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Implementation of New Budget Model Comes With Boost in State Funding

By Jeff Murphy, April 29, 2016

WARRENSBURG, MO – Expecting to receive a 4 percent increase in state appropriations while also maintaining undergraduate tuition at the current level, the University of Central Missouri Board of Governors on April 28 approved the university’s Fiscal Year 2017 budget totaling $168.3 million.

“This is the net result of UCM’s Strategic Resource Allocation Model (SRAM) that we’ve been developing and successfully implementing this past year. Just looking at components for the budget of $168 million, it represents an increase of over $12.9 million for the fiscal year,” said Ron Core, interim senior vice president of finance and administration, who presented the budget to the board.

Board action regarding the budget followed months of discussion, planning and development of the SRAM. This initiative moves the institution away from its traditional approach to budgeting so that resources are strategically allocated to coincide with academic plans and what is needed to build a sustainable business model. In addition to increasing compensation to faculty and staff to aide in offsetting the rise in basic costs of living, it encourages net revenue generation in support of UCM’s mission while enhancing the collegiate experience offerings and provides incentives for innovation; and ensures the university remains affordable and accessible to Missouri students and their families. Funds distributed by strategic resource allocation come from state appropriations and tuition revenue.

SRAM is designed to help the university weather unexpected changes in revenue, particularly as the institution has faced years of static or declining state funding. Net state appropriations of approximately $57.7 million are projected for FY17. This means the university will receive state support at about the same level as it did in FY2009.

Anticipated expenditures in this balanced budget include board approval of a 2 percent annual increase in compensation or $600, whichever is greater, for full-time university employees. This becomes effective, July 1, 2016. The board also raised the minimum wage floor to $10 per hour for eligible regular and part-time employees, and provided a pay adjustment to $10.50 per hour for 89 current employees whose hourly rate of pay falls between $10.01 to $10.49. Total cost of the compensation increases for salaried employees is about $1.5 million, and funding for the pay adjustment is approximately $150,000, according to Core.

Additional funds will be allocated to cover increases in areas that include the lease on UCM – Lee’s Summit, health insurance increases, faculty promotions, Title IX athletic positions, administrative revisions, Office of Sponsored Programs, and compliance initiatives. Other funds will be available to create a reserve, used for Academic Responsibility Centers (ARC) distribution, and strategic allocation to fund initiatives/needs that were identified through a campus-wide process in recent months to obtain proposals.

The budget adopted by the board was one of three scenarios considered that ranged from 2 to 6 percent in increases in state appropriations. Earlier this year, Missouri Gov. Jay Nixon asked the state’s colleges and universities to hold its tuition at the FY2016 level in exchange for a 6 percent increase in state funding. After moving through the legislative process, where reductions were made by the House and Senate, the Gov. recently signed an appropriations bill that will provide a 4 percent increase. UCM, which has strived to make college accessible and affordable by continuing to keep tuition below the inflation rate will not increase its tuition for undergraduate students. By doing so, the average UCM annual tuition increase over seven years will be 1.4 percent. UCM experienced no increases in tuition for three out of the last six years.

Revenue projections were based on the assumption that total enrollment would be consistent with the 2016 enrollment. The enrollment goal that was built into key performance indicators that are part of the SRAM process is a 2 percent increase, which would provide additional revenue to allow mid-year adjustments.

In talking about the budget, UCM President Charles Ambrose said, “There is a lot of collective enthusiasm. This does what the Strategic Resource Allocation Model was designed to do - to keep a perspective on net productivity, to invest in areas that will sustain growth with quality, invest in student success, and to create sustainability and efficiency measures to do it at the best of our ability.”


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