Roudebush Hall is home to many of Miami's administrative offices, including the Office of Finance and Business Services, which brought the deficit to light. (Paige Sims)
Miami University President David Hodge announced to student senators at last week's Associated Student Government (ASG) meeting that the university is projecting a $7 million budget deficit for the 2007-08 school year.
Richard Norman, senior vice president of finance and business services, said that this is just a projection and the university must come together to discuss the issues surrounding the shortfall.
"This is very preliminary," Norman said. "This is going to take a university discussion (to resolve the issue of the deficit)."
It is not the first time that the university has projected a deficit, according to Norman, but it is still something that should concern the Miami community.
"You should always be concerned (if a budget deficit is projected)," Norman said. "Except for this past year, we have - as long as I know - not had a budget deficit. We would come in very close, but not budget deficit."
Norman said multiple factors could have caused this projection, but a few include student enrollment rates and increasing benefit costs for employees.
"There was an increase in benefit costs, and two years ago, we had a much smaller class than we projected," Norman said.
Hodge said that he thinks part of the projected deficit can be attributed to a loss in state support.
"State support has dropped precipitously," Hodge said, citing a decrease of state funding by 25 percent since 2002, on a per full-time enrollment basis.
Hodge said he still needs to study the budget more before he can comment on specifics.
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"I don't understand how, compared to our peers, we're overspending and underspending," Hodge said.
He hopes to look at both "strategic investments and strategic disinvestments" once he understand the budget.
Student Body President Brian Alexander listened to Hodge's presentation and is trying to establish ASG's role in the situation.
"(Having a deficit is) very frustrating," Alexander said. "I know the deficit situation is pretty serious, but not dire."
Alexander explained that ASG would try to keep the programs at Miami that students cared about through alternative funding, if budget cuts would be needed. He highlighted the Collegiate Readership Program as an example. Alexander saw the problem as stemming from lack of state funds as well.
"Even through Miami's situation is bad, it's a lot worse for (other universities) in Ohio," Alexander said.
According to Hodge, one way the university can decrease the projected deficit is by encouraging donations from alumni. While the national average of donations from alumni on a given year is around 14 percent, Miami is at 16 percent. At the University of Washington, where Hodge is a former dean of the College of Arts and Science, 18 percent of alumni donate.
Hodge said that Miami alumni can and should be able to donate more. He said that some alumni might not donate because they don't think small donations make a difference, but he said that all those small donations add up.
"For a university with passionate, wild, crazy alumni, that's not (the level of donations) where we should be," Hodge said. "People look at the large donations and think 'What's the point of giving $200?' If (all of the alumni) were to give $200 a year, that would be $27 to 28 million a year."
Norman said that since the projections are preliminary, the university still has to discuss what to do in order to avoid the deficit.
"We're going to have a campuswide discussion to make sure we work through this issue," Norman said.
Hodge said that he would address the university budget again in January, the next time he plans on speaking to ASG.
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