Budget frequently asked questions
If you have a question that isn’t answered here or a suggestion, please submit your comments to be addressed in future updates.
- How did university administration decide to cut each college, school and division 12 percent? Why are these cuts being applied across the board?
- The Missouri Auditor released a concerning report around executive compensation earlier this year. What changes have been made since then in light of current budget constraints?
- Are current administrative positions being reduced?
- What are we doing to address the growing costs associated with renovating buildings? Are all of our buildings necessary, and wouldn’t it be less expensive to tear some down and rebuild?
- Can Athletics financially contribute to the educational mission of the university?
- Why are we paying for faculty who don’t spend much time in the classroom and aren’t productive researching?
- Why are we still paying the salaries of past administrators like R. Bowen Loftin and Gary Pinkel?
- Why is it important we continue to fund our diversity programs?
- Can we adopt an “80-and-out” policy as an early retirement incentive?
- How about adopting a hiring freeze?
- Can we rent out our sports arenas to raise revenue?
How did university administration decide to cut each college, school and division 12 percent? Why are these cuts being applied across the board?
At this point every fiscal year, we are responsible for setting a budget based on anticipated revenues, known expenditures, and strategic investments. The budget is built, on the revenue side, around anticipated tuition received, state funding appropriated and additional income. For FY18 we have determined that our ability to allocate general revenue will be down around 12 percent. Therefore, because nearly all general revenue is passed along from central administration to the units, each was cut 12%.
However, there was a clear expectation set by President Choi and Interim Chancellor Stokes that leaders would make strategic cuts within each of their units to determine how best to handle their reduced revenue. Within units the approach is expected to be strategic and involve metrics and data, communication with stakeholders, and tremendous consideration of how to ensure excellence while addressing the declining revenue. To that end, the cut was anything but “across the board.” Rather, it is happening at the appropriate level, where knowledgeable decision makers can determine what is best for their units with the entire university in mind.
The Missouri Auditor released a concerning report around executive compensation earlier this year. What changes have been made since then in light of current budget constraints?
The audit focused on one area of the UM System’s vast, $3.2 billion enterprise, which means overall we are following sound business practices and accounting standards as a whole. In an effort to improve, we have engaged in a broader discussion around the need for increased rigor and transparency at the university. As such, President Choi previously announced that the UM System has terminated its executive performance incentive program as a part of his commitment to transparency in our operations and responsible stewardship of our public resources. Additionally, President Choi has commissioned a complete review of all compensation policies in the UM System to ensure they meet industry standards.
Are current administrative positions being reduced?
Unfortunately, because more than 75% of our expenses are the salaries and benefits of our people, everyone feels the budget constraints that necessitate the elimination of positions. Many administrative positions have been reduced over the last couple years. The chancellor’s office has been reduced from a staff of seven full-time people to four, including the chancellor. The Provost’s office has eliminated two part-time administrators, cut another full-time office position, and replaced two senior associate provosts with three faculty fellows, increasing the faculty presence in the provost’s office and saving money in the process. Between Human Resources, Operations, Finance, and Marketing & Communications, more than 65 positions have been eliminated, including 25 administrative positions in Operations and a reduction of supervisory roles in Finance. And there may be additional cuts in some of these areas. The pain is all too real and is being felt everywhere.
What are we doing to address the growing costs associated with renovating buildings? Are all of our buildings necessary, and wouldn’t it be less expensive to tear some down and rebuild?
Mizzou’s campus includes about 6.9 million gross square feet of buildings classified as Education & General (E&G) that requires upkeep through the General Operating budget (state appropriations and student tuition). Thirty percent of campus E&G space (43 buildings) are 40 percent or more deficient by an independent auditor and cannot be renovated in an efficient or cost-effective way to support contemporary learning. We cannot begin to address the needs of each of these buildings as our current total deferred E&G facility need is $748 million with an annual growth rate of $35 million.
Because of these budget constraints, we will consider the decommissioning and/or razing of some of these buildings to reduce the amount of deferred maintenance on campus and provide valuable recaptured operations dollars that can be invested in existing and future high-performing buildings on campus. Moving forward, four tenets will be used to determine future facility planning:
- Further the academic mission;
- Improve the quality and efficiency of research space;
- Reduce deferred maintenance to slow the FCNI growth;
- Reduce space requirements for administration, teaching and research activities through the use of technology and rethinking of the traditional space allocation model. Renovation, removal or replacement will be considered across the campus to align programmatic and opportunistic academic strategy to the facility portfolio.
