As promised, UNM administrators are updating the Board of Regents monthly on the preliminary planning for the upcoming budget process. In November, administrators shared with the Regents preliminary budget scenarios. The scenarios outline different levels of budget priorities, ranging from basic must-funds to student success priorities to salary increases for faculty and staff. They also offer a first glimpse into revenue projections.
Accounting for this year’s enrollment decrease and mandatory cost increases, such as insurance and utilities, the base scenario is starting off with a nearly $3 million deficit. “This is where we’d be if we didn’t do anything, if we operate on the budget where it is right now,” President Robert G. Frank said. “So obviously we must be thinking differently right from the start.”
It is still too early to have strong estimates on incoming revenue, but Frank pointed to three potential sources: an increase in enrollment bringing in additional tuition and fee dollars, money coming from the state through targets met in the funding formula and reductions in costs.
Frank emphasized that any cost reduction should be done incrementally over several years to reduce unnecessary duplications in services and to address inefficient administrative structures. Some of these strategies are well underway. A review of the campus’ information technology structure and a plan to better manage health care benefits and chronic diseases may be two opportunities to reduce expenses.
Administrative units could also be restructured. The president said Scholes Hall, where many administrative offices are based, should lead the effort with as a pilot project for how services could be shared and efficiencies created. “We can be the model in Scholes, to start the process and show how it can be done,” Frank said.
In addition to these cost reduction efforts, UNM will continue to pursue opportunities to increase revenues. Efforts to improve the graduation rate and increase the number of degrees completed should lead to increased state funding through the state funding formula. Throughout academic affairs, initiatives are underway to bring in additional tuition revenue by growing enrollments. Areas targeted for growth include out-of-state undergraduates, international students, community college transfers and high-demand master’s degree programs.
Next steps in the process will consist of the internal Budget Leadership Team (BLT) working to refine these budget scenarios and prioritize new funding requests. The BLT, which began meeting last month, is responsible for incorporating feedback from various constituencies and providing a budget recommendation to the president early in the spring semester. “The BLT is an important group, a cross section of the university committee that will be providing input on how we implement these ideas,” Frank said.