Dr. Jon Quistgaard
Today, the University announced its first set of proposed preemptive steps to address an anticipated budget shortfall for fiscal years 2010 and 2011 now expected to total approximately $2 million. The announcement comes as part of the University's ongoing discussions with the campus community regarding its budget for the next two years.
Specific details on Bemidji State's plans to address the projected shortfall are limited due to a number of factors that remain unknown, including the amount of federal stimulus money the University will receive and next year's tuition level. However, the preemptive measures announced today are being implemented based on four key assumptions:
Based on those four assumptions, University officials announced a proposed plan to identify $1.25 million in permanent budget reductions for fiscal year 2010 and an additional $750,000 in fiscal year 2011, for a total of $2 million.
By area of responsibility, the reduction would come from the following:
"Even though key variables have yet to be finalized, the University is moving forward in identifying its areas of reduction," said Bill Maki, vice president for finance and administration. "We are at the point where we need to begin moving forward with plans for next academic year and ensure that our budget is balanced."
Further details on the University's budget plan will be unveiled in a future open forum as unknown factors become clarified.
The announcement of the State of Minnesota February economic forecast and the passing of the federal stimulus bill — American Recovery and Reinvestment Act of 2009 have resulted in changes in the university's fiscal year 2010 budget projections. The projected impact reduced the FY2010 budget reduction target from $2.5 million to $2.0 million.
The state of MN economic forecast indicated that the state's deficit would have been over $6 billion in FY2010/2011 without the federal stimulus funds and that the deficit is projected to be over $5 billion in FY2012/2013. The federal stimulus funds are likely to provide one-time funds that would assist with the reductions the next two years. However, colleges and universities will need to plan appropriately so that they are prepared for FY2012 when the federal funds are gone and the state will not likely be increasing base state appropriation for the likely permanent ten-plus percent reduction that will occur for FY2010.
The governor's revised budget proposal was announced on March 17, 2009. The Senate and the House of Representatives' leadership have announced their own budget proposals so there will be much discussion over the next several weeks before a final budget is adopted for the state and when what its ultimate impact is on higher education, MnSCU, and BSU.
The three budget scenarios that we are currently modeling include reductions in state appropriations from ten to eleven percent; tuition increases from four to five percent; and personnel cost increases that are one and half percent or less. Tuition parameters have not been officially defined by the Board of Trustees. In all scenarios some institutional cost projections have been reduced — natural gas utilities by $140,000 and debt service payments by $100,000.
Administration's goal is to stay on the timeline proposed in early February with some modifications based on when certain information is received. Planning will take into account a four-year horizon (FY2010-FY2013). It is likely another campus-wide budget forum will occur in the first few days of April.
Bemidji State University leadership is asking the campus community to share ideas on ways in which the University could increase revenue, decrease expenditures, or accomplish both as we continue to monitor and address the state's projected economic shortfalls for this year and the next biennium.
As we plan for a current unallotment and, quite likely, additional financial reductions within the next budget cycle, your suggestions will be an important resource in helping to identify innovative solutions to our economic challenges.
Final legislative and system action is not expected until late spring or early summer. In the meantime, we will post additional information to this site to keep you informed as possible about the external developments impacting our future.
Working together, we will address our challenges creatively and arrive at solutions that continue to strengthen Bemidji State for generations to come.
Have a suggestion to address the current economic challenges facing Bemidji State? Please share it.