Budget Communications

A recent budget assessment under Chancellor Minor’s leadership has allowed us to gain a clearer picture of SIUE’s financial position and budget structure. Over the last five years, declines in revenue and at the same time increases in operational expenses have created a budget deficit.

A multitude of factors, including a general over reliance on tuition, fees and state appropriations, declines in enrollment, scholarship increases which have contributed to net tuition revenue decreases, salary increases, and inflationary cost increases have contributed to the deficit.

Current data indicate a projected deficit of at least $18M for FY 2022-23. The final projections are dependent on factors such as new and continuing enrollment, expenses and additional sources of revenue.

There are a series of common responses to budget structural deficit. Curtailed spending
might include a hiring freeze, spending freeze, academic program prioritization, and reducing expenses by tightening operational space usage during the summer along with other measures.

Given that salaries are the most expensive piece of our operating puzzle, effective immediately the university will employ a new Strategic Position Alignment process (SPA) for all position requests. Criteria for hiring employees for replacement or new positions will include compliance, campus safety, student success and revenue generation. A process for emergency hiring or special circumstances will be provided and considered on a case-by-case basis by Human Resources. We will also revise the Human Resources process used for tracking (new and vacant) positions university wide.

There are also plans for a budget cut and a contingency and efforts to control expenses while making critical investments. This is part of a broader process that will allow us to realign resources with our institutional priorities and strategic plan. 
 

One basic definition of a contingency is a provision for an unforeseen event—"if this, then that.”. In the context of SIUE’s budget, a contingency is an amount of money set aside to cover unexpected costs, or an unexpected loss of revenue, that may occur during the fiscal year. The   origin of the use of budget contingencies at SIUE occurred several decades ago, with a 2% budget contingency for the General Operating Budget. 
 
The purpose of the initial budget contingency was to hold back 2% of the G.O. Budget until it could be confirmed that the two main sources of funding for the G.O. Budget, tuition revenue and state appropriation, would be received as projected during the fiscal year. Therefore, two conditions were evaluated during the early part of the Spring term semester: 1) enrollment for the Spring semester would not be lower than projected and; 2) that the Governor’s annual budget address in mid-February indicated that there would not be a mid-year reduction in state appropriation, known as a rescission. Once it was determined that those two conditions were met, the 2% budget contingency was typically “released” and could be spent during the latter part of the fiscal year. 

In recent years, the budget contingency transitioned from being a true contingency, that could be released later in the fiscal year, to being retained to help reduce a deficit. The 2% budget contingency was maintained until FY20. As the budget deficit grew the amount of the contingency increased to 4% in FY 20, followed by 6% in FY21, and 6.6% in FY22. 

In the spirit of shared governance, the Chancellor’s first discussion about the budget began with a presentation to the University Planning and Budget Council (UPBC) on May 12, 2022. That conversation was followed by a meeting with Constituency Heads on May 17, 2022.

Meetings will be held with the Faculty Senate Executive Committee, Staff Senate, Faculty Senate and Student Government. Provost Denise Cobb is communicating regularly with the academic deans, and our vice chancellors are communicating across their respective divisions.

This Summer and early Fall, the chancellor will host a campus wide presentation on the budget. Campus community members are invited to participate to gain insight and clarity, and to engage in critical assessment and prioritization processes.

As needed, FAQ’s will be added to this listing for further clarity going forward. Please check this site frequently to remain informed. Questions may be submitted to budgetquestions@siue.edu.  

Higher education recruitment has become increasingly competitive over the last several decades. We offer scholarships to remain competitive and attract quality students, and to also remain affordable for students.  Without scholarships and waivers, enrollment would be significantly lower than it is now (less revenue) and some programs would be severely hampered because they wouldn’t be able to attract students. The combined impact would probably have resulted in a reduction in staffing on both the faculty and staff side.  That said, we are working with EAB and utilizing our own data to develop the best scholarship leveraging strategy that we can.   

SIUE’s operational expenses are based upon our culture and decisions. We need to make decisions, based upon the things that we control, to correct the budget and ensure the financial health of the University for the foreseeable future. Since 2018, IBHE has not prepared the cost study that provided comparisons across IL public institutions and benchmarked disciplinary costs.  Even if a new cost study were to be released and suggested SIUE is efficient among our Illinois peers, we would still face the critical problem that our costs exceed our revenues within our general operating budget. 

SIUE has a contract with Academic Partnerships (AOP) for the online MBA and programs in Education, Health, and Human Behavior (EHHB). AOP receives a portion of tuition and fee revenue for students in these programs to support their marketing investments and recruitment/retention infrastructure. These programs have increased online enrollments and have expanded SIUE’s online visibility, which is what they were intended to do. AOP provides significant advertising resources and student contact expertise that we could not afford at the time.  Previously, SIUE had said no to an inquiry from an online enabler because they were only interested in a contract that included online Nursing programs.  Given that we believed we could outpace their projection with a concerted effort, it did not make sense to move forward with their services.  Quite simply, unless the online enabler can produce well more than two times the revenue that we could independently, there is no reason to contract with them.  

To ensure the health and vitality of the SIUE campus, we must focus on what is within our sphere of responsibility. SIUE’s operational expenses are based upon our culture and decisions. 

We must act now, based upon the things that we control, to correct the budget and ensure the financial health of the University for the foreseeable future.  While oversimplified, the reality is that our enrollment is down and increasingly competitive; our instructional costs are up; and inflationary increases are combining to create serious challenges for our campus as we work to pursue our most critical goals of creating access and opportunity through excellent programming. 

The revenue and expense data includes all state-funded classes/credit hours for the year. The average class size class size data includes all classes in Fall term (excluding Doctor’s Professional Practice).  See page 75 of the Fact Book. 

The budget presentation was an overview, individual schools/department data were not delineated. As we move forward, school and department data will be used in decision-making and there will be opportunities for further discussion.  The Provost has shared unit and departmental level data with the Deans, and they will be working to utilize those data in planning and aligning with our strategic priorities.