Continuation
Budget Proposed
Interim
President Mike Roy told the attendees of Wednesday’s
(April 21) university forum that he will recommend the NMU Board
of Trustees adopt a continuation budget at its next meeting, April
29-30.
“At
this time the state budget picture is rather fluid,” said Roy
. “My intention is to recommend
that we continue to operate under the 2003-04 budget and implement
the $3.3 million in reductions previously identified by the Budget
Alternatives Committee and President’s Council.”
Roy
said the proposal means there
would be no recommendation on tuition and fee rates this month,
but added that a decision is likely by July 1.
The
state has approved a 3 percent restoration of base budget funding
for universities that meet two requirements: keep their tuition
and fee increase at or below the Detroit Consumer Price Index (CPI)
– currently 2.4 percent; and implement no tuition increase after
Dec. 1. Those that do not meet the conditions will not qualify for
restored funding and will receive an additional 3 percent funding
decrease.
Northern’s
Board of Trustees approved a $100 mid-year increase (2.1 percent)
on Dec. 12, a decision supported by the Associated Students of Northern
Michigan University (ASNMU). The bill with the tuition restraint
language was signed into law Dec. 29. Roy said he is working to
have legislators add an amendment to the higher education bill to
change the date of the tuition restraint language to Jan. 1.
Roy
said for Northern to be disqualified
for the appropriations restoration of $1.4 million and lose an additional
$1.4 million in reduced state funding would “actually penalize this
institution for being fiscally responsible.”
“Including
the mid-year increase, Northern had the third lowest percent and
dollar figure tuition increase this year, and we dropped from the
fourth to second
lowest in the state for overall cost,” said Roy.
“I also point out to legislators that we’re the only university
in Michigan
to provide our full-time students a comprehensive technology program
– computer, software, Internet use and support – as part of tuition,
and still we remain one of the best values in the state. Our message
is that Northern has always been concerned about access and affordability,
and that we have used restraint in pricing our tuition and fees.
I think we’ve done and outstanding job to keep our costs down and
our pricing affordable.”
Northern’s
testimony before the House Higher Education Subcommittee is May
12. Roy
said that the legislative process is a “long one; we’re about midway
through and many things can change along the way.”
Gavin
Leach (Finance and Administration) presented three options
that will be brought before the board for discussion:
- Tuition
amendment. If state legislators amend the higher education
bill changing the date of the tuition restraint language from
Dec. 1 to Jan. 1, NMU would meet all of the requirements of the
bill and would then qualify for the appropriations restoration
($1.4 million). The recommendation would be for NMU to take the
pledge and set the tuition and fee increase at 2.4 percent or
$62.50 per semester.
- Tuition
rebate. If Northern
rebates the $100 midyear tuition increase and raises tuition and
fees by 2.4 percent, it would qualify for the appropriations restoration
and students would pay $11.50 more per semester in tuition and
fees next year. But doing so would cost the university $733,000
in tuition and fee revenue from the current year – dollars that
have already been spent – and $733,000 in base budget (ongoing)
tuition and fee revenue that would require additional budget reductions
for fiscal year 2005.
- No
amendment, no rebate. If
no amendment is added to the bill and the university chooses not
to rebate the midyear increase, it would result in Northern losing
the appropriation restoration and being penalized with an additional
3 percent funding decrease for a total appropriation impact of
$2.8 million. To balance the budget solely with tuition and fee
revenues, Northern would need to increase its rates by 9.6 percent
or $249/semester.
“We
obviously have a favorite scenario,” said Roy.
“We’d like to be able to come back to the board and make a recommendation
for the first option. I can tell you right now that I do not want
to recommend a 9.6 percent tuition increase, which would mean looking
at additional budget cuts to deal with the shortfall.”
Leach
said expenditures for 2005 are projected to increase by $3 million.
That figure includes:
- 11 new faculty positions to meet
Northern’s growing enrollment;
- increased contractual wage compensation;
- debt service to cover the start
of the renovation of Cohodas to include classroom space and staff
offices and replacement of an aging boiler and electrical switch
gear in NMU’s heating plant; and
- anticipated increases in utility,
health care, and state-mandated program expenses.
Les
Wong, who attended the
forum while making his first visit to campus since being selected
as president, said, “What has been presented here is a reasonable
budget package, and I can help sell this package to the state legislature
and the Governor. What I am seeing at Northern
Michigan
University
is very efficient planning.”
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