CMU is also now projecting a 20 million dollar shortfall for the 2017-2018 fiscal year.
Barry Wilkes, vice president of finance and administrative services at the university, spoke with Ben Thorp about the deficit and what it means for the university.
Ben: Start by talking about how our understanding of how the budget shortfall has changed. I know initially that number was ten million and now that number is closer to fourteen. Walk me through that.
Wilkes: Originally when Fall enrollment numbers, last fall, 2016, came in we did a projection based on what we thought was going to happen Winter semester and then Summer one. At that time we had a estimate of a ten million dollar shortfall. When we got through January and saw what the actual numbers were for Spring semester we realized that the number had grown to about fourteen million. The increase in the shortfall is due to fewer student credit hours than had been anticipated.
Ben: How did we end up here because it sounds like a lot of it has to do with lower enrollment.
WIlkes: You’re exactly right. For a number of years now Michigan and a number of other states in the U.S. have had declining numbers of graduating high school seniors. If there are fewer graduating high school seniors than there are fewer traditional students to go to universities. We’re starting to see that trend hit CMU. So that is resulting in fewer students and therefore fewer student credit hours. That is projected to go on for several more years.
Ben: What is the budget shortfall projected to be for the next year and then if this is an enrollment problem and it’s going to continue for a few years what is the outlook moving forward?
Wilkes: The budget reduction or the budget shortfall that we’re estimating, and again we have a number of different estimates ranging from about 16 million dollars to 20 million dollars. Now that includes the 14 million shortfall that we have for this year, an increase of six million dollars, if you will.
As far as how we deal with it going forward for a number of years the university has been increasing their out of state recruitment efforts. We have been implementing new financial aid plans designed to attract students. We’re also doing more international recruiting as well as redoubling our efforts in doing some different things in the state of Michigan to try and attract the kind of students that we need and the kind of students that we want to be successful here.
Ben: Talk to me now about, my understanding from the press release is we are talking about making ‘baseline budget cuts.’ What are those and what does that mean for faculty?
Wilkes: Right now where we are is each division of the university is coming up with recommended budget reductions so I can’t tell you specifically what other divisions will be doing. We’ll be working through all those plans this month and into early April. What we do know at this point in time is that there will be some layoffs, I can’t tell you how many. Our budget is just short of two thirds compensation, so salary and benefits. It’s hard to find those kinds of dollars if you aren’t looking at positions. Many areas have been holding vacant positions so as there has been turnover and as people have left instead of filling a position they have held it vacant anticipating the need for base budget reductions. We’ll have a better idea of what those plans are and we’ll be communicating with the campus community mid to late April in terms of specifics.
Ben: Anything else you want to mention?
Wilkes: The only thing I guess I would say is it is difficult to give people the specific answers they want. People want to know how is this going to affect my department how is this going to affect me? And unfortunately because we’re dealing with very preliminary estimates we can’t give a very specific and definitive answer. We’ll have a budget and we’ll go to the board for a budget approval in June but we won’t know until the end of August what I’ll real enrollment is going to be. So it makes it challenging to be transparent and communicate in the way we know everybody wants to hear, they want to know what’s going on. We’re doing our best to get information out there as we have it even though we don’t have all of the answers.