Forum offers view of BGSU financial picture

“Where does the money go?” was the theme of Chief Financial Officer Sheri Stoll’s well-attended April 8 forum, sponsored jointly by the Faculty Senate and Provost Shirley Baugher. And different facets of that subject topped the list of concerns of most faculty and staff who posed questions.

Stoll explained that the answer to this simple question actually is quite complex, since the University’s current financial situation stems from a host of past responses to factors in its operating environment. Both Stoll and Baugher emphasized that our critical task now is to collectively determine where the University wants to be in the future and to direct our resources and planning toward that end.

Both speakers stressed that there are no “right answers” for improving BGSU’s financial picture and that the best thinking about future-oriented priorities and options will flow from the campus as a whole, starting with the college compacts developed last fall and the exploratory and planning processes set into motion at the beginning of this semester.

Stoll gave a six-year overview of various aspects of the budget situation, drawing most of her figures from main campus but noting that “BGSU Firelands is trending similarly.” She also provided comparisons with the other three of the “four corner schools”—Kent State, Ohio University and Miami University. While these sister institutions share a common overall mandate with BGSU, as part of the new University System of Ohio, none is an exact match in terms of mission, priorities, strategies to address new state mandates or resources to meet the new challenges.

The crux of BGSU’s financial challenge is the need to compensate for rising costs in virtually every aspect of its operations—from health benefits to utilities and the drain on resources of maintaining legacy buildings and making them an effective component of today’s teaching and learning. As Stoll explained, this task is made more challenging by two-year limits on increases in tuition and fees, an important part of BGSU’s revenue stream, and by last year’s enrollment decline that decreased tuition revenues. An increase in the University’s enrollment-based state share of instruction monies was not sufficient to balance the budget. The coming year’s expectation of a stable enrollment will help but is not enough to eliminate budget problems, she said.

Enrollment is critical
Under the new University System of Ohio funding model, state support will likely shift from funding only enrollment numbers to funding quality outcomes, such as favorable retention and graduation rates. “Enrollment will remain important, as tuition still provides approximately 70 percent of the University’s revenue stream,” Baugher said. She also noted that the University has seen a drop in the “yield” rate of admitted students choosing BGSU and that the retention rate is down, as are five- and six-year graduation rates. As of April 8, the University was down 147 freshmen from this time last year, based on housing deposits. All of these issues negatively affect its ability to address revenue challenges.

Since the pool of students is smaller than before, the Provost’s Office is bringing in an enrollment management consulting team on Tuesday (April 15) to conduct an environmental scan and make recommendations tailored to BGSU’s circumstances.

Stoll gratefully acknowledged faculty and staff contributions to helping the University attain better financial stability. Pointing out that a 30 percent increase in general fee revenue between 2002 and 2007—covering everything from athletics to health services and the student union—was not enough to keep up with rising expenses, she said, “So if you are in an auxiliary service unit that receives significant support from general fees, you’ve had a tremendous challenge to make ends meet with only modest increases in funding.”

Stoll showed that a “sizable chunk” of the state Success Challenge money is going to administrative support positions, and not exclusively to faculty salaries. The University has finished paying off the STRS liability it incurred through the faculty early-retirement incentive program in place through the 1990s, she said. That move freed up money for faculty lines but cost about $34 million in retirement payments—a decision based on needs at the time, Stoll said. She commented that total salaries and benefits are expected to comprise 60 percent of all budgeted revenue for 2008.

Another 20 percent of the budget will go for scholarships and fee waivers. Student financial aid at BGSU has risen dramatically over the last five years, with the biggest increases in aid for undergraduates and international students. A priority in the governor’s plan to extend accessibility of higher education to all Ohio citizens, increases in this budget item complicate strategies for eliminating the gap between University obligations and the amount of resources it has to meet them. “That only leaves 20 percent for everything else, such as utilities, equipment, office supplies and other costs of operation,” she said.

Strengthening faculty
Baugher disclosed that “there have been 67 retirements and resignations this year among tenure-track faculty” and noted “the University will spend about $11 million on new or replacement faculty salaries this year.”

She also commented on the finding that spending for non-tenure-track positions currently exceeds funds committed to tenured faculty positions, stating that we need to explore “what this means for planning and quality indicators.” Upon learning of the disparity, Baugher recommended using the remaining $1 million originally committed to early-retirement funds to pay for 10 new, full-time tenure-track positions this fall as an initial strategy for moving toward institutional quality.

She also promised that “more informal talks will be scheduled to address this and other issues in the coming months.”

Watch forum online
To view the entire forum, which also comprised such issues as the chancellor’s plan to increase enrollment at state universities and renovation and maintenance of campus facilities, visit

To see all the PowerPoint charts provided at the forum, visit

April 14, 2008