Budget Recommendation Committee recap
Members provide an overview of MSU Denver’s state funding request and possible scenarios.
February 15, 2021
Larry Sampler, chief operating officer and vice president for Administration, began the meeting of the Budget Recommendation Committee on Friday by noting the changing higher-education funding landscape.
“There are still a lot of big, almost tectonic, shifts going on with respect to funding opportunities with the University, whether it has to do with the Joint Budget Committee, the Office of State Planning and Budgeting, lobbying to the governor’s office, federal funding and how it can be spent. There are a lot of moving pieces,” Sampler said.
Given the current uncertainty and the fact that Metropolitan State University of Denver is still compiling census information, a more robust enrollment update and budget details will be provided at the next BRC meeting Feb. 26.
“Right now, we’re going to be very conservative in terms of how we look at enrollment,” said George Middlemist, Ph.D., associate vice president for Administration/CFO. “There are a lot of unknowns. The more we can get back to campus and on-campus learning, I think that bodes better for us.”
The BRC met with the Board of Trustees in January to provide an update on the spring budget. Right now, the University is expecting roughly a $1 million shortfall (likely a bit less) due to lower-than-expected spring enrollment. The BRC and trustees agreed that, rather than additional cuts, necessary funds be drawn from the University’s $7.8 million reserves.
“We’re trying to hold on to as much money (in reserves) as possible to deal with what could be a shortfall next year and maybe even the year after,” Middlemist said.
While accelerated spring courses will have a positive impact on the budget, auxiliary revenue is down by approximately $5.5 million because of reduced activities on campus and waived student fees due to Covid-19 impacts. The BRC is focused on setting future budget parameters and considering tuition rates.
Gov. Jared Polis has proposed returning higher education to FY2019-20 funding levels, which would bring MSU Denver back to approximately $64 million in base funding from the state. A JBC analyst has proposed a similar model that also includes some funding specific to first-generation students, which could boost MSU Denver’s overall base funding to roughly $66 million. The Institutes of Higher Education Proposal, which MSU Denver did not sign on to, would increase state funding for higher education by 8.7% to restore funding levels to FY2019-20, cover base core costs for the past two fiscal years and provide additional funding for first-gen students.
As outlined in a recent letter from President Janine Davidson, Ph.D., MSU Denver remains chronically underfunded, and these considerable state funding inequities must be addressed by state lawmakers.
“We’d need an additional $50 million just to get us to the average (funding level) of other state schools,” Middlemist said. “President Davidson felt strongly that we can’t continue to ignore the students we serve; we need the state to rectify the inequity of funding to this institution.”
MSU Denver’s proposal to the JBC was to close the University’s funding gap by providing an additional $50 million in base funding over the next five years.
Tuition and fees
Polis’ proposal would allow MSU Denver to increase tuition by up to 3%. Additionally, fully closing the tuition window by FY2022 would result in a percentage increase above the 3% cap for students taking between 13 and 18 credit hours. Many other institutions are discussing holding tuition and fees flat for FY22. Continuing to increase tuition may impact our access ranking in Colorado.
MSU Denver can increase student fees by up to 5% without student vote to cover mandatory cost increases, which could help auxiliary funds offset losses. There are no new mandatory-fee proposals this year, but one program-fee request has been submitted to the Student Fee Review panel. A number of fees were either waived or combined due to Covid-19 impacts, and MSU Denver will need to determine if this fee structure should remain or the University should shift back to a more traditional fee structure.
Higher Education Emergency Relief Fund funding
When the most recent HEERF CARES II Act was passed, MSU Denver received $26.4 million, broken down into $7,195,042 in direct student aid and $19,171,046 in institutional aid. The University’s size and Pell-eligible student population were big drivers for the funding allocation.
MSU Denver is also anticipating three state and federal funding scenarios that could result in a $23 million deficit, a $6.2 million surplus or a full award from the federal and state governments that returns the University to full funding (with some debt-service support and a cost-of-living increase), bringing the institution to a surplus of $19.5 million. See graph for possible funding-scenario details.
At the BRC meeting, staff emphasized a presentation to the Board of Trustees that discussed the following priorities for funding consideration:
- Infrastructure: Specifically, improvements to buildings and addressing deferred maintenance, technology needs, such as an outdated enterprise resource planning system that creates inefficiencies and increases risk.
- Understaffing and compensation: Highlighting burnout and turnover due to inadequate compensation. Understaffing and lower-than-ideal compensation can also lead to failed searches, increased expenses for recruiting and brain drain, and lost revenue due to retention issues.
- Initiatives such as developing the Health Institute, Classroom to Career Hub, Cyber Range at MSU Denver and the academic-program reorganization project.
- Ongoing costs of Covid-19: This includes costs related to cleaning, social distancing, remote learning, reduced state funding due to fiscal shortfalls without stimulus funds and the potential of competitive pricing as other institutions hold tuition and fees flat.
- Budget requests are due Wednesday.
- The Feb. 26 BRC meeting will include a spring-enrollment update and Phase I compiled requests.
- The April 9 meeting will include Phase I recommendations and a conversation on tuition and fees as well as mandatory budget changes.
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