Board of Regents Offers 3 Major Budget Proposals
During the November 25th campus convocation, SDSM& T President Dr. Richard Gowen described three major budget reallocation proposals being reviewed by the South Dakota Board of Regents ( BOR). The three proposals are as follows:
Shift from Formula to Base Funding
Going off the budget formula based on enrollment is a very significant change in budget policy. Due to an enrollment decline, under the current budget formula the higher education system faces a loss of $ 1.6 million and 30.1 FTE in hiring authority for FY 99. The BOR is proposing to shift to a base funding system, reducing the FTE authority, and redirecting the $ 1.6 million to improving salary competitiveness.
If the BOR takes no action, the higher ed budget will automatically be reduced by $ 1.6 million and 30.1 FTE hiring authority. Dr. Gowen told those attending the convocation that all of the budget analyses have not been completed and thus it is too early to tell exactly what the shift to base funding means for SDSM& T.
A budgetary base would be established for each university using the formula average for the last three fiscal years ( FY 96- 98). The institutional bases would be adjusted each year for enrollment. Tech’s enrollment base for Fall 1998 will be based on Fall 1997 and Spring 1998 enrollment ( currently 2210 headcount; 1855 FTE students). If the institution’s enrollment changes between 96- 104%, there will be no change in the base.
Approximate budget calculations indicate that SDSM& T’s share of reductions under the current formula system would result in a $ 485,000 budget cut and a loss of 8.6 FTE hiring authority. Under the 3- year average base funding proposal, Tech’s reduction would be about $ 200,000.
In an effort to improve salary competitiveness for faculty and exempt staff, the BOR is proposing to match CSA salary increases with an average 10.7% increase in three years. These salary increases would be discretionary and NOT across the board.
This proposal would require $ 13 million for the system to be raised from all sources. The amount Tech would need to raise would be $ 1,162,568 at the end of three years.
BOR proposes raising the $ 13 million from the formula adjustment ($ 1.6m), other FTE positions ($ 3.9m), student fees ($ 5.6m), and other federal grant sources ($ 1.8m). The exact FTE reductions for Tech faculty and exempt staff is unknown at this time. Student fees- not tuition- are proposed to be increased $ 3.06/ credit hour for three years, which would represent an approximate increases of 8 1/ 2- 9% over three years.
State Policy Incentive Funding
The BOR proposes to set aside 5% of the total base amount into an incentive pool with the following criteria for tapping the pool:
1%- Access for SD students
1%- Economic growth programs
1%- Academic improvement
1%- Increase non- state funds
The BOR will consider these proposals at its December 11- 12 meeting in Brookings. Action by the State Legislature is required in order to retain the $ 1.6m.
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