August 11, 2016
University Budget for Fiscal Year 2017
Submitted by April Mason and Cindy Bontrager
Dear Faculty and Staff,
As we get ready to begin the new academic year, we wanted to update you on the FY 2017 budget and the Kansas Board of Regents actions on the university’s tuition and fee proposals. As noted in our May 24 letter, the university submitted a 5.8 percent tuition increase for Board of Regents approval. The Board approved this rate increase at its June meeting. The Board also approved the requested increases to the College of Business Administration and College of Engineering tuition surcharge. Lastly, the Board approved an increase to the College of Arts and Sciences student credit hour fee, as well as the privilege fee increase requested from our Student Governing Association.
While it is never an easy decision to raise tuition or fees on our students, this year's rate increase was a critical component of budgetary actions, which were necessary to balance our budget. We had to craft a balanced budget in the face of declining revenues due to higher than expected state budget cuts and our academic year 2015-2016 enrollment challenges. We also faced increased operating costs and the need to make some critical investments in faculty, staff and infrastructure. At the end of the day, the new revenue from the tuition rate increase was insufficient to balance our budget and the Main Campus and Research/Extension general use budgets were reduced by approximately 3.85 percent.
Based upon recommendations from the University Budget Advisory Committee, President Schulz approved the allocation of general use university funds for FY 2017 for operating and salary enhancements. Provided below are the allocations categorized by K-State 2025 themes:
Projected Fiscal Year 2017 Expenses by 2025 Theme
|Theme 2: Undergraduate Educational Experience||Total|
|Theme 3: Graduate Scholarly Experience|
|Instructional Fees/GTA Tuition Increase||$498,184|
|Theme 5: Faculty and Staff|
|Targeted Faculty Salary Enhancements||$688,307|
|Faculty Promotions/Professorial Performance Awards||$944,175|
|Base Funding Support Unclassified Professionals||$135,528|
|College of Business Faculty and Staff Positions (from fees)||$740,057|
|College of Engineering Faculty Positions (from fees)||$1,547,622|
|Human Capital Services-Software||$115,500|
|Facilities: Support Staff for New Academic Buildings||$681,492|
|Theme 6: Facilities and Infrastructure|
|Utilities: Debt Service and Utility Costs for New Academic Buildings||$5,383,133|
|FY 2017 Total||$11,431,998|
This year, more than 40 percent of our commitments are investments in faculty and staff. The tuition surcharge increases provide base funding support for 10 new faculty and five unclassified positions within the Colleges of Business and Engineering. Prioritization of faculty salaries continues with investments in targeted faculty salary enhancements (TFSE), increased faculty promotion allocations and professorial performance awards. This year, upon the recommendation of the Faculty Compensation Task Force, up to 10 percent of the TFSE awards were available for each college to use for regular, non-tenure track faculty positions.
FY 2017 also saw significant investment in our utility and academic infrastructure. The new facilities will provide additional academic and research space, and the necessary resources were provided for the utility and staffing needs required to maintain this additional square footage.
One other FY 2017 budget item we would like to bring to your attention is the additional payroll period, which will occur in FY 2017. As noted in the July 5 K-State Today article, a normal fiscal year has 26 payroll periods. Every 11 years, due to the dates on which the biweekly payroll periods occur, FY 2017 will see a 27th payroll period. The Kansas Legislature appropriated funds provided by K-State of approximately $2.9 million to assist with this additional pay period. However, this funding only covers approximately 50 percent of the additional general use payroll costs. In addition to the 3.85 percent base internal reallocation mentioned above, units are also covering the remaining one-time extra pay period costs with their existing resources. Units with non-general use payroll funding will be responsible for covering 100 percent of the extra pay period costs.
Unfortunately, our budget situation prevented us from providing a merit pool for all of our faculty and staff. Developing a sustainable compensation pool remains a critical priority for us. As we noted in our May letter, our constrained budget environment is a new normal that we must all work together to address.
One strategy recently considered by the Cabinet, with feedback from the Deans Council, was a voluntary early retirement program as a way to strategically reallocate our resources. It was determined that such a program is not in the best interests of the university at this time. The program would have constituted yet another budget cut to our units in addition to those mentioned above already put in place to balance the FY2017 budget. Such a program implemented now would have reallocated a small pool of general use funds, but would have done so potentially at the expense of our ability to meet current needs and grow as a public research university.
That said, we must continue to work to identify additional revenue sources and manage our costs. To that end, Pat Bosco, Vice President for Student Life and Dean of Students; Marcelo Sabates, Associate Provost for International Programs; Sue Maes, Dean of Global Campus; and Carol Shanklin, Dean of the Graduate School, have been charged with developing strategic recommendations to address our enrollment challenges, consistent with the recommendations of the Strategic Enrollment Management Task Force. In addition, we will be exploring efficiencies within our administrative functions through a committee co-chaired by Cheryl Johnson and Cindy Bontrager that will be charged by Gen. Myers early in the fall semester. A subcommittee of the University Budget Advisory Committee also will be formed this fall to recommend a multi-year plan to strategically address the need for additional differential tuition and university fee strategies.
It will take all of us embracing a different way of doing business in order to continue to provide our extraordinary K-State educational experience and our progress towards the goal of being recognized as a Top 50 public research university. We are confident that working together we can prepare for a new president, rise to meet our opportunities and challenges, and thrive as a university fulfilling our land-grant mission now and in the future.
Thanks for all you do!
Provost and Senior Vice President
Vice President for Administration and Finance