In the past year it has been no secret that McNeese has faced a significant reduction in appropriations. As the nation and our state of Louisiana have felt the strain of difficult economic times, higher education has particularly been affected by the shortage of state funding. This year, we will be facing an even greater reduction in funds than the one we faced last year - about $4.7 million dollars in cuts.
The hard truth is that now and in the future, higher education institutions will have to find ways to do more with less. The environment is changing, and in order to survive these economic challenges McNeese has no choice but to adapt and take steps to cut costs to make up for the multi-million dollar cut in revenues.
One action we are talking to reduce costs is reorganization. Last year we reorganized administrative services in a manner that reduced our salary and benefit expenses, especially at the Senior Staff level. This year, we are forced to reorganize yet again.
In addition, the budgets for each department will have to scale back budget lines relating to supplies, travel and other discretionary areas. Unfortunately, employee salaries will remain frozen despite the fact that our faculty and staff have seen a significant workload increase in the last several years and no increase in pay.
Fortunately, we have so far been able to avoid layoffs of faculty and staff; however we do have 68 fewer employees than we had at this same time last year. This is because we have chosen not to replace employees that have opted to leave because of retirement or other opportunities. This saves us money in the number of salaries and benefit packages that are taken out of the overall operating budget. Again, this means that job duties have increased for those departments who have had employees leave and whose positions have remained unfilled.
This year, we were forced to balance our budget by using funds that we carried forward from prior years. However, this is not a practice that is sustainable for the future. We cannot plan future budgets based on money that we simply hope will be available to us at the end of a fiscal year. Consider this scenario: if you are working out your family budget for the coming year and you determine that the only way you can balance your budget is to take money out of the savings account you had set aside-let's say for retirement or for your child's education-you really can't continue to balance your budget that way. You need to find other ways to lower your monthly expenses or, better yet, to increase your monthly income so that you can continue to keep a healthy cushion to handle contingencies that always happen.
PLANNING FOR THE FUTURE
This is the challenge that McNeese State University is now facing - to find a way to increase revenue while decreasing our expenses. This year, we will conduct a detailed analysis of every academic program we currently offer here at McNeese to determine the operation costs and return in revenue for each one. When I say revenue, I am referring to a combination of funding we receive for those credit hours as a result of the Board of Regents funding formula combined with funding we receive as a result of student tuition dollars based on credit hours selected by each student.
Programs that are the least expensive to operate but offer the highest return in revenue will continue to be promoted, and we may even look for ways to expand our promotion of these programs. Programs that are expensive to operate, but offer a high return in revenue will be examined to see if there is anything we can do to reduce expenditures without sacrificing academic quality. We will also look to see if we can increase revenues in these areas, through grant funding or other ancillary measures.
There will be some programs that don't cost us much to operate, but also don't bring in much in the way of revenue. These programs will be examined to see if there is anything we can do to increase the promotion of these programs or if there are other ways to increase their revenues without increasing costs.
And finally, there will be some programs that are expensive to McNeese, but aren't carrying their weight in terms of revenues. This is the area where we plan to spend the majority of our time and effort. We will have to ask ourselves the question, "Why are we funding these programs?" It may be that we will discover that certain programs are fundamental to our mission and vision, even though they are expensive to operate and result in very little payback in terms of revenue generation. But if that is not the case, then we may be forced to make some tough decisions. Can these programs be streamlined or maybe consolidated? Is it really necessary for the university to continue carrying the heavy cost burden for these programs if student demand is low and there appears to be no potential to increase demand in the future?
The times are tough economically, but one thing I have taken away from our strategic planning process this year is that we have extremely valuable resources in our corner. We have a faculty and staff who are experts in their fields and who care deeply about the students that they instruct. We have stakeholders with roots that go deep in their dedication to McNeese. We have students who are bright and determined to succeed in their future endeavors. And we have a community that shows phenomenal support to our university. On behalf of everyone at McNeese thank you for your role in helping us to develop our plan for the future journey of McNeese State University.