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Colleagues:
Throughout the fall semester, I have talked openly with you about the budget shortfall that we have for the current fiscal year. Based on our declining enrollment in our traditional on-campus student population, we estimate that we will be about $4 million short in our operating budget for FY18. This is only an estimate because we will only know the final shortfall after we see how many students enroll for the spring 2018 semester.
A key factor in the current budget situation is student-generated funds. While the total number of all students enrolled at A-State has been increasing over the past few years, the number of traditional on-campus students has been declining. Our enrollment increases have been limited to our Academic Partnerships online program. Unfortunately for us, in fall 2017, we welcomed one of the smallest freshman classes in recent years, and fewer students returned to A-State (e.g., only 73 percent of the fall 2016 freshman class returned for their sophomore year). While tuition and fees compose the bulk of student-generated funds, the enrollment levels of our traditional on-campus students also affects auxiliary areas ranging from student housing, meal plans, on-campus bookstore, and convenience store sales. This is just one reason that efforts to increase our student enrollment and retention are so vital.
To prepare for this budget shortfall, I asked each division of the university to identify areas in operating, supplies, travel or other non-personnel areas that could be identified to address the shortfall. We are setting that money aside for now while we still have it, rather than making more drastic moves in the late spring. Each division’s budget was reduced according to their relative size in the overall E&G budget.
- Academic Affairs: $340,000
- Finance and Administration: $103,150
- Student Affairs: $36,300
- University Advancement: $16,600
- Chancellor’s Office: $3,950
Athletics and Auxiliary Programs will be providing an additional $1.8 million to help cover the deficit. Facilities Management has identified $1 million in previously-budgeted capital projects that can be covered by a zero-interest loan, which will be paid out over the next few years. Finally, we have implemented a soft hiring freeze, which allows us to only replace essential personnel who leave the university.
The almost $4 million budget reallocation is based on the past trends in student retention and on-campus enrollment from the fall to spring semester. If fewer students enroll in spring 2018 than in previous spring semesters, we will be required to make additional reallocations. If spring 2018 enrollment improves, however, funds will be returned to the respective areas in proportion to their contribution. Thus, we are closely monitoring spring 2018 enrollment for all A-State students.
Friends, I wish that I only had good news to share all of the time (and there are many great things happening at A-State right now). But I believe it is also important that you also hear directly from me about the real challenges that we are facing. We are currently in a difficult situation, but the good news is that we are in it together. I am encouraged by the many efforts being made across campus to cut costs while continuing to focus on our mission. I am grateful that our recruitment and retention efforts are beginning to bear fruit. Year-to-date, for example, we currently have more applications and admissions for next year’s freshman class than we have ever had at Arkansas State University. Also, we are currently six percent ahead of last year’s pace for freshman returning for their spring semester.
These recent trends are really encouraging, but we need to keep up those efforts. A-State is increasingly dependent upon student-generated funds, and without increased enrollment and retention, we will not be able to do the things that we want desperately to do (e.g., increasing staff and faculty salaries, expanding academic programs, increasing graduate student stipends, and the like).
Thank you for what you do for our students and Arkansas State University. I remain convinced that Arkansas State is primed for greatness. I see so many wonderful things happening as I walk around our campus. As I said earlier this year, if you want to go fast, go alone. If you want to go far, go with others. Let’s keep moving forward. Together.
Best,
Kelly
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