State increases spark question

State increases spark question

State increases spark question

After working to secure additional funding for Missouri Southern for several years, Sen. Gary Nodler (R-Joplin) wonders where that money has gone.

“Over the last five years the additional budget adjustments beyond the normal growth that every other school in the state received totals about $14 million that we’ve gotten Missouri Southern.” Nodler said. “So it is a bit alarming that the cash reserves have declined over the 5-year period, that was money they didn’t know they were going to get.

“That’s a little bit hard to explain.”

Despite the questions, Southern is poised to receive the highest increase in state funding of any school next year to make up for what some call a historical underfunding of the University.

The increase could total as much as $2.6 million if the Missouri Department of Higher Education recommendations are approved by the governor in early 2009.

Southern received $25,597,158 for the current fiscal year 2009, and $23,436,308 in 2008.

“There’s two things at work here,” Nodler said. “No. 1, the funding increase that Missouri Southern has gotten have been the highest percentage in the stage for two years, and there’s also been some contraction in enrollment, so in terms of per capita funding obviously Missouri Southern’s per capita funding is improving pretty dramatically.”

Southern received $21,346,501 in 2002, but the economic downturn after Sept. 11, 2001, led to drastic cuts to higher education in Missouri, reducing the University’s state appropriations to $19,211,851 in 2003. The state has since instituted a three-year plan in an attempt to restore funding for Missouri institutions to their previous high-water marks. Fiscal year 2009 is the second year of the plan.

“The issue with 2001 and 2002 is that the economy went in the tank and state revenues went down,” said Paul Wagner, deputy commissioner for the Missouri Department of Higher Education. “A lot of that had to do with 9/11 and the economic turmoil back then so the state had less money coming in and they had to cut somewhere. Higher Ed took the brunt of those cuts.

“It’s been a long slog of trying to replace that money,” he added. “It was all cut in one fell swoop and it’s just been a process of building those budgets back up.”

The Board recommended to the governor and General Assembly a $1.9 million increase for Southern for fiscal year 2010, as well as an additional 3-percent increase for every school in the state, which totals about $750,000 for Southern, according to Wagner. That puts Southern’s proposed increase at 7.3 percent, while most of the other institutions will receive a 4.4 percent increase.

Still, some believe Southern’s state funding is still lacking.

“Per student funding is still lower than most of the other institutions,” Wagner said. “There are different ways of looking at that besides just a straight up dollars-per-student amount. The University of Missouri, they have a medical school and an engineering program that are obviously very expensive programs, so there are ways to look at funding and what’s an appropriate level besides just a straight per student amount.

“I would say Southern’s per student funding without looking at some of those contextual factors like the cost of programs is still probably a little bit low and should probably come up.”

TodayStatewide budget shortfall cut into Southern’s gains

Despite support for the three-year plan, another round of budget problems in Jefferson City could stall the final year. Sen. Gary Nodler (R-Joplin) said state revenue is down about 1 percent from a year ago, and the state had predicted a 4 percent increase.

“There is a budget shortfall in the making, despite the fact that we built into the budget and expected a surplus fund balance,” Nodler said. “It isn’t large enough to absorb that kind of a contraction so the general assembly is going to have to look at the entire budget to see where we can shave off some of the cost.”

Allen Icet (R-Wildwood), chairman of the House Budget Committee, still holds out hope that revenue will increase.

“Through the end of the first quarter we are seeing slightly negative growth from year to year and historically the first quarter is never our best quarter,” Icet said. “I’m hoping over the next quarter that things start to become more positive, but the bottom line is we have to have a balanced budget for the 2010 budget and it is premised on the level of growth we have. If there is no increase in revenue whatsoever than when we put the budget together the option would simply be to freeze everything with no increases and no decreases until the revenue picture improves.”

A better picture of the budget situation will emerge in December or January, and everything will be made final by the time the governor gives his “state of the state” address in January. In the meantime, Icet and others are looking at other options.

“If there is no increase at all in general revenue we’d hold all budgets flat,” he said, “and the other thing we could do, instead of making it a three-year phase-in we could stretch it out and make it a four-year or five-year.”

TomorrowEnrollment needs to grow to keep budget growing

For Southern to continue climbing up the appropriations ladder, Nodler sees two key areas the University needs to improve.

“For Missouri Southern to be healthy the enrollment needs to begin to expand, and the financial house needs to be put in order,” Nodler said.

HistoryPlan to average state student funding has placed money in the lion’s corner

Nodler said that in the process of restoring budgets to their historically highest points, he, along with the Department of Higher Education, also wanted to “remediate some inequities in funding that have occurred historically.”

One instance involved the University of Missouri – St. Louis, and additional money was pumped into the University of Missouri system to take care of the funding issue. The other main instance involved Southern and Missouri Western State University in St. Joseph, which Nodler said have both been underfunded since becoming four-year schools.

“The funding for those two schools funded their freshmen and sophomore students at community college levels, creating a long-term inequity,” Nodler said.

A plan was put together that took the average per student funding level for all state institutions, and the principle that no school would be funded at below the average was established. That has generated the additional funding levels for Southern and Western.

Paul Wagner, deputy commissioner for the Missouri Department of Higher Education, agreed the funding problem has been ongoing.

“Different people have different interpretations of why that is,” Wagner said. “One of the reasons is when Southern transitioned from being a junior college to a four-year college there was kind of a year lag on the funding that was supposed to make that happen. In some respects it’s a historical under funding that goes back to the late 1960s and the transition from a two-year school to a four-year school.”

Another factor in Southern’s lack of funding, especially on a per student basis, is due to the ways the state has historically decided how much money to allocate each school.

“For a good chunk of time, up until the early 1990s, the state funded institutions kind of on a per student basis,” Wagner said. “Southern was still a smaller school enrollment-wise compared to many of the other ones, like Missouri State for example grew very rapidly during that time, so their funding would have increased more as their enrollment grew.”

Wagner said in the mid to late 1990s the state moved away from funding just based on enrollment, and as a result schools were locked into positions and funding levels relative to one another. The state also tried to deal with the historic underfunding of Southern in the 1990s with the creation of the international mission on campus, but Nodler said the mission concept has failed to deal with the lack of funding.

“That turned out to be a loser financially,” Nodler said, “because originally the international mission was a device that the Coordinating Board had created with this whole concept of mission enhancement. In fact (former MSSU President) Julio León was one of the architects of mission enhancement to get our funding.

“That was the device they were going to attempt to use to deal with this historic underfunding, but what happened unfortunately is when the Higher Ed budget got to the legislature, the legislature saw the mission enhancement funds for Missouri Southern and they then decided they would do mission enhancement for all the other schools. As a consequence, Missouri Southern and Western’s shares actually went down.”

The mission still created extra dollars for Southern, but the money they received was a lower percentage than originally planned before mission enhancement was adopted for the other institutions.

The percentage increases in Southern’s appropriations have helped make up for the last 40 years, but Nodler stressed that it is still a work in progress.

“It hasn’t completely eliminated their historic underfunding,” he said. “Yes, Missouri Southern is doing better in acquiring funds today, however, if you look back over 35 to 40 years of underfunding then the institution’s funding base is lower because it’s at a lower funding share for a generation.

“It takes a long time to repair the damage that’s done by long term underfunding. Two or three years of equity adjustments that give the institution a higher percentage than other schools is helpful.”