Hammond reports on budget outlook

Assembled faculty and staff learn that FHSU will subsidize health insurance costs

HAYS, Kan. -- Despite the current economic slump that he predicted would continue through Fiscal Year 2012, President Edward H. Hammond delivered good news to Fort Hays State University faculty, staff and student leaders Wednesday afternoon on the budget for Fiscal Year 2011, which begins in July.

FHSU is facing a nearly $2 million shortfall in the FY2011 budget that was passed this week by the Kansas Legislature. The best news for many FHSU employees was that they will receive raises of $500 per employee to soften the increase in their health care premiums. Unfortunately, the university's classified employees -- those who serve in various support roles on campus -- will not receive the Health Insurance Adjustment.

"I can't do that legally for classified employees," President Hammond said. "I wish I could."

The president made his remarks in a special University Open Forum at 4 p.m. Wednesday. The forum was the latest in a series that began in fall 2008 after the national economy collapsed.

"They treated us very, very fair this year," President Hammond said. "We have a lot of legislators we need to thank because there were some tough votes." He mentioned specifically Sen. Janis Lee, Kensington; Sen. Ralph Ostmeyer, Grinnell; Rep. Don Hineman, Dighton; Rep. Dan Johnson, Hays; and Rep. Eber Phelps, Hays. He also praised Gov. Mark Parkinson for protecting both K-12 and higher education and for advocating a combination of cuts and revenue enhancements to deal with the state's financial predicament.

The president repeated his warning, though, that state revenue problems likely will continue beyond the next fiscal year. "I want to make sure you realize it isn't over."

Although classified employees will not receive the Health Insurance Adjustment, the Legislature did approve market adjustments for some employees that were scheduled as part of a multi-year plan. Also, classified staff will receive normal longevity bonuses. FHSU will have to provide the money from elsewhere in its budget because the Legislature did not provide funding for the bonuses.

Ironically, the only cut in pay for FHSU employees was a 5-percent reduction in the salary of President Hammond. That pay cut included all university presidents, judges and a few other state employees who are specifically listed in state statutes. The Legislature had considered a 5-percent cut for all state employees, but that was defeated. Also, the budget that was passed this week bans out-of-state travel, but the details of the ban are not entirely clear at this time.

In summary, the president said FHSU would have to manage almost $1.9 million in adjustments in the coming fiscal year. "That's much less than the $4.3 million we had to manage last year," he said.

The university will generate new revenue of $750,000 by raising tuition 3 percent, will generate another $1.25 million through continued growth and will save $225,000 through efficiencies, such as working four 10-hour days during the weeks of the summer term. Those measures will cover the $1.9 million shortfall and provide funding for three new initiatives: $245,000 for the Health Insurance Adjustment; $100,000 for the expanding Virtual College; and nearly $24,000 to create additional graduate teaching assistant positions.

"This response follows our planning principles," the president said, noting that tuition would remain very affordable, there would be no need for cuts in the operating budgets of individual offices and departments, and there would not be a negative economic impact on the local community.

"Last year we actually grew more than we budgeted, so we were able to add four faculty positions. We had to do that because of our growth," he said. "We continue to ask everyone to do more. Our summer school strategy will continue. Faculty will continue to teach larger classes."

President Hammond concluded his remarks by inviting faculty, staff and students to provide suggestions for other steps the university can take to deal with budget challenges. "Thank you very much for all your help and support," he said.