June 18, 2013
Monthly letter to campus from President Schulz includes a summary of the three year-salary plan, and the nearly 4 percent budget cut K-State received
Dear Faculty and Staff,
Welcome to the summer! I know we are in the middle of summertime as we see our new K-State first-year students, transfer students and parents on campus for new student orientation. If you see a family looking a little lost, be sure to welcome them to K-State and help them find their way!
The last several weeks have been a bit frantic — the Legislature finalized the higher education budget; we made presentations to the Kansas regents on proposed tuition and fees; and there was significant media attention about the impact of legislative decisions on accessibility to public universities.
I want to provide a summary of our three-year salary plan to the campus community, and to discuss how we intend to cope with the 4 percent budget cut Kansas State received. This letter is a bit longer than normal this month, but I want to be sure everyone has a thorough description of how we intend to proceed with a variety of financial issues confronting K-State.
So what are our guiding principles as we cope with less state support? Our university visionary plan, K-State 2025, is an important road map for how we make financial decisions. As we prioritize what we will fund and how we will handle our budget cuts, we must keep in mind our overall goal of becoming a Top 50 Public Research University. In my financial descriptions given below, I have framed our decisions around our K-State 2025 themes.
K-State Salary Plan
K-State 2025 Theme 5 specifically addresses excellence in faculty and staff, including total compensation competitive with aspirant university and regional employers. With this goal in mind, we are putting in place a three-year plan to address faculty and unclassified staff salaries. Several of the aspects of our salary initiative were recommended in the "Structuring Faculty Salaries Towards K-State 2025 and Beyond" report:
- We have increased the promotion increments to 15 percent of the K-State average annual salaries for faculty members moving from assistant to associate professor and associate professor to professor. This will take place immediately, and new contracts will be issued for those faculty promoted this academic year.
- We have put in place a plan to provide promotion enhancements to those faculty members who were promoted in the last five years to bring their promotion raises up to the 15 percent level. We currently do not have enough funds to provide the complete salary raise in a single year, so we will do this over a three-year period. This will take place immediately, and new contracts for faculty members who were previously promoted will be done as soon as practically possible.
- We have reinstituted the Faculty Salary Enhancement Award program and moved the enhancement amount from $2,500 to $3,000. We anticipate funding 107 of these awards for this upcoming academic year, to be made available by January 2014. These funds can be utilized to address any number of salary issues including compression, inversion and equity. An increased number of these awards will be available in FY15 and FY16.
- We will make available a 2 percent merit pool for faculty and unclassified staff this year, and 2 percent merit for both for the following two years. These monies will be available by January 2014, and will be allocated using the Kansas State University merit process currently in place as laid out in the university handbook.
- We will continue to fully fund the Professorial Performance Awards. These awards are available to faculty at the rank of professor every six years pending successful departmental and college recommendations. These are base salary adjustments at 8 percent of the average salary of all full-time faculty. This past year, 68 faculty members received these awards at $5,905 each.
This is summarized in a table format that is available online. The bottom line is that we anticipate investing $4.5 million in FY2014, $9.1 million in FY2015, and $7.2 million in FY2016 in enhancing our faculty and unclassified staff compensation. For faculty and unclassified staff, this will mean that during a five-year period, we will have provided salary pools of 2.5 percent (FY12), 1 percent (FY13), 2 percent (FY14), 2 percent (FY15), and 2 percent (FY16). These percentages do not include funds for promotions, promotion enhancement awards, professorial performance awards or faculty salary enhancement awards.
So, where will the money come from to fund our salary enhancements? We will use funds stemming from enrollment growth, tuition rate increases, and internal reallocation. Additionally, we will continue to advocate for competitive compensation with the Kansas Board of Regents and our elected officials. However, we have not planned on any additional state general funds in our three-year plan.
Anytime we spend money in one place, it certainly means that we cannot invest in other areas. For now, some areas will not receive general use resources. It will be a challenge to make substantial progress on graduate student stipends (Theme 3); adding substantial numbers of new faculty and staff lines or addressing many of the recommendations in the Human Capital Services Assessment report (Theme 5); or on state-supported substantive renovations to existing academic infrastructure (Theme 6); and adding substantial numbers of new faculty and staff lines (Theme 5). This does not mean that we won’t progress in any of these areas, but it does mean that we will need to find creative ways (i.e., non State General Fund) to provide monies to these areas of K-State 2025.
K-State Budget Cuts and Internal Funds Reallocation
At the conclusion of the legislative session, K-State's State General Funds allocation was reduced 4 percent or approximately $6.6 million. The total reduction came from a 1.5 percent across the board State General Fund cut ($2.5 million) in addition to a salary reduction cut of $3.9 million. The salary reduction will require some explanation. The Kansas Legislature looked at a snapshot of our salary budget in mid-March, and used this as a baseline to calculate salaries for the full year. If any positions were unfilled, this was deemed as salary savings – and the reduction we absorbed was the difference between our budgeted salary positions and our estimated salary expense for the year. This is why each Kansas regents university had a different number for their salary reduction cut — it all depended on how many open positions were present at a particular moment in time. Additional detail on these cuts is included online.
