I'm Michele Skalicky here with Missouri State University President Biff Williams. Thanks for joining us.
Williams: Thanks for having me.
Well, today we're going to do a follow up from the budget town hall that was held earlier this month. Vice president of Administration and Finance Matt Morris said the university recently turned $3.2 million in freezes into cuts after the fall census and that MSU is projecting a $3.9 million shortfall for Spring 2026. Can you put this in perspective for us? What does this mean for the university?
Williams: Sure. As we were looking at the budget, we looked last year at summer and fall, and we were looking at our projections of how many students would come. We look at our enrollment mix, whether they're degree seeking or they're concurrent enrollment or they're into the dual credit, and we had a shortfall of about $3 million. We also projected that we may have a shortfall this year if you look at our fall enrollment and how that has declined slightly. Our headcount looks great. But the degree seeking has for the past decade been diminishing. And so degree seeking, the difference between degree seeking and dual credit is from about $4000 to $400 in revenue. And so we have to take those into account. We're predicting that the spring would be about a $3.9 million deficit. That's just looking at that enrollment mix and what's the decline. We are historically projecting this. So usually our enrollment declines from fall to spring every year, and so this is just making sure that we are being proactive instead of reactive.
And, of course, student numbers are down based on the enrollment cliff that was predicted. There were fewer kids born in 2007, 2008 when there was a recession, and now we're feeling the impact of that. And degree seeking students are important for any university to thrive. Morris said tuition and fees make up 59% of the revenue for the FY 26 budget. And as you said, degree seeking students pay more than dual credit students. What is MSU doing to attract and retain those types of students?
Williams: So if you look at what we're doing with enrollment management, for example, we, with the retirement of Rob Hornberger, we elevated that position to be a cabinet level. We have a vice president for enrollment management now, Dr. Dawn Medley, who came to us from Drexel, she has 25, 30 years experience in the enrollment management area. She has brought great expertise. We're looking at how we attract students here. We're looking at our messaging. We're looking at our branding. We're looking at what schools do we go out to? Where are we recruiting? How are we recruiting? We're doing a total analysis of what we have done. We also need to really focus on our brand in that there's so many great things that are happening at our university. That is one of our strategic goals for our strategic plan is branding and identity of getting our faculty and staff to brag more, to share all the great things that are happening on our campus so that students are aware of what's happening on our campus. We see right here in our backyard in Springfield some of our high school students aren't aware of some of these prestigious programs that we have on our campus, so we need to do a better job of really promoting those and recruiting the students into those programs.
And of course, we have to talk about state appropriations because they make up 38% of the FY 26 budget. With a legislative session just around the corner, what are you doing to make sure legislators know the need?
Williams: So we've met with all the local legislators so far, and we've talked about what our requests are this year. We are partnering with the other universities and colleges here in the state of Missouri and asking for a 4% core increase. Inflationary costs, it's very important for us to remain affordable. If you look at our undergraduate tuition, we're right in the middle of the pack. That's what we want, where we want to be. We also want to make sure that our local legislators also know that when you're looking at cost per FTE, we're second to last in the state. And so we want to make sure that if there are cuts, that they're fair cuts, so that not all things are equal amongst the universities in the state of Missouri. So we've shared with them our request for the core increase. We also have Mosers, which is our retirement benefits where that has increased every year. The approved increase this year will cost the university about $2.2 million to cover that. And so we're already in a deficit to cover that. And so we've asked our local legislators for relief for that 2.2. We are excited that we have Mosers and that benefit because, if you look at our faculty and our staff, they come and they stay forever because you have such great benefits. It's a great place to work for. It's a great community to live in. But for the university to continue to cover that increase — our benefits alone are going to reach about 50%. So if you're hiring somebody for, you know, even numbers, $100,000, you have to come up with $150,000 to employ that individual. That's higher than I've ever seen in any institution in which I've worked. But we want people to come and stay here. But we have been very clear with our legislators that we will need assistance there.
And I know the state revenue is not as good as it was, you know, even a year or two ago. And, you know, Governor Kehoe has made it known he wants to eliminate the state's income tax, which would reduce revenue further. The Missouri Budget project says the state's expected to collect $8.7 billion in individual income tax revenue this year. How optimistic are you in these, you know, these times that you'll be able to get the money that you're asking for?
