July 1, 2019
FY 2020 budget update
Dear Faculty and Staff,
The last piece of the puzzle for our FY 2020 budget planning fell into place when the Kansas Board of Regents established tuition rates for the 2019-2020 academic year at the June meeting. Coupled with state appropriations and our enrollment projections for this fall, the budget picture is in sharper focus.
This next fiscal year will be challenging from a budget perspective, which is causing us to make difficult but important decisions. We must be even more prudent with our resources while maintaining the quality of our education and services. We ask for your support in making these budget adjustments.
There have been some positive developments. The Kansas Legislature passed an appropriation bill that provided additional state funding for several initiatives. As the session closed, the Legislature:
- Restored approximately $6.2 million in state funding for the university.
- Restored $4 million for the Global Foods System appropriation, bringing it back to its original $5 million level.
- Provided partial funding for a 2.5% cost-of-living adjustment, or COLA, pay increase for employees who were hired before June 16, 2018.
- Provided $520,000 for the Polytechnic Campus to hire additional pilot instructors and $650,000 to K-State Research and Extension for statewide fire suppression efforts through the Kansas Forest Service.
We are extremely appreciative of the initial efforts of the Kansas Legislature and Gov. Kelly to provide additional state dollars to fund the university. However, state funding only accounts for approximately 18% of our total funding. K-State, like many higher education institutions, relies heavily on tuition revenues to fund ongoing operations.
The Board of Regents held the undergraduate tuition rate flat, but approved a 1.5% tuition rate increase for all graduate rates and nonresident undergraduate rates for the Manhattan, Global, Polytechnic and Olathe campuses effective fall 2019. The College of Veterinary Medicine held its tuition flat for the third year in a row. Tuition revenue provides approximately 26% of our total university funding and is projected to be down this year. The enrollment picture continues to be mixed as we focus on stabilizing in-state recruiting and ramp up efforts out of state. We know this takes time and continued strategic investment.
Limited resources require focus and clear priorities in order to manage the university well. We have established three areas as budget priorities for FY 2020:
- Faculty and staff salaries and benefits.
- Student scholarships.
- Strategic enrollment management initiatives to boost enrollment and student retention, success and progression to graduation.
Despite receiving only partial state funding, we are implementing the 2.5% COLA increase to all eligible employees. In addition to the $6.3 million for the COLA, the university is investing $2.6 million in increased employer fringe benefits costs, faculty promotions, professorial performance awards and the Total Rewards under-market staff salaries initiative. Additional investments include the newly implemented parental leave policy and $592,000 for the increased costs of employee and dependent scholarships and GTA waivers.
We are prioritizing investment in new enrollment management strategies, the lifeblood of our university. This includes $2.1 million for our revamped scholarship program and $1.3 million for accelerated marketing efforts. We are adding recruiters focused on our key out-of-state markets and supporting them with robust marketing campaigns.
Another key investment is our new customer relationship management (CRM) system, which is essential to support recruitment, retention and outreach to students.
We believe these are foundational investments in our ability to attract new and broader student populations.
So what does all this mean? The bottom line is that we still need to reduce our overall FY 2020 budget by 4.3%. This will be done through a 3.9% base budget reduction to main campus and extension revenue centers, and a 4% base budget reduction to all main campus service centers. In addition, we are implementing several strategic targeted budget reductions to maintain our previously mentioned investments. The College of Veterinary Medicine, K-State Polytechnic, K-State Olathe, Global Campus, and K-State Research and Extension will receive reductions in their subvention allocations. University funds supporting the KSU Institute for Commercialization will also be reduced.
This year's reductions come on the heels of multiple years of budget cuts for the university. Over the last six years, we will have removed at least $47 million from our operating budget. As the state’s major land-grant institution, we play a unique role in providing access to education, research and outreach to the communities and citizens of Kansas. Balancing this mission with reduced budgets requires new ways of thinking and more creative solutions. I am sure that K-State is up to this task.
As a university community, we are in the second year of a five-year strategic process designed to dramatically transform our university. We are changing our enrollment strategies and operating processes to be nimbler and more efficient, while better meeting workforce and societal needs. Our new budget model will support and reward strategic decisions that meet market demand and generate growth.
I firmly believe we are on the right path. Let's all pull together to serve our students, our state and our many partners to ensure the future success of K-State.
Richard B. Myers