TO:  MSU-Bozeman Campus Community
FROM:  Geoff Gamble President
DATE:  July 25, 2002

You have probably been following in the media the current budget challenges faced by the state. Though some have articulated grave consequences for the Montana University System, I am confident that we are and will continue to be in a strong position to maintain the quality of the academic programs and services available to our students. I am writing to assure the campus community that we are well positioned to partner with the Legislature and the Executive Branch in responding strategically and effectively to the current budget issues.

In June, Governor Martz announced budget reductions for this current fiscal year because a dramatic decline had occurred in tax revenues that forecast a significant budget deficit by the end of the year. A 3.5% reduction was imposed on the Montana University System; for MSU-Bozeman, that meant $1.4 million for the general operating budget, $350,000 for the Montana Agricultural Experiment Station, and $161,000 for Extension Service. Our University Planning and Budget Analysis Committee (UPBAC) recommended a series of steps for reaching the 3.5% target for the campus, which included a combination of expenditure reductions and a tuition surcharge of $2/credit. Student leadership was represented in these discussions, and supported the surcharge as an essential element in protecting the quality of academic programs and services. These recommended steps were approved by the Board of Regents on July 11.

In response to additional declines in revenue projections, the legislature will meet in special session in early August to further reduce the budgets of state government. The Governor has developed recommendations for these additional budget cuts, which include a 3.5% reduction, or $5.1 million, for the Montana University System.

Montana is not alone; most other states are facing even more difficult fiscal challenges. We recognize the hard decisions our legislators will have to make, and we stand ready to partner with the state in doing our fair share to help address the revenue shortfall.

In determining how best we can respond, we are cognizant that the state has made a huge investment in our University, and it is critical that we and the state partner to protect that investment and manage these assets responsibly. We have worked hard this past year and a half to develop planning and decision-making processes which are campus-wide and focused on strategic goals and priorities. UPBAC has done an excellent job of developing recommendations for meeting the initial 3.5% reduction, and they will make the recommendations for absorbing the reductions imposed in the special session. UPBAC enjoys a broad representation from constituencies across campus, and the nature of that representation will ensure the support of our entire community for the plans that are developed.

Though access is a priority concern, of equal importance is protecting the quality of programs and services which our current students have enjoyed, and which we have promised our incoming students. Each of the MSU campuses serves a different clientele and mission, and therefore each campus solution will be different. For the Bozeman campus, our plan to respond to the first budget cut has been to protect students as much as possible by relying heavily on expenditure reductions and holding the tuition surcharge to a minimum ($2/credit, up to a maximum of $24/semester.) As a result, we now have less flexibility for dealing with this second proposed budget cut. Based on the Governor's plan for further reductions, our proposal is to increase the surcharge in spring semester an additional $9/credit, which will increase the surcharge to $11/credit, up to a maximum of $132, for second semester. Overall, the University will recover 50% of its FY03 reductions through a tuition surcharge, in accordance with Board of Regents' policy. Students are encouraged to ask about financial aid assistance for this tuition increase.

We have made promising strides in our efforts to recruit and retain students and to fund-raise. That progress will be even more important now, as we deal with lessened state support. Even with tuition surcharges, we remain competitive. As other states struggle with similar or greater revenue challenges, they too have found it necessary to increase tuition. The bottom line: Our price/quality ratio is outstanding compared with our regional and national peers. We offer a terrific education for the investment, both to our Montana residents and to our out-of-state students.

Though we have the ability to soften the reductions to the instructional budget with some backfilling of tuition, there are two agencies at MSU that do not have this opportunity. The Montana Agricultural Experiment Station and the Extension Service do not have a revenue source like tuition, and therefore are expected to absorb the full budget cut. We will make concerted efforts to convince the Legislature to provide more protection to these agencies.

Thanks to the dedication of so many of you on campus, we have developed a lot of momentum already, and we will continue to work in positive ways to build upon our strengths and successes, and further enhance our position as a regional leader in higher education. I am convinced we have too much talent in our faculty, staff, and administrative and student leaders to doubt our ability to absorb these budget reductions in a manner that protects the strategic interests of the University and its constituents.

This is a period of transition from reliance on state support for the majority of our instructional budget to developing more self-sufficiency by increasing other revenue sources. The taxpayers of Montana have made a significant investment in the University System, and we will protect that investment by ensuring a continuation of our service to our students and the state as a whole. We have healthy processes in place and need to stay the course by concentrating on our recruitment and retention of students and our fund-raising efforts. Success in these arenas will allow us to do our fair share in helping the state address its current fiscal challenges, while continuing to enhance our instructional, research and service missions. We owe our students and the state of Montana no less. I thank you for your continuing support for our goals and our priorities, and for your individual efforts in enhancing the quality of our University.