Williams: Well, we have to remain optimistic. There's no use of being pessimistic at all. I'm optimistic in what we are offering our students here at Missouri State University that we're offering a rigorous but affordable education. Our students tell us as they leave that they're excited to be able to get out into the professional world. We're going to have close to or just over 1,300 graduates on Friday (12/12), which we're really excited about. We remain optimistic that we're providing a valuable education. And if you look at the economic emphasis of our state, you can't have a great economy unless you have education K through 16. And so we have been sharing that with our local legislators. I feel like when we speak to our legislators, they understand the importance of a higher education. They see the value of it, and they see the significant role that it makes in a strong economy.
And I know you're going to be asking for a couple of budget items for projects — McDonald Hall and the King Street Annex?
Williams: Yes. So we have MO Excels. MO Excels is a program where we match dollars with the state, and we've done several MO Excels programs on our campus right now. Cheek Hall the renovation there, which is around a $17 million renovation. We received significant MO Excel's money there, but we have been working with our partners to decrease mental health worker shortages. We've worked with Burrell and Cox and Mercy and others. We added our PsyD program a few years ago. We spent about $2.5 million last year to renovate some of the King Street Annex. If we were able to do the second phase of those, we'd be able to increase our numbers of students in those professional areas by 150%. And so our request is $2.1 million. We have about $900,000 of matching funds there. So that would be a significant request from us. And then with McDonald Hall or McDonald Arena, it's an icon on our campus. It's one of the older buildings we want to repurpose that. We've been thinking for quite some time, what is it that we do with that building? We have two areas we need to address intercollegiate athletics. What do we do there? Where do we put the football locker room? Do we open up the tunnel? But also where do we relocate? The weight room has a lot of space, but then we have a very prestigious ROTC program. We have the only ROTC program in southwest Missouri. It's a distinguished program. They need similar facilities for training and for classroom space, and we want to recognize that program. So on the academic side or on the university side, we're asking for...$23 million. Roof, HVAC, classroom space for ROTC, and then anything related to athletics we'll fundraise.
What else would you like the public to know about MSU's budget and outlook?
Williams: I think we're being proactive. Our budget's fine. We are strong. But we see the tea leaves. We see that, you know, it's not in those COVID days where you have all the extra money that's floating around. We also look at state appropriations and that those are diminishing all across the country. And so as we created our strategic plan, we're charting our own course. We know where we want to go and where we want to be, but we need to be fiscally responsible. So we are making sure that we're aligning our strategic plan with our resources and, thus, we don't want to be reactive with our budget. We want to be proactive, and we want to make sure that every dollar is accounted for and that every dollar is working for the success of our students.
I know the university has reserves. What's in the reserves now, and where does it need to stay at?
Williams: So the board passed two years ago. We've had a reserve, a minimum of $40 million, I believe three years ago they approved it to go to $50 million. And so that's our rainy day fund. That's if something goes really, really wrong that we can support salaries and things for 2 to 3 months so that we can continue to operate as a university. These carry forward funds come from a variety of different areas from lines that are opened up and then those carry forward funds come in. We've really utilized those carry forward funds to help with these facility renovations. Over the past decade, there's been a lot of state and federal money. And so Vice President Morris shared during our town hall that we were getting $4 for every $1 that we were investing, which that's something that we really needed to do. Currently we're about, well, as of June 30th, we were at $60 million. We've been doing a number of projects on our campus. At one point we peaked at $95 million. That's when the Board of Governors decided that we'd raise the level to $50 million. But also, we needed to make sure that we made every dollar count for us on our campus. So there's been things like the McDonald Arena roof repair, the Kemper Hall addition, Blunt Hall we've invested in, Looney Hall nursing simulator, all in West Plains, the agricultural innovation hub. We have the Judith Enyeart Reynolds Performing Arts Center, the Blunt Hall, the Kampeter Hall, the Cheek Hall, that all went towards those renovation projects.
Lots of projects done this year, for sure. Is there anything else that you would like to add?
Williams: No. I'm excited that we're in the position that we're in. I think we have a lot to brag about, a lot to be excited about with our new strategic plan and going, definitely going in the right direction.
