Miami to make institution-wide budget cuts and reallocations

For the first time since the aftermath of the 2008 recession, Miami University is cutting funding for certain academic programs, administrative overhead, athletic programs, building operations and services related to student life on campus. The academic funding will be reallocated to "high priority programs." These cuts will be implemented across all university divisions and campuses for the next five years.

University President Gregory Crawford announced in a public letter to the Miami community on Feb. 7 that divisional leaders were to develop a five-year plan starting in the 2019-2020 fiscal year that would result in a 1.5 percent annual cut for administrative divisions including the President's Office, a 2 percent annual cut for auxiliary operations including Intercollegiate Athletics and a 1 percent annual reallocation in each academic department.

"Miami University is operating from a position of strength compared to most universities," Crawford wrote. "But the reality is clear that our current expenses are growing faster than our revenue; it is not sustainable."

How exactly these cuts and reallocations will change programs and operations within each division is up to the deans, department chairs, divisional vice presidents and managers of each division. Their proposals for how to put the budget plan into action were due Monday, April 1 and will then be subject to review.

The total dollars cut from all administrative and academic units at the end of the five years is estimated to be over $17 million, or about $3.5 million a year.

The minimum amount that will be reallocated among Oxford and regional academic units is estimated to be just over $8.5 million over 5 years, or about $1.7 million a year, according to the university's current budget plan. The President's Office desired amount for academic reallocations is twice that, however.

Other Ohio state universities like Wright State University and the University of Akron have faced financial woes and large deficits in recent years, and Miami is attempting to avoid the same pitfalls.

The last time Miami made budget cuts was in the 2011-2012 fiscal year, with a $10.6 million reduction. This came at the end of a four-year period in which budget cuts were made each year, often by tens of millions.

At that time, the cuts were a result of financial problems brought on by the global recession. Now, although the economy is booming according to most analysts, Miami is facing a new set of problems.

According to the resolution for the five-year budget plan passed by the Board of Trustees at its Feb. 22 meeting, "applications from across the nation and from international students have declined for fall 2019, and this likely is only the first of many enrollment challenges as demographic changes result in fewer high school graduates in parts of the nation where Miami has historically recruited students and interest by international students wanes."

David Creamer, senior vice president for finance and business services and treasurer, said that one of Miami's first priorities is affordability, so one of the purposes of the budget cuts is to keep tuition from rising as well, as it did in the aftermath of the 2008 recession.

"All this is being done to better ensure [that] what we're providing better matches what students expect today and what students will be looking for tomorrow," Creamer said.

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Auxiliary operations, such as athletics, the bus system, building operations and residence life will face the biggest cut in the new budget because they receive funding from other sources, like fees separate from tuition charged to students, and because academics take priority, Creamer said.

Crawford created a Strategic Planning Steering Committee to develop a "long-term Strategic Plan for Miami's future," which will be finalized in June of this year. The university last made a Strategic Plan in 2015, but achieved all of its goals, which included working towards a more creative and inclusive campus environment and cultivating partnerships, before the projected 2020 finish line.

The current budget plan aligns with the new Strategic Plan's goals to fund the university's "most important academic initiatives," to increase need and merit-based scholarships to attract more students and to attract and retain "high-quality" faculty and staff.

The money swept back by the cuts to administrative and auxiliary divisions will be repurposed mainly for recruitment, scholarships and aid. The reallocated funds from academic divisions will be used within other academic areas that have been deemed a higher priority to the university's recruitment efforts.

"We want to take funding we have and invest in academics where we have the highest demand," said Phyllis Callahan, provost and executive vice president for academic affairs.

Although which academic areas will receive the funding and which will be most affected is not yet determined, Callahan said she believes that the university, as a whole, is in need of a curriculum review. This would change the functioning of many academic programs and the way the curriculum is taught.

Crawford wrote in his letter that the budget reductions will likely not result in immediate layoffs, but alluded to the possibility that positions will be cut in the next five years.

"As future plans develop, some areas will grow with new investments to advance Miami's strategic initiatives, while others may require fewer positions," he wrote.

Another part of Miami's plans for the future is the Boldly Creative Strategic Academic Enrichment Initiative, a $50 million dollar investment in new faculty-developed programs. Pilot programs in three focus areas have already been approved: data analytics, nursing and professional master's programs or professionally-oriented certificates.

Nine additional full proposals for Boldly Creative have also been submitted, Callahan said, and there will be another round or two of pre-proposals in the next year. The Boldly Creative initiative is meant to attract more students to the new programs, thus increasing revenue while decreasing recruitment costs.

The proposals were solicited from faculty and staff across the university divisions.

The funds for this initiative came mainly from money put aside by the vice presidents of each division, Callahan said, and some funding could come from the reallocations if needed.

arwinejk@miamioh.edu