Mid-year budget review with
University Planning Committee

Jan. 31, 2005-On the campus of Arkansas State University in Jonesboro, ASU President Dr. Les Wyatt met today with the University Planning Committee (UPC) for a mid-year fiscal budget review and current legislative update. (The UPC is an advisory group of faculty, staff and administration as well as students.)

The Arkansas Legislature will consider a new “needs-based” funding formula for higher education, as endorsed by Gov. Mike Huckabee.  Huckabee has stated that his priorities for the Arkansas 85^th General Assembly are highways, higher education and health care. In his Legislative Agenda given on Jan. 11, he placed emphasis on increasing the number of Arkansans who hold bachelor’s degrees.

To assist in this process, university presidents from around the state of Arkansas have worked together during the last year to develop the needs-based formula. The needs-based funding formula has overwhelming support from the presidents of two- and four-year campuses, and the non-teaching entities of higher education.

The premise of the funding formula is to move away from funding higher education on a per student basis to one based on the actual cost of providing the instruction. 

Funding solely on a “per student” basis doesn’t allow for cost differentials among certain classes. For example, one class might require a laboratory with thousands of dollars of specialized equipment, while another class has need for only basic classroom equipment. In addition, the current formula doesn’t allow for salary differences between faculty members who teach freshmen and sophomore level courses versus those who teach upper level or more advanced courses of study.

The Department of Higher Education developed the “needs formula” from benchmarking and comparison studies with 122 other institutions of higher education around the United States.

If ASU were to receive funding based on the “needs” formula, it would translate into additional $11 million.  

ASU also is dealing with state mandates through the Arkansas Department of Higher Education. The ADHE receives such direction from the legislature and various state agencies based on the needs of the people of the state of Arkansas.  Among those needs are: more teachers in K-12, especially in rural areas; more nurses and other health-related professions, and more diversity among the faculty, staff and students.

Nursing, health professions, and teacher education majors comprise more than half of the graduating class at ASU commencement ceremonies. In addition, ASU graduates more nurses than any other public four-year institution in Arkansas. Nearly 1,800 students were enrolled in the College of Nursing and Health Professions in the fall of 2004. And, last fall more than 2,000 students were enrolled in the College of Education. Additionally, ASU graduates more teachers than any other institution in the state. Within the last two years, ASU created an Office of Diversity Initiatives with a goal of creating a more diverse faculty and staff as well as implementing new programs and scholarships for minorities.

Other goals for ASU include: increasing student scholarships; intensive marketing, promotion and communication to increase the university’s image and student recruiting; increasing student retention rates; and additional computer technology.

In addition to the legislative issues, Dr. Wyatt gave a mid-year review of the budget year which began July 1, 2004, and ends June 30, 2005. In the fall, ASU announced a “belt tightening” that includes filling only essential positions and trimming the travel and supplies budgets across all departments.

Although the initial steps have been beneficial in reducing expenses thus far, additional steps are being considered for the remainder of the fiscal year. To meet an anticipated $2.7 million budget shortfall by the end of the fiscal year, a hiring freeze will go into effect immediately. To insure that students will not be adversely affected, exceptions will be made for teaching faculty and essential vacant positions.

 Within the university’s $100 million operating budget, $2.7 million should be manageable, Wyatt said. If reductions from travel, supplies and the hiring freeze do not make up the shortage, the money will be taken from reserves.

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