Provost discusses budget conerns in university forum

Provost Stearns (Photo courtesy of John Irwin)

On September 10^th, Provost Peter Stearns and Fiscal Services Controller Beth Brock held a forum to discuss recent budget concerns with the GMU community.

“We do mean to do [the forums] periodically,” Stearns told a packed room of administration and faculty in Mason Hall. “The main point is to show where budget issues are.” The forum was broadcasted live to both the Arlington and Prince William campuses.

A significant part of the Stearns presentation included a review of the General Fund for Mason. The fund includes money that is given to the university from the Commonwealth of Virginia.

In FY 1991, the General Fund accounted for 61.8 percent of the revenue that Mason received to finance primary academic costs, otherwise known as education and general costs. Over the past two decades, the General Fund has fallen to make up 25 percent of the E&G budget in FY 2013.

“We don’t really expect to start reversing the trend even if the economic times improve,” said Stearns. “So this is a significant change.”

Education and general costs encompass over 50 percent of total university costs and include all academic-related items. In previous years, the General Fund primarily financed these costs, but as the state has reduced its payments to the university, raising tuition has covered costs.

“…In order to maintain or increase per student E&G expenditures, tuition charges have increased at rates beyond normal cost inflation,” reads an executive summary of the FY 2013 budget.

This year, tuition for in-state students has risen 3.5 percent while out-of-state tuition has risen 3.7 percent.

The largest increases in the budget are being directed to capital outlays and auxiliary enterprises. Capital outlays include all investments made in construction and renovations. Capital outlay expenses have risen 12.9 percent from FY 2012. Expenses for auxiliary enterprises, which include university departments and contracted departments, are the second-largest expense for the university, and rose 9 percent from FY 2012.

“We have started to shift our focus to the operating part of the house,” said Brock. “That kind of boom is starting to come back.”

Mason’s largest revenue source remains as student tuition, but the administration is hoping to diversify its revenue sources.

“We are all going to be looking to increase the percentage of private support,” said Stearns. 

In an effort to address the budgetary concerns, Stearns said that the university would be changing the way that it approaches its fiscal concerns.

“We have made some changes to our standard formula,” said Stearns. In previous years, Mason has spent roughly 50 percent on both academic and non-academic items, now 60 percent of expenditures will be academic while 40 percent will be allocated to non-academic costs. 

“This does mean new kinds of constraints,” said Stearns. “It means we need to be alert to possible revenue sources,”

At the end of the forum, Stearns told the audience that he hopes to continue holding regular budget meetings and to keep constant communication with the Mason community about the state of the university.

“We want to be sure as we discuss next years budget and budgets for the future,” said Stearns. “We want to be as sure as we can be that an atmosphere of common enterprises continues at George Mason University.”