Budget Cuts on the Horizon

With the rough economic conditions and the worsening financial conditions that Michigan currently faces, the university is facing challenging budget decisions.

Within the past month President David Eisler held three informational budget forums to address the state’s budget situation and Ferris’ current fiscal condition as well as to solicit input and concerns from members of the campus community.

The state currently is operating on over a billion dollars in economic stimulus funds yet still faces a $1.6 billion budget shortfall for next year. In the next three years revenues for the state general fund are expected to decrease by more than 40 percent.

During the forum, Eisler discussed the state’s elimination of the entire Michigan Promise Scholarship and half of the Michigan Competitive Scholarships.

In addition to pressure on Ferris from the state to constrain the tuition, the state has also increased the cost burdens of many students by reducing scholarships and financial support by roughly 54 percent.

For the 2009-2010 academic year, the FSU budget was reduced by $2.5 million, $1.6 million coming from the 3.2 percent state reduction and the remaining to cover tuition restraints. Over the past seven years, Ferris has trimmed its budget by over $11 million.

With the continued decline in state support, Eisler said that the university it became more dependent upon tuition than any time since it’s become a state institution. Currently, tuition from 105 full-time students is equivalent to $1 million in revenue.

For the 2010 fiscal year, roughly 70 percent of Ferris’ general fund revenue was brought in from tuition. That is a 40 percent increase since 1980. Over the past 30 years state funding has decreased by the same amount.

This year the university was forced to implement a 5.3 percent tuition rate increase to adapt to the decreased public education funding from the state.

Adam Fulan, a sophomore in the pre-pharmacy program, said, “Although I’m not happy with the tuition increases in general, I am pleased that [the university] was able to minimize the increase relative to other universities.”

In a university memorandum, Eisler said the career orientation of Ferris’ programs has helped maintain and expand the university’s career-oriented education, yet even the relevance of Ferris’ degree programs cannot insulate the university from the state’s economic realities.

Over the past year the university has begun looking at budget reduction priorities. The Strategic Planning and Resource Council (SPARC) has begun looking at possible budget reductions based on funding reduction projects of $5 million, $7.5 million , and $10 million respectively.