's not enough, but it's what we can spare at this point," Potter said during the meeting.

The Board approved a $1,000 salary increase for all full and part-time faculty and a 2.5 percent bump for staff.

The Board approved additional raises for faculty who are promoted.

Instructors promoted to assistant professor receive an additional $1,000 raise. Assistant professors promoted to associate professors receive an extra $2,300, and associate professors promoted to full-time professors receive an additional $4,600.

Full time faculty who have the rank of professor and have completed six academic years will receive an additional $1,000 raise.

Construction

Potter gave an update of construction projects on campus. He said all current projects are on target, including renovations to Ryle Hall, which is set to open at full capacity in August.

Potter listed a handful of future construction projects on a wish list the school will submit to the state.

At the top of the list are a second phase of renovations at Pershing Building, renovations to Baldwin Hall and McClain Hall and an emergency backup system that will provide electrical power to campus in the event of a disaster or emergency, he said.

The Board passed a resolution to submit the list to the state.

He said the projects are unlikely to be funded in the near future because of restrictions on the state budget, but if money becomes available Truman is in line to see some of it.

Performance funding

The state's formula for allocating money might change soon. Gov. Nixon wants to boost Missouri's graduation rates and develop a performance-based model for funding colleges and universities, Rector said.

During the board meeting, Paino announced Rector is part of the Performance Funding Task Force appointed by the Department of Higher Education to hammer out a plan to reward schools for improving graduation, retention and course completion rates for fiscal year 2013.  

Rector said the challenge for the committee is to find a plan that is fair to high-performing and low-performing schools.

Truman already has one of the highest retention rates in the state, so improvement will be more difficult for Truman than for a college with lower retention rates.

The committee will make its recommendations to the DHE before the Aug. 25 Governor's Summit in Jefferson City.

Capital Campaign

The Board heard a report from the Office of Advancement about the 60-month-long Capital Campaign wrapping up this summer. At the time of the board meeting, the campaign had overreached its goal of $30 million with $30.6 million in private donations.