After enacting approximately $5 million in cuts to Murray State’s budget this year to balance its deficit, the University will now incur unforeseen additional expenses resulting from state-mandated pension contributions and health insurance costs.
As announced by Interim President Tim Miller in an email to the University body last Thursday, Murray State will most likely be responsible for paying the state of Kentucky $1.7 million during the 2014-15 fiscal year in an annual pension contribution, as well as paying $700,000 for the University’s health care.
“We’re going to be responsible for about $2.5-$3 million which we didn’t anticipate,” Miller said. “So we need to look for places to either increase revenues, such as recruiting more students, or reduce expenses.”
In preparation for impending cuts, Miller has contacted Steve Cobb, dean of the College of Science, Engineering and Technology, Tony Brannon, dean of the Hutson School of Agriculture and Tim Todd, dean of the Arthur J. Bauernfeind School of Business to serve on respective committees investigating areas pertaining to students, faculty and staff where prospective cuts could be made, all as part of a larger budget task force.
Also needing to be paid back during this fiscal year is $1.1 million, which was withdrawn from the University’s reserves during the establishing of this year’s budget.
Jackie Dudley, interim vice president of Finance and Administrative Services, said the total deficit Murray State needs to balance before next year totals approximately $3 million: a combination of the pension contribution, health care costs and replenishing the reserve money borrowed.
“We will find those funds,” she said. “How we find them we don’t know, and that’s why President Miller has established the budget task force.”
Dudley said there most likely will be minimal increases in tuition for students but not more so than any other year.
Other possible and likely strategies for balancing the deficit will include the reallocation of expenditures on campus and revenue enhancements, the installation of new programs to bring money into the University.
Beside these unforeseen costs Murray State must prepare to pay, this year’s budget has been further stressed by the overestimation of the University’s enrollment.
Murray State had anticipated an enrollment increase of 1.5 percent, but according to projected totals was not able to reach this goal. While enrollment totals have not yet been finalized, Dudley said last week that the total increase was approximately 0.9 percent.
Dudley said depending on the mix of students who are now attending Murray State this year, however, such as more out-of-state students who pay higher tuition or an influx of students who will receive fewer scholarships from the University, Murray State could still technically make up the difference in enrollment projections.
Propositions to the budget will be put before the board in December and Dudley said she suspects budget cuts for next year will be at a minimum of $3 million dollars. Following the budget proposal, a draft of the budget will begin to be made in February she said.
Said Dudley: “This is our new normal. These budget changes we are making are attempting to be rather permanent; they are not just for one year. We really are changing the way we do business.”
Story by Ben Manhanke, Assistant News Editor