JACKSON, MS – Following months of careful review of the financial issues at Jackson State University, interim President Rod Paige announced Tuesday (May 30) the completion of a comprehensive Budget Reduction and Recovery Plan designed to improve efficiencies and move the university toward fiscal stability.
According to the university, the plan includes implementing a hiring freeze, suspending all internally funded travel, eliminating all unfilled positions, reducing spending on commodities, discounting several terminable contracts, resizing satellite campuses, and academic and administrative restructuring. Further, to achieve the necessary cost-cutting goals, the university is implementing a reduction in force that will bring the FY2018 budget in balance and allow the university to focus on rebuilding depleted cash reserves.
“We did everything possible to avoid implementing a reduction in force. However, due to an additional $4 million in cuts to our state appropriation in FY2017 – and $1.8 million in additional cuts projected – it became inescapable,” Paige said.
Forty-two filled positions have been recommended for elimination through this process, affected employees will receive a 30-day notice. These included positions reduced due to the restructuring of academic administrative units, resulting in the elimination of one dean, seven department chairs and one program coordinator. No faculty was included in the reduction. The total cost savings from reductions are an approximate $2 million.
The earlier elimination of 65 vacant positions, including faculty and staff who retired or resigned, equate to more than $4 million in savings, bringing the total reduction in payroll costs to $6 million.
“I know these are tough changes, but they will leave the university in a much stronger position financially and will increase the efficiency of the institution,” said Paige.
According to The Clarion-Ledger, Paige stated after his appointment that his goal was to gain handle on the school’s financial situation to see the problem areas.
Paige hired Marvell Turner, a retired JSU administrator, as interim vice president and chief financial officer in February to try to get a handle on JSU’s financial situation.
Paige, 83, a former U.S. secretary of education, graduated from Jackson State University and is also a former JSU football coach. He helped implement the national No Child Left Behind program when he was education secretary from 2001-2005, during the President George W. Bush administration.
The university solicited input from a board representation of the campus community to develop efficiency measures and make recommendations that are included in the Budget Reduction and Recovery Plan. Five campus advisory groups, called Advanced Development Groups, were established to study and recommend efficiency measures in academics, business and finance, enrollment management and administration.
As previously acknowledged, continued expenditures from a budget based on unrealized revenue projections and reduced the university’s cash reserves over the past five years by 89 percent, dwindling from $37 million in FY 2012 to 4.2 million in FY 2016. The primary factors contributing to the shortfall were increased debt payments and an increase in scholarships given, among others. With dwindling state and federal aid, the university took the necessary steps to support its student through increased investment in student aid, which contributed to the budget shortfall. Ongoing factors have caused further utilization of cash reserves to meet expenditures.
The actions taken to reduce the FY2017 budget and operating activities have had a dramatic impact on the university, and the recommendations for reductions to the FY2018 budget are painful but necessary.
With regards to the total operation, the university has incurred operating losses from 2013 to 2017 averaging approximately $12 million per year. Significant cost-cutting measures implemented in the last half of FY2017 will help minimize this trend; however, it will take several years to reverse the impact of $48 million in losses incurred in the prior four years.
As the university moves forward to address these financial issues, the foremost consideration is that our students continue to receive a first-class education and a degree that is valued in the global marketplace. Administration, faculty and staff are committed to meeting these expectations and ensuring the academic programs and educational opportunities remain at a high level. This is demonstrated by the fact that, while overall spending is down, the percentage of funds dedicated to academic spending is up.
Long-term goals for the university include crafting a strong plan to include higher fiscal performance, developing a plan to diversify revenue streams and address capital needs and implementing an enrollment plan that aligns JSU faculty-student ratio and average cost per student to peer institutions. Additionally, implementing an integrated budget and account system with a strong reporting function and launching a capital campaign to support the strategic plan are included in the Budget Reduction and Recovery Plan.
Click here to view JSU’s Budget Reduction and Recovery Plan.