Revenue from FHSU's all-time high enrollment softens blow,
but severity of cuts forces elimination of some Virtual College classes
HAYS, KS -- When Gov. Bill Graves announced last week that he was cutting another $78 million from the state's budget for fiscal year 2003, the president of Fort Hays State University warned that the impact would be devastating to people served by the university.
At a news conference this morning in Sheridan Hall, Dr. Edward H. Hammond announced the steps the university must take to deal with the latest cuts, which came in addition to $41 million that the governor cut in August. The president said that no jobs would be lost for the spring, but the university would have to freeze all vacant positions and cancel 40 to 50 distance education classes that were scheduled to be offered through the university's Virtual College in the spring 2003 semester.
"This latest challenge was severe," President Hammond said. "Our fiscal year '03 budget prior to the Thanksgiving Day cuts had built in global reductions of $246,670 that the Legislature imposed on us, another $818,093 in unfunded mandates from the Legislature and the $303,179 reduction that the governor declared in August -- a total of $1,367,942. We covered that shortfall with about $800,000 in tuition revenue, produced by our 6.1 percent increase, with $567,000 from cuts in classified and unclassified non-teaching positions, and with cuts in the Other Operating Expenses budgets of units that don't produce student credit hours.
"Against that backdrop, we are now faced with $1,229,871 in further cuts, which have to be taken out of a general fund budget that already had been reduced to $31,407,022. Because the year is half over, the cuts actually must come from a remaining budget of about $16 million. The size of the cuts plus the timing make this devastating."
President Hammond said the university's successful growth strategy, which produced an all-time record enrollment of 6,392 this fall, makes it possible to deal with budget cuts on a temporary basis. He said $500,000 would be used from tuition revenue that was greater than what had been budgeted; $443,435 would be used from salary savings in unfilled positions, normally used for strategic planning initiatives; and $286,436 would be used from budgeted strategic planning funds.
The president listed four negatives in this approach:
* "We must eliminate 40 to 50 Virtual College courses that had been scheduled for the spring semester, negatively impacting 100 or more students;
* "We must institute a hiring freeze to make sure we generate the salary savings;
* "By using strategic planning money in this way, we will not have funds to support and maintain equipment and basic infrastructure; and
* "This is one-time money, so these cuts must be built into the fiscal year '04 budget. Under Kansas statutes, the cuts are 'allotments' that reduce our base budget. So, this just delays some of the difficult decisions about cutting positions and services that we must face when we build the '04 budget."
On the other hand, the president noted advantages in the approach that will be followed:
* "All faculty and staff now employed will remain employed through fiscal year '03, which ends June 30, 2003;
* "All but 100 or more students will be served;
* "There will be no reduction in summer school; and
* "There will be no reduction in on-campus classes."
Hammond said steps were being taken to address problems caused by canceling Virtual College classes. "The students who are not being served because of canceled classes are all being contacted and advised," he said. "We hope to move them to other courses that fit their programs of study."
The president said the process of building the FY04 budget would begin immediately. "We'll have to build into that budget the $1.2 million in permanent cuts plus $600,000 for increases in health insurance and fringe benefits," he said. "In the final analysis, we're preparing to build a budget that will be $2 million less than the fiscal year '03 budget that existed before the Thanksgiving Day cuts."
He said that FHSU administrators would follow three management principles in developing the new budget:
1. Reductions will be strategic rather than across-the-board;
2. Reductions will be mission driven, with emphasis on maintaining the quality of the student learning experience as the highest priority; and
3. Every effort will be made to maximize resources through collaboration and cooperation, with continuing emphasis on reducing administrative expenses.
President Hammond described development of the FY04 budget as a two-stage process: "In the first stage we'll look at where we can merge responsibilities and merge administrative units, and we'll look at ways to make faculty teaching activities more efficient from a student-credit-hour basis. In stage two, we'll look at increasing tuition and fees, and we'll identify programs and services that can be eliminated."
He said those steps would be implemented by using the university's strategic planning process that involves students, faculty and staff.
"One cannot look at the task of cutting $2 million out of a $40-million operating budget without realizing that hard decisions will have to be made," he said. "It would be my hope that the final budget will permit us to meet most of our students' needs at an affordable price and that we can protect the faculty and staff who are the heart and soul of the institution.
"To make this wish a reality, our new governor and the Kansas Legislature must work in a bipartisan fashion to adequately fund our university. These kinds of permanent reductions not only hurt Fort Hays State but hurt the thousands of Kansans we serve. This is detrimental to the future of the state."