Missouri Southern, like all state-funded universities in the state, will be hit hard by budget cuts for the 2013 fiscal year.

Up until Tuesday, each of those schools was bracing for a 12.5 percent cut in state appropriations, but that changed when Governor Jay Nixon announced that $40 million would be added back to the state’s higher education budget. Colleges are now looking at a cut near 8 percent.

The money will come out of $140 million allocated to Missouri in a settlement between several state attorneys general and the five largest mortgage lenders in the US.

“This has been a lengthy and extremely complex settlement process, and I commend Attorney General Koster for his dedicated and persistent leadership at every stage of the negotiations,” Nixon said in a statement Tuesday.  “This settlement with America’s largest mortgage banks will help the states and individual consumers continue their economic recovery.”

University presidents and chancellors from across the state traveled to Jefferson City Thursday to meet with the Governor concerning the budget issues for next year.  

Missouri Southern President Bruce Speck was in attendance at that meeting, and he said that while he’s happy to have the relief for next year, the help is only temporary.

“What it means is, just so we’re all clear on this, the $40 million that’s being put in there is one time money,” Speck said. “So you got a structural deficit in the budget, which means that the 12.5 percent is what really the governor thought we were going to have to cut. All he’s doing, and we’re grateful for this, so I don’t want any notion we’re not grateful for it, he’s putting $40 million into a structural deficit, so next year what’s going to happen?”

With the current economic condition, even with the extra money injected into next year’s budget, there will still be a shortfall next year. Universities like Southern will still have to prepare for more cuts and potential tuition hikes again next year.

What amounted to a 25 percent cut in state appropriations over three years now amounts to about 20 percent, still a massive reduction in state funding.

The University will receive just over $1 million more than previously expected, meaning cuts have dropped from $2.7 million to $1.7 million.

To be clear, cuts are still coming to the University, and though the situation may not be as dire as previously expected, students and faculty should be prepared for changes next year.

“We’ve just finished the exercise of people giving us comments about that (possible places to make cuts), and so we have those now and we’re going through trying to figure out what’s feasible,” Speck said. “We will engage the campus in that.”

The comments made on possible cuts will be posted soon for general review by those on campus, including students. Over 14 pages of comments were compiled in the search.

The University has built up some money in reserve funds, but Speck reasons that dipping into reserves to fill gaps in the budget would be unwise.

“When you take money out of your piggy bank to fill a hole, [the hole] will still be there next year,” he said. “We have to think about this long-term … this budget will be a base for the future.”

A final budget proposal will be given to the Board of Governors by their April meeting, along with a concrete plan to amend the budget deficit.