By doing all of this we hope to eliminate 250,000 square feet of campus buildings. This will reduce the load on the power plant, thereby allowing the current capacity to be sufficient farther into the future. A smaller campus footprint also reduces the maintenance and repair budget for University Operations.
Can Athletics financially contribute to the educational mission of the university?
They do. The Athletics Department is a self-supporting auxiliary unit. It does not receive any money that could otherwise go toward teaching, learning or research. Athletics pays the campus for the tuition and fees of their student athletes, somewhere in the neighborhood of $15 million. They cover their own costs and pay overhead back to the campus for the use of the campus infrastructure. Nevertheless, Athletics will be expected to contribute to the budget reductions just as other campus entities are.
Why are we paying for faculty who don’t spend much time in the classroom and aren’t productive researching?
The vast majority of our faculty members are diligent and extremely hard-working. Not only do they “stand and deliver” by teaching our students, but they contribute to the research enterprise, spend countless hours mentoring and advising, travel to present their research, and train students and teachers in their disciplines. And we are extremely proud of their efforts as they contribute to all four of the university’s core values and enable us to fulfill our mission. Recognizing the value of the various career paths of our faculty is crucial to building an environment in which their contributions to the broad institutional mission can be rewarded and celebrated.
With that being said, we have come to realize that faculty workload policies for some departments need to more clearly specify expectations relative to workload assignments and, for that reason, the Provost has been working with Faculty Council, deans, and department chairs to create policies that will make it easier to meet the needs of the departments and match the strengths of their faculty. Across the career path of a faculty member, interests and areas of focus will shift. In such instances, workload assignments should reflect a reallocation of effort to other areas, such as teaching or administrative activity, in which a faculty member may continue to be active and productive. These carefully crafted policies, intended to be in place for this fall, will enable departments and faculty to be proactive in assigning justifiable faculty responsibilities in all schools and colleges and will allow us to continue to provide a world class education for all students.
Why are we still paying the salaries of past administrators like R. Bowen Loftin and Gary Pinkel?
When former chancellor Loftin was hired, the university agreed to specific measures related to his employment, including what would happen should he resign. The university honors its contracts, which included Dr. Loftin serving in a different capacity when he resigned the position of chancellor. Like all faculty, in serving in his current role, he is expected to contribute to the mission of the university while producing accountable results.
Additionally, Coach Pinkel continues to serve Mizzou Athletics, and specifically the football team in a way that is mutually beneficial. Because Mizzou Athletics is a self-sustaining auxiliary unit, the money paid to Mr. Pinkel is not lost revenue for the university’s academic mission.
Why is it important we continue to fund our diversity programs?
A diverse and inclusive campus benefits our entire university community. Students, faculty and staff of diverse backgrounds, races, cultures, and thought bring different ideas and perspectives that expand our knowledge and insight. We will continue to financially support these programs as an area of strategic investment.
Can we adopt an “80-and-out” policy as an early retirement incentive?
A policy of this nature would increase the liabilities in our pension plan, which is currently managed well, but is still recovering from market fluctuation in the last few years. It would not demonstrate strong fiduciary responsibility to enhance the retirement program when the market returns are still lower than historic averages. The decision to retire is a personal one that is influenced by many factors and we know that some employees will be impacted by the upcoming retiree insurance eligibility change. Human Resources offers seminars and one-on-one sessions with retirement specialists to help you decide what’s best for you.
How about adopting a hiring freeze?
For many parts of the campus we are in fact carrying out a hiring freeze. There are, however, numerous reasons that we need to fill some number of positions even in the most difficult of financial times. There are compliance expectations that must be met and our students must receive the support it takes to make good on the expectations they had when they chose Mizzou. For these reasons, and any number of additional reasons, a hard freeze on hiring across the university is not being imposed, but decisions to hire must be approved by the relevant vice chancellor.
Can we rent out our sports arenas to raise revenue?
Yes. Athletics does rent out space in Memorial Stadium, Mizzou Arena, the Hearnes Center, Taylor Stadium and Mizzou Softball Stadium. Costs range from $500 to $5,000 per event. The stadiums are built, managed and maintained by the Athletics Department, which is a self-supporting auxiliary unit that does not receive money from tuition or state appropriations. Money from facility rentals goes to the Athletics budget.