UM Faces Tough Choices With $16M Budget Gap

Monday, April 29, 2013

When students are fewer and money is tight, the choices become painful. Should courses in Spanish be reduced, despite the popularity of the language? Or should it be Italian, Latin or Greek?

The decision is one of many facing University of Montana administrators and deans as they shape next year’s budget. The university is facing a shortfall of $16 million, and it’s looking for ways to cut costs with minimal impacts on students and faculty.

“The fact is, there will be controversy about any kind of budget adjustment, no matter what you do,” UM President Royce Engstrom said last week in an interview at his Main Hall office. “In the end, some decisions have to be made.”

At issue is the university’s $157 million general fund. Two-thirds of the fund is based on tuition and fees, while one-third comes from state appropriations.

Both funding sources come with a high degree of uncertainty. Money from the Legislature is subject to change, as are enrollment figures. Competition to recruit incoming freshmen is fierce, and the school’s success in that realm has deep implications on the institution’s fiscal health.

“There’s always uncertainty about the tuition side,” said Engstrom. “You don’t know the enrollment until students show up in the fall. You always prepare a budget on your projection of enrollment, and it always includes some uncertainty.”

Based on last year’s 6 percent drop in enrollment, administrators are preparing to cover a potential $16 million budget gap, and they’ve asked department heads across campus to prepare plans to cut spending from 2 percent to 8 percent.

But the figures are based on last year’s enrollment figures and represent a worst-case scenario moving into next year. Engstrom said the budget and any possible cuts that come with it will be adjusted as projections change over the next month.

Read more »