Eastern Michigan University dipped into reserves by $2M last year
Eastern Michigan University dipped into its reserves by $2 million last year to cover a shortfall in enrollment and investment income.
The Ypsilanti school originally projected the shortfall to reach $5.6 million, but administrators and colleges trimmed costs —using attrition, reining in travel and supply expenses, and cutting certain initiatives— by $3.6 million, closing the gap but not eliminating it.
Eastern Michigan University's campus.
File photo
“I know you and the president will be looking at other means in trying to balance the budget more aggressively in the coming years so we can end without retractions to our reserves, but additions,” Morris told John Lumm, EMU’s chief financial officer.
EMU roughly has $40 million in reserves, which mostly are comprised of surpluses from tuition revenue and state appropriations from previous years and investment income on the surpluses.
Prior to last year, EMU experienced small year-end surpluses ranging from $400,000 in fiscal 2011-12 to $1.6 million in fiscal 2009-10.
Overall, last year’s $2 million shortfall encompassed 0.7 percent of the school’s $283.3 million fiscal 2012-13 budget.
EMU set a $290.6 million budget this year. Enrollment has significantly increased from last year, further solidifying projected revenue for the coming year.
Undergraduate credit-hour enrollment stands at 246,059 hours, as opposed to 241,411 last year.
EMU also experienced a decrease in research grants last year. The total number of research-related contracts and grants shrunk by more than $2 million, sliding to $10.4 million.
The decrease is in large part due to a cutback in federal research spending, Lumm said.
“We just have to get better at getting a bigger piece of the shrinking pie,” said regent Francine Parker.
This year the school added $150,000 to its research budget in an effort to increase support staff who assist professors applying for grants.
EMU plans to receive between $10.8 million to $11.3 million in research contracts this year.
Meanwhile fundraising levels saw an uptick last year, hitting $11.5 million, up from $5.1 million this year. Fundraising goals for the current year are set at $8.5 million.
Kellie Woodhouse covers higher education for AnnArbor.com. Reach her at kelliewoodhouse@annarbor.com or 734-623-4602 and follow her on twitter.
Comments
Geoff Larcom
Wed, Sep 19, 2012 : 3:14 p.m.
To AnnArbor.com readers: Another important element of this budget equation is how much attention Eastern has paid to the needs of students and their families over the past four years. EMU has been a nationwide leader in holding down costs for students and their families. That, of course, means less revenue, and the possible need to dip into reserves. Over the past four years, Eastern's average increase of 2.86 percent in tuition and mandatory fees has been the lowest – by far – among Michigan's 15 public universities. EMU students pay only $32 more per credit hour than four years ago. This story also alludes to some great enrollment news that was formally announced Tuesday. Eastern has the largest incoming class of new undergraduates in its 163-year history with 5,076 students. The total, which includes first-time freshmen, transfer students, students pursuing a second degree, and other types of new undergraduate students, represents an increase of 6 percent from the previous Eastern record of 4,751 in 2001. The entering freshman class is the largest in a decade with an enrollment of 2,595, compared to 2,130 at the start of last fall, an increase of 21 percent. The large increase in freshmen occurred despite a decline in Michigan's population from 10,050,847 in 2007 to 9,876,187. The incoming freshman class is better prepared to succeed in college and is more diverse as well. Final figures indicate that 725 freshmen had a high school GPA of 3.50 or higher, compared to 532 last fall, an increase of 36 percent. In addition, 877 freshmen earned a high school GPA of 3.0 to 3.49, compared to 663 last year, a 32 percent increase. For further details, see the link at http://www.emich.edu/univcomm/releases/release.php?id=1347993484 Note: Geoff Larcom, a reporter and editor for The Ann Arbor News for 25 years, is now executive director for media relations at Eastern Michigan University.
genetracy
Wed, Sep 19, 2012 : 1:54 p.m.
Just think how much the university would save if they dropped and football and men's basketball.
xmo
Tue, Sep 18, 2012 : 11:15 p.m.
Why not give Professors and admin staff another rise? With bigger pay checks, they pay more tax, which will allow the state and Federal Governments to get more tax dollars so then it can give more back to EMU? Sounds like a good Union Slogan for those "Working Families" of EMU.
greg, too
Wed, Sep 19, 2012 : 3:01 a.m.
xmo, you're silly. People who make bank like profs, because you know that all of those profs make millions a year, drive shiny gold Caddies into work every day (when they dont take the helicopter of course), and use one hundred dollar bills as book marks, don't pay taxes. Sheesh. In reality, the school is hemorrhaging money because it is trying to keep various D3 mens programs (football and basketball in particular) in D1 through throwing millions at them, trying to erase the stigma of horrible press over the years by building hills (yes, the build hills there) and other beautification projets to make it seem more inviting (it usually just makes it harder to get around), and over paying their administrators who like the red red wine while not bringing in alumni dollars.
Bonding
Tue, Sep 18, 2012 : 9:58 p.m.
I see a pattern. How long until an "Emergency Financial Manager" is in place? Eastern Michigan University will save $3 million from the layoff of 38 employees and $2.4 million by not filling about 30 vacant positions. Wed, Jun 29, 2011 The university laid off 38 employees last week, including 28 unionized workers and 10 from administrative positions as a result of the budget approved by the Board of Regents June 21, said Walter Kraft, vice president of communications. http://www.annarbor.com/news/ypsilanti/eastern-michigan-university-will-save-54-million-from-layoffs-attrition/#.UFjtRI4nj8s
HB11
Wed, Sep 19, 2012 : 1:22 p.m.
Really? An EFM? They filled the budget shortfall with their own money and have a plan in place to trim the budget currently. Contrary to what the AA elitists believe, EMU is not Detroit, Pontiac, or Benton Harbor, all of which have some type of EFM in place.