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JUNE 23, 2004 -- Michigan Tech's executive team will present a balanced general fund budget for 2004-05 (FY05) to the university's Board of Control on Friday, June 25.
The preliminary budget, announced in May, included a $7.9 million deficit.
"We are getting our finances in line," said President Glenn Mroz. "But, more than that, we are beginning to align our budget with our strategic plan."
Mroz emphasizes that the budget is a tool to help the University community pursue its strategic plan.
"As we move Michigan Tech forward, our budget process will include making decisions on our core functions," Mroz said. "What makes our economic engine work? What do we do better than anyone else? What do we have a passion for doing?"
"We are not out of the woods and we have a lot of work to do for the FY06 budget and beyond in the coming months. But I am encouraged by the work we have done for FY05. While there have been spending reductions, we have worked to make these decisions strategically."
The general fund budget proposal incorporates some revenue enhancements and savings, including:
* a 2.3 percent increase in undergraduate tuition for Michigan residents.
* a 2.5 percent increase in undergraduate tuition for non-Michigan residents.
* an 8.5 percent increase in graduate student tuition.
* a one-time state allocation of about $1.5 million, in return for holding tuition to the rate of inflation.
* a $450,000 net savings on health care and retirement costs.
* a $400,000 savings by delaying spending of Research Excellence Funds until FY06.
* a $485,000 savings based on a change in estimated financial aid distributions for FY05.
The budget assumes no increase in state allocation and no significant increase in enrollment.. It also restores salaries to levels before last year’s employee furlough and avoids across the board reductions.
The FY05 budget includes limited new spending, again aligned with the university's strategic plan. The plan restores the dean's position in the School of Technology, funds lecturer positions in sciences and arts, covers cost increases for library subscriptions, adds support to re-establish the Master of Science in Business Administration degree program, and continues to support graduate school recruiting efforts.
The budget balancing also includes a number of cuts:
* an additional $500,000 reduction in the amount of financial aid available.
* a $600,000 reduction in the information technology and auxiliary services areas.
* a $609,000 reduction in salaries and fringe benefits through administrative reorganizations already completed.
The remainder of the FY05 deficit reduction results in one-time transfers from auxiliary services, housing operations and the retirement and insurance fund.
"We have accomplished a balanced budget by making about $4 million in reductions to the general fund base and with about $4.9 million in non-base revenue, transfers and reductions," said Dan Greenlee, chief financial officer.
"Our budget job is not finished," Mroz said. "In some ways, FY06 will be more challenging, since the one-time funds will no longer be available. However, we are also developing plans to aggressively market the university, offer new programs, repackage existing programs and enhance our fundraising efforts."
The Board of Control meeting begins Friday, June 25, at 8:30 a.m. in the Memorial Union Ballroom.