October 6, 2016
From Provost and Senior Vice President April Mason and Vice President Cindy Bontrager: An update from the University Budget Advisory Committee
Submitted by April Mason and Cindy Bontrager
Dear Faculty and Staff,
Last fall, the University Budget Advisory Committee, or UBAC, implemented the university's first open budget enhancement request process. This was an opportunity for all units to request general use funds in a transparent and uniform manner for their most important needs over a three-year budget planning window. Twenty-two requests were submitted from 14 units, totaling more than $23.7 million in funding needs. As we noted in our May 24 letter, due to budget constraints, a number of the proposals were returned to the requesting units and implementation of others was recommended to be deferred until FY 2018 and FY 2019.
The University Budget Advisory Committee met on Aug. 25 to begin the process of reviewing revenue projections and prioritizing expenditures for the university's FY 2018 budget. During the meeting, the committee discussed the potential fiscal impacts to the university's FY 2018 budget, including those enhancement request proposals, which had been deferred previously. The committee also discussed the critical need to focus on faculty and staff salary needs in the upcoming fiscal year.
After reviewing the university's financial outlook and considering the extreme pressures, which exist across the academy for some type of compensation action in FY 2018, the committee recommended that the call for budget enhancement requests from the deans and vice presidents this fall be suspended. After discussion in the cabinet, interim President Myers approved this recommendation. Those enhancement requests whose implementation was originally delayed until FY 2018/19 will remain under consideration and prioritized accordingly within the three year planning horizon FY 2018 through FY 2020.
As we turn our attention to planning for FY 2018-FY 2020, many of you may have read about the request by the State Budget Director for all agencies and universities to submit a 5 percent reduction plan for next fiscal year to the Governor's Budget Office. General Myers recently described this request best when labeling it as a "budget drill." In the past, all state agencies, except Regents institutions, have been asked to submit this information as part of the annual budget request submitted to the governor's office and the State Legislature. This year, the Regents universities were asked to participate in the exercise.
Provided below is the narrative information included in K-State's budget submission describing how the university would implement a 5 percent budget reduction for main campus and the impact of the cut on the university community. Similar narratives were included in the budget requests for the College of Veterinary Medicine and the Extension and Research sub agencies.
The budget instructions from the Division of the Budget directed that the university submit "a reduced resource package of 5.0 percent" for the FY 2018 and FY 2019 budgets. The reduction amounts for the KSU Main Campus are $4.9 million for each respective fiscal year. Presently, the university would plan to allocate the state general fund reductions across-the-board to each unit head, president, provost/senior vice president, vice president and dean based on their current year general use fund allocation. General use funds comprise state general fund appropriations and tuition funds. These units will determine how the reductions will be absorbed to mitigate the impact to the mission of the university. Since the reductions are distributed to each unit head, each function of the university is impacted including instruction, research, public service, academic support, institutional support, student services and physical plant.
State funding is still an essential and substantial component of the financing model for Kansas State University. We strive every day to ensure that state funds invested in the university are effectively managed and produce real results for the Kansas taxpayer. Further reductions in state funding will degrade the university's ability to fulfill its land grant mission for the state and to achieve our K-State 2025 vision of a Top 50 public research institution. In addition, more financial burden will be placed on students in the form of increased tuition and fees.
After reviewing the budget submissions from all agencies, the State Budget Director announced last week that the governor will not propose across-the-board cuts to state appropriations in the budget he will submit for the 2017 Legislature's consideration.
As always, we continue to monitor not only the state's fiscal condition, but the university's as well. We recently announced a slight drop in enrollment for fall 2016, which will have yet-to-be-determined budget implications. At this time, we anticipate finalizing any FY17 budget adjustments later this fiscal year. The University Budget Advisory Committee will continue to work throughout the academic year to prioritize and recommend planned expenditures and a balanced budget for FY 2018.
We are facing potential state general fund budget cuts, enrollment challenges and increased operating costs at a time when we also need to address compensation needs as a priority across the university. It is more important than ever that we continue to work together as the K-State community to adjust to our "new normal" fiscal environment.
Thanks for all you do!
Provost and Senior Vice President
Vice President for Administration and Finance