Wednesday, April 24, 2024

PSUC relies on enrollment in closing budget deficit

In the midst of an $8.4 million structural budget deficit, Plattsburgh State’s Business Affairs division has revised its five-year financial stability plan released last September.

The plan — which calls for $4.6 million in permanent salary reductions over the next five years — projects a $4.2 million structural budget deficit for the college in fiscal year 2021/2022, more than double the $2 million deficit projected by the original plan.

“There’s still a big nut to crack at the end of 2021/2022” Vice President of Administration and Finance Josee Larochelle said.

The initial plan called for a 10 percent cut in student scholarships. However, that wasn’t a feasible proposal, Larochelle said, and the revised plan has nixed the idea. Larochelle said this was the main factor in the projected deficit increase in the new plan.

Interim Associate Vice President of Strategic Enrollment Management Mark Mastrean said gift aid is a way to attract and retain students.

“It’s more an investment than an expense,” he said. “If we pulled it back too much, we would lose too much.”

Another significant revision to the plan is stretching the $4.6 million in permanent salary reductions to take place over five years instead of three, as first proposed. Larochelle said this change will “cost us more cash reserves to balance our budget on an annual basis.”

Earlier this year, the SUNY Board of Trustees submitted a fiscal year 2018/2019 budget request of $780.8 million for state-run SUNY schools, a $72.8 million increase from this fiscal year. The governor came back with a proposal to keep the 2018/2019 fiscal year SUNY budget at $708 million, the same as 2017/2018. In response, The New York State Assembly continued negotiation by requesting a $744.4 million SUNY budget for fiscal year 2018/2019, and the New York State Senate requested the full $780.8 million.

“That’s more hope than we’ve had in at least eight years,” Larochelle said.

The final SUNY budget for the 2018/2019 fiscal year is still pending and is scheduled for release the first week of April.

Larochelle said PSUC’s financial stability plan does not depend on any increases in the SUNY budget. So if there is an increase, it could help close PSUC’s deficit, she said.

Enrollment is the largest factor in the college’s financial stability, and though PSUC saw a slight increase in total headcount enrollment for the fall 2017 semester, enrollment figures are still hovering low compared to historical data.

The revised plan now plans for an increase in revenue stemming from a projected increase in total headcount enrollment. The revised enrollment figures, which were approved by the president’s cabinet in January, show an expected increase in total fall-semester headcounts of more than 100 students per fiscal year through 2021/2022 compared to the original plan. But with racial issues igniting on campus this semester, some have voiced doubts.

“It is perceivable that (these issues) will have an impact,” Larochelle said. “If we don’t meet our enrollment targets, it will negatively impact our financial stability plan.”

Mastrean echoed Larochelle, saying many people are “very concerned” as to whether these issues will affect student numbers.

After a former PSUC student’s racist Snapchat prompted fiery responses from peers in February, news spread quickly.

“Partners in our New York City organization were asking about it the next day,” Mastrean said. “Our counselors on the ground were fielding questions about it. We’re very worried about it.”

He noted that because New York City is one of the only areas in the state experiencing demographic growth, the school is “heavily invested” in recruiting there.

Student Association Vice President of Finance Shiyiheeim Nartey-Tokoli agreed that unresolved tensions on campus could create an issue for maintaining or growing enrollment. A drop in numbers would affect the Student.

Association’s budget, he noted, which would in turn affect campus organization funding allocations across the board.

At a financial stability plan revision briefing on March 22, Interim Provost and Vice President of Academic Affairs Michael Morgan said the school has “no idea” yet if the recent racial issues will affect enrollment numbers, and ultimately, the budget.

“It isn’t any one thing that changes the (enrollment) numbers,” Morgan said. “It’s a very complex picture.”
He alleged that these types of issues are “happening in a lot of places.”

“What are people going to do? Go to another institution where they are dealing with the same thing?” he said. “They want to be at an institution where we’re dealing with it and actually addressing it and doing the work.”

Morgan would not name any other institutions dealing with racial issues.
“I don’t know how public that is,” he said.

Mastrean said “the chief problem the college faces is we don’t have an uptick in our traditional markets (for recruitment) in terms of total numbers.”

Regarding the enrollment projections in the financial stability plan, “I think they looked at historical projections, decided our market was shrinking and made a guess,” Mastrean said. “Calculating target enrollment is very hard. It’s not an exact science.”

Larochelle also acknowledged the difficulty of predicting enrollment numbers. But “these are the best numbers we can put forth,” she said.

The financial stability plan also relies heavily on the $4.6 million in permanent salary reductions over the next five years. PSUC secured about $662,000 in salary-cut savings for fiscal year 2017/2018.

The cuts for 2018/2019 total about $1.5 million, including roughly seven contract non-renewals. Larochelle has confirmed that some of these non-renewals involved PSUC lecturers. The 2018/2019 salary cuts also include about three retirements or resignations and six position vacancies that the school has decided not to fill.

Salary cuts for the remaining years of the plan projected $1.3 million in fiscal year 2019/2020, $608,000 in 2020/2021 and another $608,000 in 2021/2022.

The current plan also relies on temporary salary savings of $5.7 million over the five years, which Larochelle said is achieved on an annual basis by leaving positions vacant for a period of time. But she added that those positions are “of critical nature” and must eventually be filled.

“We need to leverage these savings,” she said. “We need to take money out of the departments and put it toward our financial stability planning.”

Aside from cutting back the salary budget, PSUC has formed budget response teams that are searching for ways to increase revenue. The college is also looking for other ways to reduce spending such as increasing efficiency to lower utility costs.

The financial stability plan is continuous, and in fiscal year 2018/19, it will include projections for 2022/2023.
“It does not end in 2021/022,” Larochelle said.

She acknowledged that the projected $4.2 million deficit currently projected at the end of 2021/2022 is “a big hole to fill with cost efficiencies and revenue generation.” Still, she believes financial stability is achievable.

“The question the campus is wrestling with now is ‘what kind of college do we want to be?’” Mastrean said. “It may be true that SUNY has too many colleges open, and the state university might decide to start closing colleges. We would have no control over that.”

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