Budget cuts push SEMO toward layoffs

Saturday, May 11, 2002

JEFFERSON CITY, Mo. -- Southeast Missouri State University will almost certainly raise tuition for the fall semester and employee layoffs will at least be on the table for discussion in the wake of another $4 million cut in state funding.

Board of Regents President Don Dickerson said every university expenditure will have to be reviewed and every source of new revenue contemplated.

"We are going to have to consider layoffs, there are no two ways about it," Dickerson said.

Because Missourians paid less than expected in income taxes last month, the state budget for the fiscal year ending June 30 was $230 million in the red. Gov. Bob Holden planned to make $110 million in cuts on his own, but wanted lawmakers to authorize him to take the remaining $120 million from the state's Rainy Day Fund. The Missouri Constitution requires a balanced budget.

Thursday night, all but seven House Republicans joined majority Democrats to try to give the plan the two-thirds vote needed for passage. The GOP-controlled Senate had overwhelmingly endorsed the bill. But the measure failed to get two-thirds.

As a result, Holden on Friday said he would withhold money due to community colleges and public universities for the final two months of the fiscal year, freeze payments to nursing homes and furlough 6,000 state employees. Money due to local public school districts will remain untouched in the latest round of cuts.

The furloughs mean affected workers will each lose two days of pay during the first two weeks of June. Jackie White, commissioner of the Office of Administration, said division directors and executive managers will be targeted. Many of those in management positions will still be expected to work on the days they won't be paid.

Holden said House Minority Floor Leader Catherine Hanaway and the Republican Caucus forced his hand.

"Keep in mind that everything I'm doing here today is a result of the vote last night," Holden said. "These are Representative Hanaway's cuts."

Hanaway responded that the decisions, which she considered "poor," were Holden's alone.

"He's the governor; governors have to make tough choices," Hanaway said. "I certainly would have chosen to do things differently, but this is what he picked."

Higher education will lose $82.9 million -- about 60 percent of what schools planned to get for the remainder of the fiscal year. Both Holden and Brian Long, the state budget director, said there is little chance of the schools getting the money later.

"There is a slight possibility, if revenues are sufficient at the end of the year, that releases could be made," Long said "It wouldn't be prudent to count on that given the economic environment we're in and the uncertainties facing our revenue streams."

It could have been worse. After the failed Rainy Day Fund vote late Thursday, Holden said the schools might not see a penny of their May and June payments. For Southeast, that would have meant losing more than $7 million.

'Pretty disastrous'

Counting a standard 3 percent budget withholding and earlier cuts Holden made for FY 2002, Southeast will get $8.5 million less than the $50.4 million the General Assembly had appropriated -- a 17 percent reduction. Lawmakers have approved $45.4 million for Southeast for FY 2003, which starts July 1.

"It is a pretty disastrous situation for higher education," Dickerson said. "We have already taken a lot of cuts."

Southeast president Dr. Ken Dobbins said the university would use its own $2.9 million Rainy Day Fund, plus another $1 million it had set aside from its current budget with plans for use in FY 2003.

"We are talking about a crisis," Dobbins said.

Ranking university officials will meet this week to develop a plan for regents to discuss at their June 12 meeting.

Dickerson said there are no details yet as to how much tuition will be increased, how many and what type of employees could be laid off or what other types of programs may be affected.

Dickerson said regents are loath to again increase tuition, but when faced with an unexpected $4 million shortfall, there is little choice.

"We can't load all of that on students, but we have to load some of it," Dickerson said.

State Rep. Jason Crowell, R-Cape Girardeau, said the governor hasn't kept his word that education is his top priority and that Holden should have consulted with lawmakers before making cuts.

"He is playing hostage politics, and it is the worst form of state government," Crowell said. "He doesn't have to do this today. We can sit down over the weekend, next week or the week after that and talk, but he has chosen not to."

State Rep. Pat Naeger, R-Perryville, said he has no regrets about his vote against using the state's savings, despite the impact on Southeast and other services.

"The governor is using these kinds of things to scare our constituencies and force us to do the wrong thing," Naeger said. "We have stood pretty firm on not using the Rainy Day Fund to help bail out excessive spending and big government."

Senate President Pro Tem Peter Kinder, R-Cape Girardeau, backed the Rainy Day plan in the Senate. He said he wasn't upset with House Republicans for not following the upper chamber's lead.

"Reasonable people can disagree," Kinder said. "We have another week to try to work something out."

The legislature adjourns for the year at 6 p.m. Friday.


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