Eastern Michigan University’s Board of Regents adopted a 2012-13 budget June 19 that includes a general fund operating budget of $290.6 million, an auxiliary activities operating budget of $42.1 million and a capital budget of $21.7 million. The board also received a three year capital plan.
The board voted separately on each of the budget’s four components, all of which were approved unanimously.
EMU President Susan Martin said, “This budget seeks to limit costs to students while providing an excellent education,” in a statement released the same day by EMU Executive Director of Media Relations Geoff Larcom.
The statement also said no layoffs are planned under the new budget.
Regent Mike Morris said the budget is well thought out, “fiscally responsible” and responds to the student body’s need for better technology on campus.
General fund operating budget:
The general fund operating budget is a balanced budget, with $290.6 million in revenues and expenditures. Revenues consist of tuition and fees of $209.6 million; state appropriations of $66.5 million, with $64.6 million as the base appropriation and a $1.9 million one-time, merit-based state appropriation; and $14.5 million from other revenues.
While $195.7 million of the $290.6 million 2012-13 general fund operating budget is set aside for salaries and benefits ($142.4 million and $53.3 million respectively), EMU’s Chief Financial Officer John Lumm said using 67 percent of the budget on salaries and benefits is about average for similar universities.
“For Eastern, Western [and] Central [Michigan] and Grand Valley [universities], the portion of the budget going towards salaries and benefits are all in the 60-70 percent range,” Lumm said.
The $209.6 million from tuition and fees will include a 3.95 percent increase in tuition and fees beginning fall 2012 (see story on tuition increase on page 3), with $1.1 million being contingent upon achieving a 1 percent increase in student credit hours.
EMU Director of Admissions Kathryn Orscheln said she feels the 1 percent increase in student credit hours is a reasonable expectation.
“When we’re anticipating enrollment and setting a budget based on that, we always choose something that we think is very realistic,” she said.
As of June 22, Orscheln said freshmen enrollment is up 9 percent and transfer student enrollment has increased by 5 percent, from the same time last year. She said it’s a significant increase from last fall and there are still a couple hundred students who have yet to attend EMU’s new student Fusion Orientation, which may drive those numbers even higher by the start of the fall semester.
While the base $64.6 million state appropriation is the same amount the university received last year, the $1.9 million one-time, merit-based state appropriation is a bit more “complicated” to explain, said Lumm.
“The State created a ‘performance funding’ pool of $36.2 million in one-time funding, and the funding is allocated to the 15 [Michigan] public universities based on six metrics,” Lumm said.
The $36.2 million breaks down as such:
-$9.05 million: Awarded based on university tuition increases of less than 4 percent for fiscal year 2013.
-$6.04 million: Awarded based on the number of undergraduate degrees/certificates produced in “critical skills” areas, such as accounting, architecture, physical and natural sciences, computer science and engineering.
-$6.04 million: Awarded based on the number of earned undergraduate degrees compared to the university’s peer institutions, as classified by the Carnegie Foundation.
-$6.04 million: Awarded based on a tiered formula of the university’s undergraduate six-year graduation rate, as defined by the National Center for Education Statistics, compared to Carnegie peer institutions.
-$6.04 million: Awarded based on each university’s reported administrative expenditures as compared to Carnegie peer institutions.
-$3.02 million: Awarded based on total research and development expenditures (restricted to seven universities, which did not include EMU, based on their Carnegie classification).
Auxiliary activities operating budget:
The $42.1 million auxiliary activities operating budget is also balanced; its revenue takes into account the 4.95 percent increase to room and board rates approved by the board on April 17, and reflects an expected increased housing occupancy. The university predicts over 3,600 students will reside on campus in fall 2012, which would be about a 5 percent increase.
Orscheln said the estimated 5 percent increase is based on the number of students who have completed housing contracts, so the prediction should be close to actual numbers.
The capital budget of $21.7 million includes $8.5 million to finish EMU’s Mark Jefferson Science Complex construction project, which will be completed on budget ($90 million total project cost) and on schedule for fall 2012.
Three-year capital plan:
The board received and filed the three-year capital plan for 2012-13 through 2014-15, which anticipates earmarking $41.7 million for investments in campus projects.
The proposed projects include $11.9 million in academic facilities; $10.6 million for classroom technology, campus wireless and information technology infrastructure; $6 million for housing, dining and student facilities; $5.8 million in deferred maintenance; $2.9 million for parking and roadways; $2.2 million in athletics facilities; $1 million for contingency and additional needs; $0.6 million for safety and security; and $0.525 million in energy conservation.
Larcom’s press release said 2008 through 2013 represents a period of “unprecedented” capital investment at EMU, during which time the university’s capital spending will exceed $210 million.
The board also approved documents changing the management of the Eagle Crest facility, by terminating the agreement with the Eagle Crest Management Corporation and approving an agreement with Eagle Administrative Services, effectively relieving EMU of financial responsibility for Eagle Crest.
Finally, the board also approved new policies on identity theft prevention and fraud, revisions to emeritus staff status and changing the university’s definition of a policy.