MSU Finance and Administration Division

February 4, 2003

TO: Faculty and Staff

FROM: President Richard Davenport

RE: Budget Planning

Vice President Dean Trauger has sent you two communications during the
past two weeks regarding the state's budget situation. He outlined what
the immediate impact the Governor's proposed solution to the FY03 state
budget shortfall would have on MSU's budget-a $2.1 million reduction.

It is important to understand that the FY03 appropriation reduction is a
base budget reduction which also will require adjustments in the FY04-05
budget plan (FY04 begins July 1, 2003). Fortunately, due to a reserve
balance of $4 million, MSU will not have to make major base budget
adjustments immediately.

As Dean indicated, the Planning and Budget Sub Meet and Confers will be
holding meetings to discuss the issues and the possible impact the
state's budget crisis will have on MSU. Given the many unknown factors
that influence MSU's budget for FY04, I am asking the Cabinet and the
Planning and Budget Sub Meet & Confers to work together in taking a
thoughtful and deliberate approach to their planning. Given our
positive enrollment picture for next year, I am recommending the
institution go forward with faculty searches to address our staffing
needs for FY04. MSU's enrollment continues to grow, and we must be
prepared to serve our students this fall.

Considering the magnitude of the state's budget shortfall, I believe MSU
should take action now to prepare for a leaner budget in FY04. These
measures will be effective immediately, and there will be additional
steps forthcoming as the Planning and Budget Sub Meet and Confers
progress with their work in addressing how MSU should approach the
FY04-05 budget challenge. The work of the sub meet and confer groups is
extremely important, and I plan to personally attend their meetings to
get involved in the planning efforts as often as my schedule permits.

The following actions are being taken in response to the state's budget
shortfall:

* The Human Resources Office has sent a memo to staff outlining
options for voluntary reduction of time and will be seeking input from
individuals and groups.

* All non-contractual out-of-state administrative and professional
development travel will be curtailed and restricted to the most
essential travel.

* An administrative review process of all non-teaching position
vacancies will be implemented, i.e., consider options to filling
vacancies such as reconfiguring, consolidating, or eliminating duties in
the position descriptions.

* An administrative review process of all contracts for services
will be implemented.

Until we have greater certainty of the FY04 budget challenges, these
represent only the first steps to be instituted.

The University Budget Web site http://www.mnsu.edu/finadm/comments.html
will post the latest information on MSU's budget situation, plus minutes
from all the meetings of the Planning and Budget Sub Meet and Confers.
You can also use the Web site to submit suggestions to the Planning and
Budget Sub Meet and Confers regarding the University's budget.

Clearly, the state's budget shortfall will impact higher education and
is a major challenge to MSU's ability to serve its students. I am
confident, however, that working together we will meet the challenges
and continue to be a strong, fiscally-sound academic institution. It is
equally important, at the same time we are reviewing our budget, also to
move forward with our strategic priorities and to be thinking about the
positive steps we will want to focus on to move our University forward
to the next level of prominence.

content: gary urban