There was some positive news out of the legislative session. We maintained our special grants for enhancements to the College of Veterinary Medicine, enhancements to animal health research, the funding for the University Engineering Initiative Act, and a new $1 million planning grant for renovation of the Seaton complex for the College of Architecture, Planning and Design. These monies are designated by the legislature for a specific purpose, and cannot be used to fill in for State General Fund cuts.
Following the conclusion of the 2013 legislative session, we made our annual presentation to the Kansas Board of Regents with our tuition and fees proposal. For the upcoming academic year, we are requesting a 7 percent increase in our tuition and fees for the Manhattan, Salina and Olathe campuses, a 3 percent increase for the College of Veterinary Medicine, an increase in the per credit hour fee in the College of Architecture, Planning and Design (to $35 per credit hour) and establishment of a new $8 per credit hour fee for the College of Arts and Sciences. These new fees will be used by the colleges to support key strategic initiatives in their K-State 2025 college plans. The increased College of Architecture, Planning and Design fee will be utilized for technology improvements and as part of a comprehensive facilities improvement program. The new fee in the College of Arts and Sciences will be utilized to replace expendable supplies; repair and replace classroom/laboratory equipment; train graduate students; provide undergraduate and graduate research support; and enhance undergraduate advising.
Our tuition and fees proposal will generate about $11.7 million in new funds. A table listing how these funds will be utilized is online. In summary we plan on utilizing these funds as follows:
- Theme 2 (Undergraduate Educational Experience) and 3 (Graduate Scholarly Experiences) – Student Life Enhancements ($301,000), Distance Education Enhancements ($500,000), Student Financial Aid ($1 million), and GTA Waiver and College Fee Increase ($617,000)
- Theme 5 (Faculty and Staff) — KPERS and benefit rate changes ($169,000), Faculty Promotion ($938,000), Professorial Performance Awards ($468,000), Merit Salary Increase ($2.2 million), Targeted Faculty Salary Enhancement ($380,900), Promotion Enhancement Awards ($500,000)
- Theme 6 (Facilities and Infrastructure) — Utilities Infrastructure ($1 million)
- We will also use $2.9 million in tuition monies to offset the state general fund reductions.
In addition to the items listed for funding from new tuition and fees monies, we will be reallocating current K-State funds to assist with funding strategic K-State 2025 initiatives. We will be accelerating the phase out of State General Fund monies to athletics ($750,000); reallocate designated funds from the office of the provost ($800,000); and work with campus leadership to identify an additional $3.1 million. We intend to utilize these funds as follows:
- Theme 1 (Research, Scholarly and Creative Activities, and Discovery) — PreAward Services Support — $50,000
- Theme 2 (Undergraduate Educational Experience) — Student Success Initiative ($450,000), Student recruiting ($100,000)
- Theme 5 (Faculty and Staff) — Child Development Center support ($200,000)
- Common Element — Communications and Marketing support ($100,000)
- We will use $3.8 million of these funds to offset State General Fund reductions including $300,000 to cover the longevity base reduction for classified employees.
Thus, we will not use exclusively tuition monies to offset the State General Fund reductions, but instead will use funds from both tuition revenue and internal reallocation.
As you read through all of this, I want to close with some key thoughts. First,
K-State 2025 will continue to represent our pathway forward, and we will always seek funds from a variety of sources to fund strategic initiatives including state funds, federal funds and philanthropic funds. My descriptions given above only represent this year's investment of State General Funds.
Second, one of the best characteristics of a university environment is that all voices can be heard on any topic without fear of retribution or coercion. The topic of faculty and staff salaries has been a significant topic of campus discussion over the past year with many differing viewpoints offered in a variety of forums. I would like to express my appreciation for the civility of these discussions across campus — whether they occurred at the departmental, college or university level. I encourage all of us to continue to be passionate about our viewpoints while remaining collegial — the K-State way.
Third, K-State's primary mission is to serve as the land-grant university for the State of Kansas. As such, K-State Research and Extension is an integral part of our university and part of what makes us unique as an institution. This is reflected in Theme 4 (Engagement, Extension, Outreach, and Service) in K-State 2025. K-State Research and Extension does much more than support a single college — funding goes to more than 20 academic units spread across several colleges. Thus, our budgetary plan as laid out in this letter supports this important part of our mission as we seek to become a Top 50 Public Research University.
Finally, I am happy to answer questions at any time about the budgetary items outlined in this letter. As in previous years, April and I will be hosting college and similar unit open forums in August and September to provide additional details and hear your concerns and suggestions. Faculty Senate is planning a general faculty meeting for the fall semester, and we would be pleased to also entertain comments and suggestions at that time. Finally, I attempt to answer my email in a timely fashion, and am happy to respond to suggestions that way as well.
If you are still reading at this point, thank you! I hope your summer is productive and that each of you find some time for reflection and relaxation.