Now that the damage has been assessed, the university has begun its work in balancing its 2013-14 operating budget, which suffered another reduction in state support last week.
The day the 2013-14 fiscal year began (July 1, 2013) President John L. Crain released a statement outlining the “final information” of the university’s finances.  In his statement, Crain broke down each of the cuts and additions to the campus’ budget; when all is said and done, the university has lost approximately $2.7 million. Compared to other cuts Southeastern has faced in the past, some of which neared $10 million, $2 or $3 million may not seem like much. However, these cuts have been going on for a while, and their added weight is taking its toll.
“I think that the challenge we’re facing is the cumulative effect of the cuts,” said Sam Domiano, interim vice president of administration and finance. “The first reduction came in the December of 2008, and they’ve continued since, including several mid-year reductions. It’s actually becoming more and more complicated. Challenging may be a better word, actually, because we’ve had these cumulative reductions over the course of the last several years.”
Of the total reduction, only $1.3 million of it is from state financial support. The rest of it is attributed to rising costs in services like retirement and insurance. According to Domiano, balancing this rise in costs is worth the headache.
“Really those are costs that we will have to accommodate,” said Domiano. “We’re going to have figure out during the budget process, which is what we are in the middle of right now, is how to accommodate both the reduction in revenue and the increase in costs. This is basically $2.7 million that we have to come up with.”
A major sticking point for Crain in his statement was the involvement of students in this year’s finances. According to Crain, the enrollment of new freshmen is expected to be similar to last year’s number. However, the university is expecting a 400-450 reduction in returning students due to increased tuition and fees caused by the GRAD Act.  When asked if the increases in tuition make up for the loss of students paying tuition, Domiano says that is not the case.
“I think you would think that initially, but in the last several years the amount we have anticipated receiving from the tuition increase has been offset by reductions in state appropriations,” he said. “For example, of what has been happening, if we were going to gain $6 million from a tuition increase, we would lose $6 million in state appropriations. We’re not realizing that tuition increase, so this makes it even more challenging because that has somewhat been accounted for. Right now, we are seeing a decline in enrollment, so you’re going to have to offset that further decline in enrollment.”
Domiano also shed light on a new fee that students will have to pay in the fall semester. As a result of HB 671, all students will pay an additional $4 per credit hour, capped at $48. This fee will assist in campus operation and upkeep.
After five years of constant budget cuts the university has become adept at balancing its finances. During past balancing processes, and in the current one, the administration has reached out across campus for ideas on cutting costs and generating revenue.
“There’s actually a process that involves Dr. Crain, the vice presidents and several folks across campus that have been engaged in discussions about the budget, even prior to our understanding of the allocation,” said Domiano. “That’s always a critical component, but you can’t really wait until then to find out what our opportunities might be regarding increasing revenue or decreasing costs. That’s why there were committees, earlier on in the semester looking at things. Like with Dr. Bourg who chaired a program review, leading several faculty members in reviewing academic programs, looking at not just costs but also quality. There’s also the budget advisory committee. They’ve been soliciting ideas from the entire campus just looking for thoughts and ideas [to bring down costs and generate revenue].”
Already, the administration has implemented the “administration overhead allocation,” which will attach a cost to services that were free in the past.
“The overhead cost will be assessed to non-operating fund departments that receive administrative/operational support from various units on campus, including, but not limited to, the Controller’s Office, Human Resources, Purchasing, Internal Audit, etc. but do not otherwise contribute to these essential operations,” said Domiano. “Historically, the university has assessed such a cost to auxiliary operations; however, given the budget situation, the university finds it necessary to assess a similar cost to other non-operating departments.  A formula was developed to allocate the cost on a consistent basis using a proration of personal services and overall budget size, and the Budget Office is communicating with these units as needed and appropriate.”
According to Domiano, committees will be tinkering away at the budget to maximize its efficiency until August 2, when the final draft of the budget is due to the University of Louisiana system and board of regents. Until then, Domiano and his staff will work weekends and long nights until the job is done.
“It’s something that you just have to move through,” he said. “We’re working at it and lots of folks are very busy and taking the steps to meet our deadlines and be very diligent in our work. Our interests are in line with those of the students, and we have the university at heart; so we’ll just keep moving through it.”