Jan. 24, 2009
Hubbard uses opening speech to address budget crisis
President Dean L. Hubbard delivered his final address before a general meeting of the Northwest Missouri State University faculty and staff last week. The speech was almost entirely devoted to the state of Missouri's fiscal outlook and the possible impact of a revenue shortfall on University funding.
Hubbard, who will retire this summer after 25 years as Northwest's president, used the occasion -- what amounts to a twice-yearly state-of-the-University speech -- to deliver a message of reassurance and optimism, and explained why he expects Northwest to weather probable state budget cuts precipitated by the current economic crisis.
As requested by the Missouri Department of Higher Education, the state's public colleges and universities presented scenarios for cutting their budgets by 15, 20 and 25 percent. The scenarios were made public in late December.
Hubbard told the group he believes cut more likely would be 10 percent.
But even a best-case scenario of 10 percent or less poses challenges because, according to Hubbard, Northwest's fixed costs are increasing at a rate of about 6 percent a year. Continuing enrollment growth is adding cost pressures as well.
One way to contain growth-related costs, such as the need for new residence halls, is to cap enrollment, but Hubbard believes such a strategy could backfire when the economy begins to recover.
"If we believe that the economy is going to turn around (limiting enrollment) would be a bad strategy for us, because the funding formula that's been adopted by the Coordinating Board for Higher Education is driven by enrollment growth," he said.
As for dealing with whatever funding reduction actually occurs, Hubbard took little off the table, including the possibility of across-the-board budget cuts for operations and maintenance and selective cuts for programs, including attrition and layoffs.
Hubbard, an internationally recognized expert on quality management systems, said his favored method of cutting costs is to increase efficiency, and he called all University employees to ask themselves what tasks could be eliminated, shortened, automated or accomplished at lower cost.
"If you're willing to put in the time that it takes to do this -- because it is rather a tedious accounting-type activity-- there is a payoff," Hubbard said. "But this is an approach that all of us, as a family, can use to improve efficiency on campus."
In conclusion, Hubbard said Northwest would best be served during the fiscal crisis by continued reliance on the "core values" of its Culture of Quality, the cardinal rule of which is "students come first.
"We do not compromise our Culture of Quality in times of financial stress," Hubbard said. "We focus on our students and stakeholders. We don't start focusing on ourselves."
Hubbard said there was no way to predict what specific steps the University would take until the state budget picture takes shape later this quarter. Another unknown is the impact of President-Elect Barack Obama's proposed stimulus package.
"The only thing we know for sure right now is that we are in difficult financial times, and that they will continue for a while," he said. "We do know that when the economy does return to health there will still be universities. Some will have been weakened by what they've been through and others will be even stronger. In the past, I would argue that Northwest has always emerged stronger, and that's what we intend to do this time."
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