SMSU facing a $3.2M budget deficit

MARSHALL – The next six weeks are going to be critical for Southwest Minnesota State University, as the institution looks for ways to address a $3.2 million projected deficit for fiscal year 2015.

SMSU President Connie Gores called the situation a challenging one, but that it was also an opportunity for the institution to shape its own future.

“It is real and it’s significant,” Gores said about the deficit. “It’s not as high as what some other institutions have dealt with, but at the same time, it’s significant for us. So what we need to do is take the steps necessary to invest in our future, so we can thrive and so that five years down the road, we’ll be equally strong and we won’t have to go through this again.”

The SMSU administrative team met with the five bargaining units on campus this week, laying out possible discontinuation and reduction options. Those groups are then expected to provide feedback, or better yet, solutions, Gores said.

“We identified a potential list of where we might reduce or discontinue some programs,” Gores said. “It’s a list of possibilities. Then we’ll get input, feedback and ideas or suggestions and possible solutions, and we’ll work further on that. We’ll work this through. We want to be in partnership as a community and with the bigger community. It’s never easy, but it’s necessary right now.”

Gores noted that the administrative team would examine all areas of the university, including academics, athletics and student services, to find savings and efficiencies.

“We’ll look at all of them,” she said. “We’ll look at what we can do to survive today and what will prepare us to thrive tomorrow.”

Gores is optimistic about the future because of the institution’s past and because of the people currently on campus.

“I’m encouraged by our history,” Gores said. “This institution has a history of being resilient, and we have people who work well together, people who will roll up their sleeves and find solutions. That’s what we need to do, is find solutions for this and then move forward.”

Gores said she was also appreciative of the way the bargaining units have handled the challenging situation so far.

“I have been very impressed with the thoughtful, deliberate way they’ve approached this,” she said. “I think they love the institution. They care about it deeply, and they want to do what’s best for the institution, as do all of us. I’ve only been here six months, but this is home to me. I want to see it thrive, too, so we have to do what’s necessary to make that happen.”

Gores reported that a number of factors contributed to the deficit, including shifting demographics, both nationally and regionally, declining state appropriations and a lack of growth in enrollment.

“Basically, our expenses have grown, but our revenue has declined,” Gores said. “There has been inadequate ongoing state funding to support planned compensation and inflationary costs. The state also negotiated some settlement contracts that exceeded our planning estimates. And then we had a decline in our enrollment revenue.”

Tuition rates were frozen, Gores said, so SMSU was unable to make any revenue that way.

“So really, our expenses increased, but our revenue did not increase, and there’s this gap,” she said. “That’s what is going on.”

SMSU is not alone in the challenge, as all of higher education is in a state of transition, Gores said. The bottom line, however, is that SMSU alone needs to come up with possible solutions, she said.

“We need to be creative and innovative, like our founders,” Gores said. “They had a vision, and they stayed with it. They worked hard and didn’t let roadblocks get in their way. So we need to tap into that same kind of resiliency and tenacity to make this all work.”

Beginning with the teaching faculty group, which is expected to get back to the administrative team by Feb. 12, solutions will hopefully be filtering in, Gores said. Other bargaining units will follow after that, she said, noting a March 1 deadline for rostering faculty members.

“I know there are creative people in the faculty and other places who will have ideas that we haven’t thought of,” Gores said. “There’s no question about that. So you never know what they’ll come up with. They may refigure a major, deciding that maybe a particular class is no longer needed. Or maybe they’ll merge two classes and make one new one. Maybe they’ll partner with another department or major and create something new. Maybe a major will become a minor.

“I think there will be a variety of ways to look at this.”

Gores believes that College Now was one of those programs that was innovative in its time.

“College in the Schools is where our faculty worked with high school faculty to teach college classes in the high school,” she said. “It has served our institution well. It doesn’t bring a lot of revenue, but it also doesn’t have the expenses. It was unique and very distinctive at the time and that’s the kind of innovative program that we’ll look at for the future.”

The SMSU administrative team identified three main themes that it’ll use to guide it through this difficult process. The focus will be on educational excellence and distinctiveness, student learning and success and meaningful partnerships and engagement.

“We need to decide what will help us be robust and really flourish,” Gores said. “We also need to meet the workforce needs of the future as well.”

Gores said she’s challenging people to spread the word about SMSU.

“Sometimes, we are way too humble,” she said. “We assume everybody knows about us. But not everybody knows what a gem of an institution we have here. So that’s a way the community can help. We have a wonderful university here that works directly with students, to help them be successful.”

SMSU has a rare claim, Gores said, noting that the institution has been cited by independent entities multiple times in the past six months for SMSU’s return on investments.

“You put our lower cost of attendance, our high employment rate and our lifetime earning of our graduates together and it’s called return on investments,” Gores said. “Ninety-nine percent of our students find employment within six months after graduation. And of those, 95 percent are within fields of their study. I don’t know of any other institution that can make that claim.”

Gores said SMSU’s rural nature is also encouraging. Rural people seem to pull together when times get tough, she said.

“We’re a community and we’re a family,” Gores said. “We’ll work together on this. It’s going to be difficult, but I know we can rise to the challenge. We’ve done it before and we can do it again.”