MSU plans for flat state funding as it builds fiscal ’27 budget

Richard “Biff” Williams: Budget planning for FY27 has started.

Missouri State University officials said developing a budget for the upcoming fiscal year is anything but easy.

The campus is facing a two-pronged challenge: Revenue from the state and student tuition is expected to be relatively flat while expenses, including the annual payment for employees’ retirement plan, are going up.

“It’s that time of year,” said MSU President Richard “Biff” Williams. “We’re starting to prepare our preliminary budgeting of 2027.”

At MSU Board of Governors meetings Feb. 19-20, university officials offered an enrollment update, discussed items expected to squeeze next year’s budget and provided a history of tuition, fee and staff pay increases.

Williams said cabinet, university council and the executive budget committee have started meeting. He said they are looking at revenue and spending options and started exploring options with faculty, staff and administrators.

“We’ll talk about what are the greatest needs across our campus. We’ll highlight those, and we’ll come up with an idea of what it is we think we can fund, what ideas we have for tuition increases and fee increases,” Williams told the board Feb. 19. “And that’s how we’ll make a proposal to all of you.”

MSU appropriated $114 million for operation in the current fiscal year.

Williams said 38% of the operating budget is state funding, 3% is grants and gifts, and 59% is tuition and fees, so enrollment projections are critical.

Dawn Medley, vice president for enrollment management, said the student mix makes a difference.

Students enrolled in dual credit courses, where they can earn high school and college credit at the same time, pay significantly less than full-time, degree-seeking students.

Medley said overall student headcount has been climbing – driven in large part by dual credit students – but the number of degree-seeking students has not rebounded to prepandemic levels.

The number of degree-seeking undergraduate students was 12,250 in the fall and 11,974 in the spring.

“For those of you familiar with enrollment management, spring is not typically a time when we hang our hat and say ‘Look at what we did,’” Medley said. “Not a lot of students think about jumping into college in January.”

The university has also been experiencing a slow decline in graduate students.

Medley said potential graduate students are looking for a return on investment, or if a graduate degree will result in career advancement and higher pay.

She said the university is looking at ways to recruit more degree-seeking students.

This spring, the board will be asked to set tuition and fee levels for the next year. To lay the groundwork, officials compared the cost level for undergraduate students who live in Missouri.

A typical MSU student currently pays $302 a credit hour and $836 in fees, an average annual cost of $10,732. MSU’s average annual cost for tuition and fees is lower than the University of Missouri campuses, which vary between $14,038 and $15,870 a year, and Northwest Missouri State University.

Among the 13 public four-year institutions in Missouri, MSU was ranked No. 6 for annual in-state, undergraduate student cost, according to a report from MSU.

Matt Morris, vice president for administration and finance, said even though MSU increased tuition by 4% for this current year, the ranking did not change because other institutions approved similar increases.

He said any conversation about increasing employee pay will have to factor in a higher employer contribution payment for the Missouri State Employee’s Retirement System. The amount MSU pays annually is expected to go up by $2.2 million.

“Whatever tuition [amount] is chosen, before you even consider compensation and other factors, we certainly have to take this into account, just the increased cost of doing business,” Morris said.

Morris said MSU officials have been communicating with MOSERS about the hardship the higher annual payment will create. He said the benefit is important, but it comes at a high cost.

“We are trying to advocate for MOSERS relief any chance we can get,” he said.

Williams described the higher MOSERS payment an “unfunded mandate from the state” and noted the cost is going up at a time when state funding is expected to be flat, according to the budget proposed by Gov. Mike Kehoe.