CFA: state budget not a concern

By Maggie Sullivan

Tweet: VP Knorr and Campus Faculty Association differ on state budget concern.

While some University officials have expressed concern over a lack of a state budget in Springfield, the Campus Faculty Association recently made a claim that the shut down in Springfield does not affect the University’s financial situation.

“The budget show-down in Springfield has made no difference whatsoever to the university’s financial situation so far,” the CFA asserted in a report on their web site.

The report goes on to state the $49 million currently owed to the University from the state for fiscal year 2015, can easily be covered by the University temporarily.

“Indeed, the university has socked away more than 30 times as much [the amount owed] in investments over just the past five years, and the university generates more than 20 times as much each year in tuition revenue,” the report states.

    Sign up for our newsletter!

    Walter Knorr, University vice president and chief financial officer, gave a report on the University’s budget situation and discussed the budget stand-off at the Board of Trustees meeting Thursday.

    “The state budget remains at an impasse,” he said. “We continue to have a spread of possible reduction ranges from $57 million, or 8.5 percent, to $209 million, or 31.5 percent.”

    Bruce Rosenstock, CFA member and associate professor in religion, said the University should be more concerned about the possibility of major cutbacks rather than the budget stand-off.

    “In the past such cutbacks were more than paid for by tuition increases and higher admission rates for out-of-state students,” Rosenstock said.

    In the meantime he said keeping in-state tuition steady is crucial.

    Knorr said he expects the remaining $49 million from fiscal year 2015 to be paid out by the end of September. He also said the University was able to make payroll with the resources on hand for August, and he expects it will be able to do the same for September.

    According to the report, the University’s Endowment and Operating Assets currently totals $2.82 billion. The report states 59.1 percent of the money is invested in fixed income and 19.6 percent is in cash equivalents. The remaining 21.3 percent is invested in a variety of assests including global equity, U.S. equity and endowment farms. Additionally, the total endowment fund is valued at $725.6 million.

    The CFA said this is typical procedure.

    “It is true the state has not begun appropriation payments to the university for the current fiscal year, which started on July 1,” the report stated. “But that is normal: almost no funds were received from the state through August in each of the years 2012, 2013, and 2014.”

    Knorr however had a different view about the lack of a state budget.

    “This is a year of continuing challenges,” Knorr said. “This is the first time since 2007 we’ve had a rescission — a rescission of $18.4 million in fiscal year 2015.”

    He also said the state has not accepted the University’s bills for fiscal year 2016 and it will not until the appropriation is set; the appropriations could be decided as late as November.

    “The prospects are looking very dim for the budget situation to be resolved soon,” Knorr said. “We are probably not going to be in a position to present a budget in November.”

    Additionally, he said there are $114 million in unpaid fiscal year 2015 state vouchers. This $114 million will come out of the state appropriation for fiscal year 2016 once it is finally set. Knorr said the University would continue to operate on its current appropriation until further notice.

    “Bottom line: despite all the talk in Springfield, nothing is different this year so far, in terms of state dollars received,” the report said.

    [email protected]