Chapter 4
Resources

 

4.2 Financial Resources

SVSU budgets are developed annually, monitored throughout the year, and modified as circumstances warrant. Budget priorities established are consistent with long-term planning objectives set forth in Next Steps 2000-2005 and with the General Institutional Requirements and Criteria identified above. Operating budgets for the General Fund, auxiliary activities, and capital projects are approved by the Board of Control based upon recommendation by the President and his staff. Additionally, the President, through consultation with his executive staff and in compliance with the two union contracts, decides upon other budget issues such as compensation adjustments, staffing levels, program changes, and other matters which impact revenue and spending.

As indicated in Chapter 1 (Figure 1-9), SVSU’s annual General Fund budget of $67 million comes primarily from three sources: state appropriations (42%), tuition and fees (55.2%), and other funding (2.8%). The university must fund 25% of all major state-funded capital projects and 100% of all operational expenses for such projects. Debt service, although a small component of the General Fund operating budget, and operational expenses for new facilities have impacted SVSU’s operating budget significantly in recent years.

State appropriations: Reflecting the trends of the past decade, SVSU, like most state institutions, now is more state-assisted than state-supported, depending more upon tuition for revenue than it does the State of Michigan – a level of support that is not likely to change.

Revenue Sources FY97-04
Revenue Sources
Figure 4-1
(Enlarged Graphic)

As the chart below indicates, state appropriations in the late 1990s through 2001 were adequate to support SVSU’s planned growth. Since then, SVSU (like other institutions in Michigan) has experienced the impact of a poor economy and deficit state budget.

SVSU State Appropriations per FYES: FY98-FY04
(FYES = Fiscal Year Equated Students)
State Appropriations per FYES: FY98-FY04
Figure 4-2
(Enlarged Graphic)

For FY2002-2003, annual state appropriations for all universities were frozen at the prior year’s level and then subsequently reduced by 3.5% midway through the year. Although SVSU’s appropriation for FY2003-2004 increased minimally by .9 of 1% ($26,673), future reductions are highly probable. Because each university is constitutionally autonomous, state appropriations vary widely. SVSU’s current state appropriation, on a per student basis, is less on a per student basis than all but one of its sister Michigan public institutions.

Michigan University Appropriations per FYES FY04
State Appropriations FYES FY04
Figure 4-3
(Enlarged Graphic)

Tuition and Fees: Since 2001, tuition and fees have comprised an ever-increasing proportion of the annual budget. In this climate of tight budgets, the university has maintained three priorities:
1) Protecting vital academic programs and student support services
2) Protecting employment of current faculty and staff
3) Maintaining low tuition rates for students.

Due to previous budget cuts of $1.3 million, SVSU’s Board of Control in Summer 2003 approved a 9.5% tuition increase for FY2003-2004, later reduced to 6.1% (via rebate) as a result of the .9% state appropriation; current undergraduate tuition is $139.60 per credit hour. This tuition increase met the three priorities stated above and was deemed necessary to continue progress towards achieving the Next Steps 2000-2005 goals.

Other funding: The remaining 2.8% of the General Fund budget comes from investment income, indirect cost recovery, and other revenues.

Overall, the General Fund budget is carefully planned to support institutional priorities and sustain fiscal viability. General Fund budget allocations for FY 2003-2004 (percentages are similar to those for previous fiscal years) are shown below:

2003-2004 General Fund Budget Allocations
General Budget Allocations
Figure 4-4
(Enlarged Graphic)