FARGO, ND (Valley News Live) – North Dakota State University President David Cook sent an email to the campus community on Tuesday afternoon warning of “incredibly tough” budget cuts . Among other things, Cook cites declining enrollment as the main cause, adding that he has tasked Acting Provost Bertolini with finalizing and delivering a plan to campus by January.
You can read the full email below:
Earlier today, I provided information about our budget situation to campus management that I want to share with the entire university community. In short, NDSU is facing significant reductions due to declining enrollment over the past few years. These cuts will be difficult, especially since we have been taking cuts for several years, forcing everyone to do more with less for a while. They will also be difficult because after several years of cuts, it becomes more difficult to make cuts without affecting our core academic mission. Undoubtedly, the budget cuts we face will be incredibly difficult. However, if we make these cuts strategically, together I am confident we will transform the university to meet the future workforce and research challenges that North Dakota and beyond will position the NDSU for future success.
The bulk of our budget comes from two sources, tuition fees and state funding formula revenue. Tuition and funding formula revenue is driven by NDSU enrollment, and our enrollment, like higher education enrollment across the country, has been declining, especially since 2017-18. The funding formula was created in 2013 and has served the NDSU and the state very well, but its reliance on producing student credit hours means we earn less revenue when our enrollment declines. The decline in enrollment at NDSU is illustrated below by the decline in the production of student credit hours (SCH) over time.
Current fiscal year (July 2022-June 2023)
A decline in enrollment or CHS creates a challenge for tuition revenue in the immediate fiscal year. When our enrollment declined this fall, reduced tuition revenue and other budget issues caused a budget shortfall of $2.9 million. We are already developing strategies to address this issue.
Next biennium (July 2023-June 2025)
A decline in enrollment or SCH also creates a revenue challenge in the funding formula which affects the state’s formula funding in the following biennium. For example, in the biennium from July 2019 to July 2021, enrollment has declined and as a result we are facing a decrease of $7.6 million in the state funding formula for the next biennium (July 2023 to June 2025). Additionally, as our current enrollment is declining, we anticipate further reductions to the funding formula in the following biennium (July 2025 – June 2027).
Overall, the budget reduction for the current year, plus reductions over the next biennium, project an overall budget shortfall of $10.5 million.
While the budgetary challenges described above are daunting, a number of initiatives are underway to address these difficulties. Prior to my arrival, President Bresciani and Provost Fitzgerald laid the groundwork to strategically realign our resources with the academic prioritization process. Huron Consulting assisted in this project, and you can find the results of this work here. The final report identified numerous cost reduction opportunities for the NDSU, and several committees were created to review these opportunities and provide recommendations. Many of these recommendations are already being implemented.
Unfortunately, these changes will not be enough to cover the projected deficit. Additional adjustments will be required as we modify NDSU operations to reflect a shrinking student population. We must continue to serve our students and the state by providing phenomenal opportunities for education, research, and outreach. In order to succeed in this mission, we must recognize our small size and the changing landscape of higher education. Essentially, we need to resize and organize our institution to meet the demands of our state and our region.
I’ve been working with the deans on these budget issues since the summer. In conversations with deans in particular, I have asked them to offer recommendations for addressing budgetary challenges primarily through two strategies:
- Resize and reorganize the university enterprise
- Launch of new academic programs aligned with workforce needs
Additionally, the Retention Council has proposed 5 strategies to improve our retention efforts, outlined below.
- Increased/Improved Tips
- Teaching quality
- Early intervention
- Re-enrollment campaigns
- Program Review
Improving student retention is one of the best ways we can meet our fiscal challenges, while simultaneously developing strategies to improve student success and ultimately transform NDSU.
Effective immediately, I have instructed Acting Provost Bertolini to build on the work of the Deans and the Council’s suggestions on retention. Embracing shared governance will be a key part of this approach, while gathering feedback from campus stakeholders this fall. If you have a suggestion, you can submit it by email at [email protected].
I have directed Acting Provost Bertolini to finalize and deliver a long-term transformation plan on campus by January. Once the plan is distributed, we will have further discussions with key stakeholders to finalize it and an implementation timeline.
Please understand that I know NDSU has been through many years of budget cuts, and I appreciate how difficult this has been. My goal is for us to strategically transform our operations so that we can set up NDSU for future success.
David Cook, President
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