Careful planning keeps education affordable
and avoids loss of any current faculty or staff
HAYS, KS -- With the state's new fiscal year set to begin in just a few weeks -- on July 1 -- Regents universities and other state agencies are scrambling to design FY03 budgets that maintain services for their clients despite significant reductions in funding,
Dr. Edward H. Hammond, president of Fort Hays State University, revealed a new budget to his cabinet this morning that has a shortfall of nearly $1.5 million from the current fiscal year but manages to accomplish two major goals: 1. an increase in tuition and fees of just 5.01 percent (lowest of all the Regents universities) that preserves Kansans' accessibility to higher education at FHSU; and 2. the preservation of all current faculty and staff at the university.
"We won't be able to do much new at Fort Hays State in the coming year," the president conceded. However, he added, "I think it's as good a budget as we could get. We could have raised tuition by 15 percent to cover the shortfall, but that would have been counterproductive to our mission of making higher education available to all Kansans."
"The philosophy behind building this budget was to protect faculty, protect student access to courses and to provide employment for all currently employed members of the Fort Hays State University community without any furloughs or layoffs," he explained.
The president noted that the severe budget problems are not unique to Kansas.
"According to the National Governors Association and National Association of State Budget Offices Biannual Report, the recession and economic fallout of Sept. 11, 2001, combined with the explosion of Medicaid spending, caused a $40- to $50-billion budget shortfall in more than 40 states," he said. "As a result, 39 states were forced to reduce their enacted budgets by about $15 billion and had to make transfers from other reserves. To plug their budget gaps, the Fiscal Survey found that states took one or a combination of the following measures: 26 used across-the-board cuts, 22 used their rainy day funds, 11 laid off employees, three states used early retirement, 10 reorganized programs, and 33 used a variety of other methods."
He added, "Our FY 2003 budget is better than any other out-of-state institutional budget I know of at this time. In the end, the Kansas Legislature and Gov. Bill Graves treated us fairly well given our fiscal times."
The president outlined the factors that produced the budget challenge:
Annualization of salary increases from FY02 - $250,000
Increased health insurance costs - $441,699
Other fringe increases - $91,000
Estimated global reductions in state general fund - $176,436
Probable 1-percent recision in FY03 in state general fund - $319,470
Funding for the new-hire pool - $20,000
Funding for degree completions and promotions - $27,000
Funding for a new Leadership Studies position - $36,784
Creation of a 24/7 telephone support service for all students - $27,820
Funding for a part-time recruiter for Colorado - $12,000
Change in Provost's Office support staff - $12,000
Total - $1,414,209
"This isn't an exact science," President Hammond cautioned, "and we don't have control over many of these items." He said the first five items represented cuts, anticipated cuts and unfunded mandates from the state, while the smaller remaining items represented new expenditures needed at Fort Hays State to ensure a high quality education.
The president also outlined the steps that he and other administrators have designed to avoid new costs and produce new revenue to cover the shortage:
Increase tuition and fees by 5.01 percent - $800,261
No funding for staff or faculty salary increases - 0
Student wages to be held at $5.65 per hour (FY02 level) - 0
Hold stipends for GTAs to current funding level - 0
Shift overload salaries from Virtual College to fees - $300,000
Lower rates for new hires - $50,859
Reduce non-academic operating budgets by 1 percent - $58,677
Reduce the farm overtime budget - $10,000
Reduce classified overtime and seasonal budgets by 10 percent - $15,500
Withdraw from the Telenet 2 Consortium - $40,000
Shift salaries & fringes to Telecommunications - $70,328
Eliminate a vacant Modern Languages position - $36,684
Eliminate a vacant Kelly Center Position - $26,500
Remove the Provost's Seasonal & Overtime account - $5,400
Total - $1,414,209
"I think this will be one of the better financial packages you'll find around the country at any school," President Hammond said. "Strategically, we've positioned ourselves well. We will have the lowest tuition in the state. We will grow."