April 19, 2011
A message to ULM faculty and staff from ULM President Nick J. Bruno
There is considerable discussion around the state concerning budgets for higher education. I want to share some important information with you about our current budget for the fiscal year, a preliminary look at next year's budget, and the effects of rising mandated costs.
As you are probably aware, the governor released his Executive Budget on Friday, March 11, 2011.
The governor's budget is intended to stabilize funding to higher education; however, it does include several proposals which must be approved by the legislature for fiscal stabilization to be realized.
I attended the House Appropriations Committee meeting on March 31 as requested by our System staff.
This was a very preliminary meeting. The new Commissioner of Higher Education, Dr. Jim Purcell, presented the higher education portion of the executive budget to that committee.
Each system head was afforded the opportunity to speak; however, at that time specifics were not available as to how the budgets for each institution were developed.
Since that time, the Board of Regents, through the University of Louisiana System, has provided us with more details on the calculation of each institution's projected budget for fiscal year 2012.
Our budget consists of three primary sources of funding: state funds, statutory dedicated funds (which are specified by legislation), and tuition and fees paid by students.
Our current year's budget totals $83.2 million, 58% from state funds and 42% from tuition and fees.
You should note that our actual, total revenues for the current fiscal year are projected to be approximately $82.6 million.
For fiscal year 2012's budget, if approved as submitted by the governor, we would receive budget authority of $83.9 million, 49% state and 51% tuition and fees. This ratio is approximately the same as the SREB averages.
Proposed changes to the tuition and fee structure include: 1) adjusting the base upon which the 4% operational fee is calculated to reflect current tuition and fee charges, and 2) allowing universities to charge up to 15 hours (currently tuition can only be charged for 12 hours).
These changes would total approximately $659,000 and $2.7 million respectively for ULM.
These amounts would be realized only if legislation that requires a 2/3 vote of the legislature occurs and our current enrollment is maintained.
We expect to generate approximately $3.4 million additional revenues from increasing tuition as a result of achieving our GRAD Act targets for this year.
Also included in the fiscal year 2012 budget is approximately $3.2 million in state funding which may only be available in fiscal year 2012.
At this time, these funds are considered non-recurring.
The source of these funds are primarily Federal Stimulus dollars that are being "shared" with K-12.
Another budgetary item that is not considered within the discussion of budget revenues is the matter of mandated costs.
I am sure you have heard about the rising costs of health care and retirement to public agencies around the state.
ULM also faces those increased costs of employee benefits.
The estimated increase in fiscal 2012 is $2.2 million.
As you can see, the increased cost of benefits absorbs 66% of the additional estimated tuition increase ($3.4 million) we expect from our GRAD Act authority.
The legislature will convene on Monday, April 25, 2011, and deliberation on the budget will begin.
The legislature will adjourn no later than 6:00 p.m., Thursday June 23, 2011.
As in the past, I am sure during that time many questions will be posed and the merits of the governor's proposals will be debated.
The uncertainty related to those proposals, which will require legislative approval, makes it impossible to estimate our final budget position at this time.
I will keep you informed throughout the process.
It is imperative that we as a university community do everything possible to assure that we aggressively recruit, retain and graduate our students.
For every 100 full-time students, approximately $460,000 is generated in annual revenues.
This is one factor that we as an institution can control.
In order to maintain our authority to increase tuition in future years, we must meet the targets set for ULM by the LA GRAD Act, which was passed in last year's Legislative session.
Provost Richters has been working diligently along with the deans, faculty and staff in preparing this year's report as well as next year's plan which must be submitted for approval.
Our success will require the entire university community's commitment in order to meet those targets.
As I have said on many occasions, our legislators are faced with many difficult decisions.
I have witnessed the past support ULM has received from our Northeast Louisiana delegation.
I am also confident they will make every effort to minimize reductions to our university.
I encourage you to thank them whenever the opportunity arises for their past efforts and ask for their continued support.
Soon I will ask the Vice Presidents to begin budgetary discussions, beginning with the departmental levels.
I continue to be optimistic that this university will remain strong and grow with our combined efforts during these challenging fiscal times.
Nick J. Bruno, Ph.D.