June 30, 2014
President's letter to the university: Budget
Dear Faculty and Staff,
Summer is fully upon us! I'm very thankful for all of the rain, which is important to the agricultural community in Kansas and keeps our campuses looking green and vibrant. I want to especially thank our facilities professionals who work tirelessly to ensure K-State looks great, and who clean everything up quickly after one of our summer thunderstorms. The next time you see one of our facilities professionals working outside on a hot summer day, please stop and thank them for their efforts.
The June Kansas Board of Regents (KBOR) meeting has come and gone, so we now have a pretty firm idea of our overall budget picture for the coming year. In this month's letter, I want to provide everyone with an overall summary of our FY 2014-15 university budget and to briefly look ahead at our likely budget picture for next year.
Budget development
Our K-State 2025 plan provides the focus for all of our budgetary decisions and strategy. As you may remember, we formed a University Budget Advisory Committee last fall to work together to formulate our budget proposal for FY 2015 and subsequent years. Additionally, the Student Government Association Tuition Strategies Committee works collaboratively with the campus community to make recommendations on our tuition and fees increases that are presented to the Kansas Board of Regents. I appreciate the hard work of these students, faculty and staff as they helped develop our budget for the upcoming year, which is laid out in the paragraphs below.
Income
Our income is as follows:
Tuition rate increase and enrollment growth — $9,100,000
Internal reallocation — $3,959,254
State general fund restoration — $3,877,211
Subtotal funding sources — $16,936,465
Our income is largely derived from three sources: tuition and fees; internal reallocation; and restoration of funds cut last year by the Legislature. At the June KBOR meeting, Regents approved our proposal for a 5 percent tuition increase that generates $8.1 million in new funds, and we projected a small increase in overall enrollment that is expected to generate an additional $1 million. Our 1.3 percent internal reallocation recouped $3.9 million, and finally, the Legislature restored some of the funding cuts from last year ($1.4 million and $2.6 million). All together, we expect to have about $16.9 million to meet our budgetary needs.
Expenses
Our expenses are as follows:
Merit salary increases (2 percent) — $8,084,417
University support staff salary increase (2 percent) — $686,159
Targeted faculty salary enhancements — $799,268
Faculty promotions/professorial performance awards — $1,072,419
Backfill 5-year promotions — $385,400
Fringe benefit increase including GHI, KPER and longevity — $44,517
Institutional scholarships — $1,328,000
Utilities infrastructure — $1,000,000
Instructional fees/GTA waiver increase (5 percent) — $512,279
New faculty positions — $598,718
Base funding support for academic unclassified professionals — $242,055
Cover state reduction FY 2015 and human capital services — $1,000,000
Student-centered tuition enhancements — $141,600
Security studies (faculty in history and political science) — $400,000
Pre-award research services support — $63,733
Student services support — $132,900
Alumni database — $85,000
Academic building support — $360,000
Subtotal base budget allocations — $16,936,465
K-State 2025 Theme 5 – Faculty and Staff
Outstanding faculty and staff are key to progress on becoming a Top 50 public research university and meeting the goals outlined in each of our K-State 2025 themes. The vast majority of new monies are going to support faculty and staff salaries, including $8.7 million for a 2 percent merit pool for faculty and professional staff and an "across-the-board" 2 percent increase for university support staff. Additionally, we are investing another $2.3 million to fund 150 targeted faculty salary enhancements, faculty promotions and to backfill faculty promotion increments. Thus, we are investing more than $11 million in faculty and staff salary enhancements. We also are investing nearly $1 million in new faculty lines for future cluster hires and to fund faculty lines to support the security studies program in the departments of history and political science, which were previously funded through a congressional earmark.
We have invested in new staff positions in several key areas of campus, including pre-award research services support ($63,000), student services support ($132,000), academic unclassified professionals ($242,000) and for additional staff support for the K-State Alumni database ($85,000).
Finally, new funds of $250,000 are budgeted for our Human Capital Initiative and $750,000 to backfill last year's state budget cuts.
K-State 2025 Theme 2 – Undergraduate Educational Experience
We are investing in additional scholarship funds to help K-State students who most need assistance ($1.3 million). We also are including two student areas that had been previously funded by the K-State SGA ($141,000).
K-State 2025 Theme 6 – Facilities and Infrastructure
We are continuing to invest in physical infrastructure by allocating $1 million to our utility budget to support upgrades and expansion to our chill plant. K-State also continues to purchase quality available space near the Manhattan campus, and as a result we will repay the purchase of the former Mercy Hospital over a 15-year period using $360,000 from tuition along with $95,000 that was repurposed from renting space in the hospital from institutional support fees funds.
Out years
Many of you may be aware that tax revenues for the State of Kansas have come in significantly under projections during the past several months. I have had several people ask me what impact these projections will have on next year's budget and higher education in general. At this time, it is simply too early to tell. More complete numbers will be available toward the middle of the fall semester, and we will ensure we are planning accordingly.
The University Budget Advisory Committee also will work on developing a more comprehensive construction planning process for new campus buildings and help identify priority areas for future investment. This committee will certainly keep everyone informed as we work together to build budgets that meet future needs with the continued implementation of K-State 2025.
As always, I welcome any questions or concerns you might have. Enjoy the warm weather and have a great July.
Go Cats!
Kirk