Eastern Michigan University trying to rein in $3M budget shortfall
Eastern Michigan University's budget shortfall has shrunk to $3 million, giving the school hope that it can complete the academic year in the black.
Chief Financial Officer John Lumm sifts through papers during an Eastern Michigan University Board of Regents meeting at Welch Hall in Ypsilanti on Tuesday, Feb. 21.
Chris Asadian | AnnArbor.com
Their fears were quickly validated. By November the shortfall had skyrocketed to $4.6 million, growing by nearly $3 million in one month.
Since then, however, EMU has gradually adjusted operations and limited spending in an effort to avoid red ink at the end of the year.
"We are in significantly better position than we were," the school's Chief Financial Officer John Lumm told the Board of Regents Tuesday.
Lumm said EMU could rein in costs and stay within the $283.1 million budget it set for 2011-2012. How? By cutting back on utility and supply costs, not filling several open positions and deferring planned expenditures, he offered.
But finding fat to trim might prove difficult. EMU this year already saved $4.2 million in salaries by cutting 81 positions.
Enrollment declined 0.7 percent this year instead of increasing like EMU predicted, leading to a multimillion-dollar gap.
Additionally, EMU investments performed poorly at the start of the year. In September the school had lost $1.9 million in investment revenue. Earnings have since rebounded and the school is now $1.8 million in the black.
Money from research contracts and grants has decreased by $2.3 million from this time last year. The school has garnered $6.1 in research money and Lumm says the dip in funding is largely due to federal cutbacks.
Regent Mike Morris said the school's investment troubles and dwindling research funding needs to change.
"Just because it's tough to get (research awards) doesn’t necessarily mean we can't pursue them," he said. "We need to do more. We need to pick up the pace and we need to help people get these grant applications well-written and submitted."
The regents were informed of one silver lining. Fundraising is on pace to reach $9.5 million by the end of the year, nearly doubling the amount of money raised in 2010-2011.
Kellie Woodhouse covers higher education for AnnArbor.com. Reach her at kelliewoodhouse@annarbor.com or 734-623-4602 and follow her on twitter.
Comments
Steve McKeen
Wed, Feb 22, 2012 : 1:18 p.m.
EMU should start an income tax like the city of Ypsilanti.
Silly Sally
Wed, Feb 22, 2012 : 11:58 a.m.
The school needs to cut out silly spending. I can think of two examples: 1) The lawsuit against the grad student over religion (She did not want to treat a gay man and referred him) 2) They recently spent a lot of money to move walkways around a parking lot, wasted money. When it was all over, Not much improvement for the money spent. They should have spent the money fixing other parking lots that have potholes 3) Due to poor maintenance, the library had a pipe fall on a fire sprinkler pipe and a lot of water damage happened. Over $100,000 or much more is now gone 4) The presidents house 5) the dead girl Emily Dickerson costs... It all adds up
greg, too
Thu, Feb 23, 2012 : 6:07 a.m.
From what I have been told, it was student vandalism, not poor maintenance. That place would be so much better without the students (sarcasm, mostly). And I agree about the massive budget for benches and hills that came out of nowhere. The school is not going to repair it's image that was tarnished by the murder scandal through benches and illogical signage.
catfishrisin
Wed, Feb 22, 2012 : 1:27 p.m.
6) Football
Geoff Larcom
Wed, Feb 22, 2012 : 3:27 a.m.
The headline on this story also merits comment. Normally, you "rein in" something that is in danger of going out of control such as large-scale spending or a person's problematic behavior. Yet this piece notes the positive and effective steps EMU has already taken to reduce the shortfall, along with the indication that the shortfall will ultimately be eliminated with further cost-cutting steps.
Meg
Wed, Feb 22, 2012 : 2:57 a.m.
To state that EMUs graduation rate is low is very misleading. Its students are mostly part-time and many are working almost full-time to pay for their education. Its retention rate is actually a respectable 70 plus percent. The university fulfills an essential role in this region, and it is a shame that the state legislature doesn't recognize this.
Million Dollar Bill
Wed, Feb 22, 2012 : 5:24 a.m.
Meg -- why do you think the state legislature doesn't recognize this? "Perception is reality," after all.
Geoff Larcom
Wed, Feb 22, 2012 : 2:41 a.m.
An essential variable to note in understanding this story is that, for the past three years, EMU has led the state of Michigan's public universities - by far - in tuition restraint, including last year's 0-0-0 effort that held tuition at previous year levels. Eastern's overall increase in tuition has averaged just 2.5 percent over the last three years, the lowest increase in the state, and students are paying only $20 more per credit hour than 3 years ago. Holding down your revenue from tuition contributes greatly to any budget challenge, but is aimed at helping our students and their families afford college. That is a very important measure to take in this Michigan economy, and one that any discussion of a temporary, midyear budget shortfall should include. Note: Geoff Larcom, who worked as an editor and reporter for The Ann Arbor News for 25 years, is now executive director of media relations at Eastern Michigan University. His beats included covering academics and administration at the University of Michigan and at Eastern Michigan University.
catfishrisin
Wed, Feb 22, 2012 : 1:25 p.m.
Greg, That would require a backbone, something the President and Regents don't have. The elephant in the room (athletics) is not on the table for discussion. Meanwhile, services that gradually eat away at the mission of the university continue to be trimmed.
greg, too
Wed, Feb 22, 2012 : 3:45 a.m.
It's time for the athletic teams to sink or swim. I would imagine the school would be either in the black or close without those albatrosses weighing down on the budget with little or no return. EMU is a school that is based in training teachers, not trying to win MAC championships...which it cannot seem to do anyway. EMU will never be Umich or even Toledo, so stop trying and just focus on education. Education First is the brand, is it not?
moveon2011
Wed, Feb 22, 2012 : 2:36 a.m.
cut it bee that the news of only a 12.4 graduation rate .
rob
Wed, Feb 22, 2012 : 12:33 a.m.
That would be "rein", not "reign," unless we're appointing kings to run universities these days.
Stupid Hick
Wed, Feb 22, 2012 : 1:34 a.m.
Who reigns in the annarbor.com news room? If only an editor would take the reins.