New university budget model ready for 2009

UMKC's dollar decisions - past, present and future

By: Derek Simons

Posted: 12/1/08

After more than two years of work, the University Budget Committee (UBC) has defined a new set of guidelines dividing up the general revenue from tuition and state funding.

The new University Budget Model (UBM) is ready for implementation in fiscal year 2009.

UBC Chair Tony Luppino, School of Law, presented an overview of the plan to the UMKC Faculty Senate Nov. 18 explaining how funds have been allocated in the past, what issues these methods brought up and how the UBC has attempted to give a more structured and fairer division.

This, according to the UBC, will provide greater predictability for future funding and, in turn, help the various academic units in long-term planning.

The new UBM will be phased in over the next four years giving some of the schools, whose funds may decrease, time to adjust.

In the current fiscal year, general revenue totals approximately $180 million, according to Luppino. There are other funds, such as the $10 million in student fees, revenue recovered from research grants and tuition from the Continuing Education program, but these sums will not be affected by the new UBM.

Of the $180 million, $98 million is from tuition and $82 million from state funding.

"This is the primary funding for the 11 academic units," Luppino said.

He added it also pays for administrative and support functions, the libraries, graduate studies and some other "central needs," such as paying off the bonds on the old Twin Oaks structure in the next four years.

"The question is: How do we fairly divide up the $180 million and why did anyone want to change from how it was done in the past?" Luppino said.

The UBC examined past practices and found some surprising results, he said.

"At first blush, it looked kind of odd and suggested … that a lot our budget was done year-by-year negotiating off of last year's numbers. And whoever negotiated the best accumulated. Bailey came out of a pretty systematic funding process on Texas campuses - he wanted to see something a little bit more formal."

Under the new UBM, each academic unit will keep the tuition it generates, an idea proposed by Bailey before the formation of the UBC.

A study of where the state funds ended up showed some schools weren't receiving any, some were getting very little and a few were getting a lot.

"Some schools weren't even getting a GRA [general revenue allocation] as large as their tuition," Luppino said.

State money will now be divided up according to a weighted formula, which takes into consideration educational costs from unit to unit. Three schools appealed their allocation and have now reached agreements with the UBC, according to Luppino.

Before the state money can be allocated proportionally, however, there are certain expenses (approximately $10 million) which are "taken off the top."

Legislative earmarks total more than $2.6 million (including $970,000 for the School of Dentistry for academic capacity), and the rest are mandated by the chancellor as "priority allocations," including the Twin Oaks debt repayment ($1,340,000 in FY 2009) and more than $4 million for the salary adjustment pool.

The third issue the UBC addressed was the appropriate level of funding for administrative and support functions.

"The Faculty Senate tracked from 2002 to 2005 what was happening to the increase in general revenue," Luppino said. "At that time, the state funding was flat. The increase was fueled by tuition increases that the students were paying. We found a very large percentage of that - something in the neighborhood of 80 percent - appeared to have gone to administrative and support units."

Since then, he said, there has been a "swing back," but under the new UBM, these funds will no longer be taken off the top. Each academic unit will now pay taxes according to usage established and regularly reviewed by a Support Cost Review Committee. For example, payments to Student Affairs will be based on the number of students in the unit and building maintenance on square footage.

Pressed by some of the Faculty Senate to release projections already calculated by the UBC, Luppino said it was premature due to the current uncertainty of the economy. He said he believed in transparency, but was reluctant to release anything until the numbers were more realistic.

"I can tell you only a few units face significant decreases," Luppino said. "Nothing precipitous with enrollment increases. The state dollars are the big question."

Another budget item still remaining to be dealt with is a list of "outstanding commitments" totaling close to $23 million. These are what Luppino termed "internal promises," and what Faculty Senate Chair Dr. Gary Ebersole said was often more of a "wish list."

Luppino said Interim Chancellor Leo Morton and Provost Gail Hackett would be reviewing these items.

He added the UBC spent two years determining the cost of instruction.

"Is it perfect? No, but it's better than saying my dean did a better job of negotiating than yours."

Ebersole said the process will be ongoing and "tinkered" with.

"It gives us a chassis with some wheels," he said.

The UBC Web site (www.umkc.edu/provost/ubc) provides details of the new UBM, as well as all of the minutes from committee meetings.

dsimons@unews.com