MU tuition, funding increases both exceed inflation rate

The University of Missouri-Columbia has raised tuition for the 2007-08 school year at a rate higher than the inflation rate for at least the eighth consecutive academic year. But this could be the last time that happens.

A tuition cap tied to inflation will go into effect among for Missouri universities for the 2008-2009 academic year. University administrators expressed concerned that the tuition restriction could put a financial stranglehold on MU unless state funding increases at least exceed the inflation rate. But if the funding level for 2007-08 continues, that concern could be allayed.

“If the state supports us at a level in excess of inflation, the tuition cap will matter less,” said Cuba Plain, University of Missouri System vice president for budget planning and development. “But if they don’t, it matters a lot.”

Simply maintaining the status quo will not ensure that the university will thrive in a competitive market, she added. “If they just support us at the rate of inflation, there’s no room for innovation and new programs,” Plain said.

Gov. Matt Blunt signed a bill in May that limits increases in university tuition to the rate of inflation unless a waiver is granted by the Missouri Coordinating Board of Higher Education. If a university raises tuition without a waiver, the university will be fined 5 percent of the year’s total state appropriations.

Gary Nodler, vice chairman of the Senate Appropriations Committee and the bill’s sponsor, said the legislation was a response to his constituents’ concerns about rising tuition costs. The Republican from Joplin said they appear to want more oversight, which his bill will provide.

At MU, tuition has been increasing faster than inflation and personal income for the past 7 years, according to a 2006 audit by then-Missouri State Auditor Claire McCaskill.

For the winter semester, MU will charge $8,170 in combined tuition and fees for an average undergraduate course load, up 5.2 percent from last year. In June, the Consumer Price Index was calculated at 2.7 percent.

Plain said that tuition hikes have been the university’s response to falling and plateaued state appropriations for higher education and rising enrollment.

“We have a lot more students and less state money,” Plain said. “What that means is that you have to really cut the expenditures that have on impact on the quality of what you’re providing, or you have to charge more because it’s really a zero sum game.”

This year, the state appropriated the university $413 million for 2007, $29 million less than state appropriations in 2001 but $11 million more than 2006 appropriations.

Nodler said that the Coordinating Board for Higher Education is specifically mandated to consider the rate of state appropriations when debating waivers.

He said if universities feel a need to charge more tuition, they can, so the legislation doesn’t actually create a set, impermeable tuition cap.

“Under the bill, institutions can do whatever they want with tuition,” Nodler said, “but to get their full state appropriations, they won’t raise it above the rate of inflation without the Coordinating Board’s support.”

Plain said, “While it’s not technically a cap, for practical purposes, it is.” She also said university administrators “only raise tuition to offset marginal expenses that cannot be funded from other sources.”

Even with a more efficient operation, the university could face a grim future if state appropriations do not compensate for restraints on tuition. Inability to pay staff and faculty competive salaries could mean the loss of “the best and brightest” educators and administrators, Plain said. Loss of quality faculty could cause a blow to the university’s reputation and a slump in enrollment.

Though extra money is tight, the university hopes to pay teaching faculty more. The university has launched a 3-year financial plan called Compete Missouri to attract and retain faculty.

The average professor at the University of Missouri is paid $68,600, almost $6,000 less than the national average for similar institutions, according to the Association of American University Professors, a group of the nation’s most prestigious public and private research institutions.

The effort to retain faculty comes amid growing concerns about high-level departures. University of Missouri System President Elson Floyd left in February, and John Gardner, the UM System’s vice president for research and economic development, left in June. Both went to Washington State University. Jim Coleman, vice chancellor for research at MU, will take a job as vice provost of research at Rice University in Houston, Texas, next month. Less than a month ago, Steve Lehmkuhle, senior vice president for academic affairs at MU, said he will take a job as the first chancellor at the University of Minnesota-Rochester.

Quality employees are at the heart of the university’s success, but they’re also at the heart of the institution’s financial worries.

“The university is a very people-driven organization,” Plain said. “Seventy-five percent [of the operating fund] is spent for people.”

With so much of the University’s operating budget devoted to people, it’s the people who are affected by cuts.

“Maybe class sizes have gone up and there aren’t as many [class] sections on some campuses. Lines are longer at financial aid and some of the student services,” Plain said. “On the administrative side, travel reimbursements take longer and administrative support for faculty has declined.”

Plain said that when the budget has been tight, the university has attempted to reduce cost and increase efficiency.

For example, proposals for making Compete Missouri possible include library consolidation, elimination of some centers and a new strategy that will pay for essential faculty positions with money from open positions that will not be filled, MU Provost Brian Foster said.