President’s Council to Develop Budget Reduction Plan

With an executive order likely and estimates of its impact ranging from a 5-15 percent reduction in state funding for the current fiscal year, NMU President Mike Roy said the President’s Council is exploring measures to address a potential shortfall. At the university forum Oct. 22, Roy said that with the estimates circulating now, Northern could face a reduction of anywhere from $2.3 million to $7 million.

“We should know by Thanksgiving what the exact number will be, but we can’t wait that long to begin the process,” he said. “I told the President’s Council at its Wednesday meeting that it should develop a reduction plan of $4.6 million, based on the middle-ground assumption of a 10 percent executive order. That plan must be in place by the end of November so that we can present it to the university community and then take it to the NMU Board of Trustees’ December meeting.

“Some might say that’s not much time, but any executive order will impact our funding for this fiscal year (which began July 1), so the sooner we implement reductions, the sooner we can offset the shortfall. We’re working on a much more compressed timeline than the last time around.”

Roy has already made one decision: to put the Quad II renovation on hold pending a proposal that would redirect funds bonded for that project to the Magers Hall renovation. Both projects are estimated at $5.8 million. Roy said the funds had been bonded previously, so they are available to the university. NMU cannot funnel the money to general fund operations, but can redirect it to a more critical construction need – student housing.

“Housing and residence life covered the bulk of the debt service for the Quad II project,” Roy said. “Smaller portions were covered by dining services and the general fund. Now housing and residence life – an auxiliary operation – will take over the entire bonding debt, which creates a savings for the general fund. By doing Magers first, we will be able to meet our need for student housing and add revenue to housing and residence life, putting that area in a better financial position when it takes on the construction of new student apartments and returns to the Quad II renovation.”

Roy said faculty and staff will be kept up to date on the council’s progress via the CAMPUS newsletter and university forums.

“I realize that there are going to be a number of rumors circulating,” he said. “I hope the faculty, staff and students will be patient and not fuel the rumors, but attend the forums and read material intended to keep them informed of what is going on. We will do our best to communicate effectively and efficiently with the campus community.”

In large part because of his need to remain focused on the state budget situation, Roy announced at the forum that he would not seek the NMU presidency on a permanent basis.