Let Freedom Ring Blog

Dave Unze’s article about SCSU’s looming budget cuts raises a few questions with me, starting with this information:

St. Cloud State University is facing a budget deficit of as much as $10 million after another year of declining enrollment.

St. Cloud State President Earl H. Potter III announced Thursday that the university will implement a “flexible hiring freeze” as part of its response to the deficit. The university is working on a two- to three-year plan to close that budget gap that could include using reserve dollars and holding back 5 percent of all non-personnel budgets.

The university’s enrollment decline could be as much as 5 percent when fall enrollment numbers are released after the 30th day of classes. All but one institution in the Minnesota State Colleges and Universities system is anticipating enrollment declines.

This summer, (June 23 to be precise) SCSU announced that they’d need to cut their operating budget by $3,600,000. That’s based on FYE (Full Year Equivalents) enrollment being down 3.2% from last year’s enrollment.

The reason why people use FYE enrollment for creating budgets is because it gives them a reliable tuition revenue figure to work with. Head count enrollment tells people how many students are enrolled at a university but it doesn’t tell people if they’re mostly full-time students, mostly part-time students or a 50-50 mix. An FYE ‘student’ is based on that ‘student’ taking a full load of classes that year.

If SCSU had to cut $3,600,000 when FYE enrollment is down 3.2%, shouldn’t they need to cut $5,400,000 if FYE enrollment is down 4.8%? It doesn’t make sense to cut the operating budget by $10,000,000 if SCSU’s FYE enrollment is down 4.8%-5%. The only thing that makes sense is if SCSU anticipates FYE enrollment being down more than 5%.

I question this information:

Budget cuts alone will not get the university out of the deficit, he said. Future fiscal health is tied closely to enrollment growth through strategic academic program development, he said, as well as student retention.

It isn’t that I think significant enrollment growth won’t contribute to SCSU’s financial health. It’s that some of President Potter’s spending decisions have significantly hurt SCSU’s financial health, starting with the contract he signed with the J.A. Wedum Foundation. SCSU has lost $6,400,000 on that initiative alone. They’ve spent $150,000 a year on the Confucius Institute and another $240,000 on police officers that the City of St. Cloud should pay for or do without.

Insiders at SCSU could probably identify other spending that should be trimmed besides the thing I’ve listed. It wouldn’t hurt taxpayers’ feelings if SCSU did a better job of spending money wisely.

These budget cuts are a big thing. They’re the result of foolish spending decisions and a 4-year (and counting) enrollment decline. President Potter can’t dismiss the enrollment decline as SCSU right-sizing. It’s the result of SCSU not putting out a high quality product in students’ and parents’ eyes.

This is a real crisis. Let’s hope President Potter rises to the challenge. If he doesn’t, well…

Technorati: Earl Potter, St. Cloud State, Budget Cuts, Declining Enrollment, Tuition Revenue, J.A. Wedum Foundation, Confucius Institute

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