EMU's budget shortfall could grow to $6M, regents told

The reasons include the enrollment decrease and a drop in investment income.

"The challenges we face are really twofold: The enrollment shortfall is one, the second one, which is way too early to draw any conclusion on, is the investment income,” Lumm said. “Investment income is tracking down year to year. The markets are down.”

Board of Regents Chairman Roy Wilbanks asked Lumm to present a plan on how the university plans to deal with the shortfall.

“Obviously this is a pretty discouraging report,”Wilbanks said. “If this track continues, the board is going to have to give some type of budget amendment.”

Lumm said EMU’s financial department already is looking to craft spending adjustments that it will bring to the Board of Regents by December.

He said this year’s budget shortfall is “more challenging” than the $3 million shortfall EMU experienced last year.

To accommodate the shortfall, Lumm said the university will have to carefully manage expenses and make strategic cuts. He said that layoffs would be a "last resort."

In June, 81 positions were cut, for a savings of $4.24 million in salaries.

Also affecting EMU's $281.4M operating budget is a drop in grants: they're down by $800,000 from this time last year.

The budget shortfall and enrollment decrease comes after EMU received a record number of applications last year.

EMU received more than 12,600 applications for the 2011-2012 academic year, a 24 percent increase from the year before.

However, the number of students enrolled in classes at EMU this year is 23,341, a 0.07 percent decrease from last year. The number of credit hours decreased by 1.4 percent this year.

While overall enrollment has decreased at EMU, the freshman class is 6 percent larger than last year’s

B.J. Selfridge, coordinator of EMU’s admissions visit programs, reported that university representatives attended more than 600 high schools and 250 college information sessions last year.

Selfridge said that as EMU pushes to increase enrollment, the university continues to focus “within the Midwest.”

Altough overall enrollment at EMU has decreased, this year’s freshman class grew by 6 percent, increasing from 2008 students last year to 2,130 students this year.

The number of students participating in student housing has also grown, rising 5.7 percent from last year.

“Overall, having this many more student on campus, you can really see the difference,” EMU Vice President for Student Affairs Bernice Lindke said. “When you look at the buildings and you look at the grounds, and you see the students who were at orientation, there’s just a different feel this year and you can really tell.”

Students entering EMU this year are academically stronger than last year.

“Our academic profile has improved,” EMU President Susan Martin said during the regents meeting.

The average GPA rose to 3.10 percent this year from 3.06 percent last year. The amount of students entering EMU with a GPA above 3.5 increased by 16 percent this year.

Lumm also said that fundraising for the 2011-2012 fiscal year, which began in July, has already surpassed last year’s levels. EMU’s current $5.7 million fundraising total is largely because of two large donations, Lumm said.

“Fundraising is quite a positive story,” Lumm said. “We have an aggressive goal. We raised $5.1 million last year, our goal for this year is $9.5 million.”

Kellie Woodhouse covers higher education for AnnArbor.com. Reach her at kelliewoodhouse@annarbor.com or 734-623-4602 and follow her on twitter.