MSU gets $2.5M windfall, but braces for hard times

published on Tuesday, November 3, 2009 11:51 PM MST

By GAIL SCHONTZLER Chronicle Staff Writer

Montana State University will enjoy a $2.5 million windfall this year, thanks to a surge in student enrollment, but university leaders are bracing for much tougher times ahead.

The possibility of employee furloughs and benefit cuts in future years was debated Tuesday by MSU’s budget committee.

The group voted unanimously for a plan to divide up this year’s tuition windfall of $2.5 million, the result of the national recession prompting 450 more students than expected to enroll at the Bozeman campus.

About $1 million will go toward educating students, $400,000 will be set aside in a reserve fund as a cushion against unexpected expenses, and $700,000 will be earmarked for new “investments.”

Ideas for using the $700,000 will be solicited from people on the Bozeman campus. Possibilities could include spending to boost recruitment of high school students, doing more to keep MSU students from dropping out, or taking other steps that may generate or save money.

Because there’s no way to know whether this fall’s enrollment surge is a fluke or permanent, MSU is being conservative and treating the $2.5 million as one-time money, said Jim Rimpau, vice president for planning.

That means MSU won’t automatically put money back into the same programs hurt over the summer, when the fall outlook was bleak and budget cuts of $1 million were ordered. Those cuts are being treated as permanent.

Rimpau chairs the 25-member University Planning, Budget & Analysis committee, which met Tuesday in the Bobcat Stadium. Made up of deans, vice presidents and representatives of students, faculty and employee groups, UPBAC advises President Geoff Gamble.

Joe Fedock, interim provost in charge of academic issues, argued that in 2011, when MSU expects another $2.5 million windfall, more money should go into educating the surge of students. As it is now, Fedock argued, MSU’s only planning to put an additional $25 per student credit hour toward those expenses.

While the recession helped MSU this fall by sending hundreds more students into its classrooms, university officials are concerned that two years from now, MSU will feel the recession’s bite.

The $17.6 million in federal stimulus money that prevented deep budget cuts in the Montana University System will be gone in two years. Fewer students will be graduating from Montana high schools and coming to MSU then. And in two years, the national recession could be hitting the state treasury hard.

In the first quarter of 2009, the state expected a $7 million revenue loss. Instead it lost $75 million, said Craig Roloff, vice president for finance. And though there are signs the recession may be ending nationally, Montana tends to lag behind, Roloff said.

The budget committee didn’t vote Tuesday, but agreed informally to recommend that the Montana Board of Regents be prepared to act quickly and take drastic steps if necessary -- including furloughing employees, sending people home without pay on a temporary basis -- if the state faces a severe financial crisis in 2011 and 2012.

Committee members also debated but reached no consensus on whether to recommend the regents seek a change in state law to raise the number of hours part-time employees must work to qualify for health insurance from 20 to 30 hours a week. That could affect many adjunct instructors and classified employees.

“You’re asking employees to balance the budget on their backs,” protested Kevin Thane, a Staff Senate representative.

“That’s what the entire budget is, is paying employees,” Roloff said. Health costs are a big deal and getting bigger, he added, saying it originally cost MSU $100 to cover part-time employees, but now it’s more like $900.

“We’re dealing with some really tough issues,” Roloff said after the meeting. “We’re working through it as a group. I see that as pretty darn positive.”

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