Each month on KSMU, we sit down with Missouri State University President Dr. Biff Williams to discuss a topic of our choosing. Williams could not join us for the April program. Instead, Michele Skalicky talked with Matt Morris, the vice-president of administration and finance at Missouri State University.
You can hear their conversation by clicking on the "listen" button above.
Where are you at in the process of creating a budget for the next fiscal year?
Morris: The budget process is fully underway. April is a busy month. It's when we're packaging financial aid. It's when we're calculating cost of attendance. So the April board meeting will be fee schedule, decision time. And then we will continue the work with our executive budget committee.The May board brings a budget update to the board of governors, and then ultimately, the budget will be approved in June. So we've had numerous meetings with the university council, executive budget committee, administrative council, the board. And so, yes, ma'am, it's six months audit and then six months budget.
It's a busy time for you, President Biff Williams said MSU is facing "a challenging budget year." Why is it a challenging year for the university budget?
Morris: Yes, ma'am. So our fiscal year runs July 1, 2024 to June 30, 2025. That's Fiscal Year 25. And we have census dates that are scattered throughout our fiscal year. And that census date is the same year after year, so that we can compare apples to apples of where we stand. The spring census date is extremely important because it gives us a read on how we're doing with our revenues. And so ultimately at spring census, which was February the 18th, we were approximately $3 million short on revenue. First question, of course, is why? And primarily I would highlight that as it all boils down to enrollment mix. So you've seen a tremendous growth in headcount at the university. Record breaking headcount. Much of that headcount comes from dual credit, which is a lesser revenue producing segment versus degree seeking students. And so with that enrollment mix, that was a primary contributor to that shortfall in revenue.
And, you know, as you just mentioned, first year degree seeking students, the number is down, but also graduate students. Do you expect that to continue, and do you have any guesses as to why that is?
Morris: Projections right now from Institutional Effectiveness would tell us that we will be relatively flat for next fiscal year. So that's what we're modeling. Along with that, though, I'm seeing under President William's leadership a, a strong focus on enrollment. And so with that enrollment emphasis, every president's cabinet meeting on Tuesday mornings, we get an update on enrollment, the status of those segments that you referenced. And then ultimately, what can we do in all of our areas? Many of us, can think that it's enrollment management or admissions that's responsible for enrollment. But I've just seen a renewed emphasis on we all contribute. I'm in administration and finance. And so I picked up trash on my way over. That contributes to enrollment. How we greet people friendly. How we open doors for folks. How we — a friendly face, again, all those intangibles certainly contribute to a welcoming community here on our campus. The other thing that I've experienced under President Williams is with the recent announcement of Rob Hornberger vacating his spot through retirement, President Williams has identified that enrollment is extremely important. And so he, instead of that position reporting through a vice president, he is bringing that position to his president's cabinet table. So enrollment management will be clearly at the table in all discussions.
And I want to throw in here that Ron Hornberger is the associate vice president for enrollment management and services.
That will be a national search that will take place. And again, we're like many institutions where the focus, of course, is on enrollment.
The budget for the State of Missouri isn't final yet, but what are you expecting to see from the state for Missouri State University? And how does that compare to the past?
Morris: Yeah. So the governor, Kehoe, in his state of the state address in his recommended budget, had 1.5% increase in state appropriations. That equates to approximately $1.5 million for the Springfield campus. And so how that compares to the past is, I would tell you, the past four years have brought significant increased appropriations to higher education generally. A lot of infusion of one time monies from the state and federal funds that have come through. We've used most of that since it's one time money. We've leveraged that for capital projects. So you've seen Roy Blount. Hall. Kampeter. Cheek. All of these projects, MOExcels that are designated for workforce development through agriculture, construction management and so on. Many areas impacted through that infusion. So I would just tell you that what I forecast from state appropriations is simply that we're going to see a stabilization and slower increases that take place, like 1.5%. Again, we're grateful for any increases that are obtained, but 1.5%, as you know, does not keep up with inflation or even our pension increase. We have a Moser's pension that our employees, we have an employer contribution to our employees' pension. And again, at 1.75 million of that increased expense, the state appropriation does not account for just that one single increase.
So what are you going to have to do to or what are you doing to make up for the shortfalls?
Morris: Yeah. So as soon — we've got a great team that works so well together. And so as soon as that $3 million shortfall was identified, again, we've been through this before, right? It's a — we group up and ultimately identify where we need to move things forward. But bottom line is we need to manage expenses. And so that $3 million, we took the FY 25 operating budget, we broke it down to percentage wise who has what portion of the budget. They then took their fair share of that shortfall. So then cost centers then evaluated what they would do to account for those savings. We asked them to identify ongoing savings of that portion that they were responsible for. When 80% of your budget is people, it's commonplace that people look at their open positions that aren't filled. Are any of those — could they be used for ongoing savings? Some did elect to use some operating funds, but again, it was a decision point left to the cost centers for them to deliberate with their units and ultimately they came to the conclusion. So we have accounted for that $3 million shortfall. We're going to leave that freeze in place on into FY 26 until we see truly how enrollment numbers come in at that fall census, and then decisions could be made following that.
Do you know if tuition increases will be necessary in the near future?
Morris: Yeah, so much like other institutions, public institutions within our state, tuition increases will certainly be taking place. And I can get fairly specific because at the April Board of Governors meeting on April the 16th, we will be asking the board to approve the fee schedule, which they are, they do per our governing policies. Other institutions are in the same camp, because again, this time of year is when financial aid and is packaging aid those types of things so they need to know what those rates are. So, because the appropriation is not keeping up with inflation and because tuition and fees account for 58% of our operating budget, certainly then we have to look at tuition and fees. And so we're proposing for undergraduates, and again, I'll speak from a residence standpoint, because 80% of our students come from the great state of Missouri, and so with resident tuition rates, we're looking at ...4% increase, which is $12 a credit hour. On the graduate side, it's 4% as well. It's $15 a credit hour increase that would go up is what we're looking at. I might also note that, again, all things being equal, not accounting for other institutions moving theirs up, which we know through asking, that many of them are in fact, most are ranging anywhere from 2.9% to well above 5% in their increases.
But we know that we will maintain our place in the rankings. We go from highest to lowest on the annual expense of tuition and fees, and for undergraduate, Missouri State University falls six out of 13. We would maintain that ranking. On the graduate side, we're eight out of 12, going from highest to lowest. I say 12 because Harris-Stowe does not offer graduate courses. And so we maintain our rankings with this 4% increase. Students. In fact, I saw Tamia (Schiele), who is the Student Government Association president, out in the lobby of Strong Hall here, and she indicated again that they had good dialogue on these increases. Students were really appreciative to know that we maintain our ranking, that we remain in the middle of the pack. And so, again, that's an important element that students are represented in our executive budget committee as well as faculty and staff.
