Story by Elizabeth Erwin, News Editor
In light of an expected $4.5 million shortfall, the Board of Regents Finance Committee met on Nov. 12 to discuss budget solutions going forward.
“We talked to the Board about this amount, it’s not surprising, it’s something we’ve been estimating pretty much all fall semester,” Vice President of Finance and Administrative Services, Jackie Dudley said. “I want to be clear that you know we have spring is still yet to follow, and then we’ve got summer school so a lot can happen with that number for the better or worse or not. But that’s where we think we’ll be.”
Interim President Bob Jackson said several factors have caused a strain on the University budget including enrollment pressures, appropriation changes, performance funding, deferred maintenance and state pensions.
To offset the shortfall, Dudley proposed several solutions to the committee including utilizing a $2 million budget contingency. The contingency was built into the University budget in 2016 to be used in shortfall situations.
Another $2.5 million is available from remaining balances in departmental accounts from the end of fiscal year 2018. These accounts include appropriated funding that had been set aside for departments to use but went unused for various reasons.
Dudley said the departmental account balances wouldn’t be something to rely on in the years to come.
“It is one time… I don’t want the perception to be that the $2.5 million is something we can use going forward,” Dudley said.
To further subdue the shortfall, a “hiring chill” has been put in place by the University president. Dudley said the chill serves to add an additional level of review to the hiring process based on the strategic need of the vacant position.
In addition to the chill, Dudley said the office of Finance and Administrative Services had chosen to not apply new hires for payroll until after the holiday break.
The committee also unanimously passed changes regarding sick leave credit to retirement plans.
Murray State currently utilizes three retirement plan options: Kentucky Employees’ Retirement System, Teacher’s Retirement System and an Optional Retirement Program that is managed internally.
KERS has a statutory requirement of six months sick time buyback upon retirement, whereas TRS and ORP are optional by the institution.
When compared to the sick time buyback policies of other institutions across the state, Jackson said Murray State is an outlier.
“We’re the outlier,” Jackson said. “We do it both in the optional retirement plan, for up to six months, we do it in the teacher retirement system plan for up to six months, and obviously statutorily we do it in the KERS plan for staff.”
Dudley said the proposed changes would amount to approximately $150,000 savings for departments.
The committee also passed a one-time exception to the holiday compensation for regular employees policy.
The current policy requires employees who retire or resign to come back for at least one day after the holiday break in order to receive their holiday compensation. The exception wouldn’t require these employees to return to the University in the new year.
The committee then moved on to look at the budget for fiscal year 2020. The current proposal for 2020 is to budget flat wherein the University would design the budget at the current enrollment levels with the assumption the University will be continually faced with a $4.5 million budget shortfall. By budgeting flat, the University would then be in a safe position to not have a shortfall in the years to come.
The committee also discussed increasing funding for deferred maintenance in 2020.
After passing the Finance Committee, the proposed changes and guidelines will be voted on by the full Board of Regents during their quarterly meeting on Dec. 7 before being implemented.
