Pacheco- Lost state money could devastate university

FORT LEONARD WOOD, Mo. -- University of Missouri president Manuel Pacheco, responding to Gov. Bob Holden's decision to withhold state money from higher education, told curators Friday that they likely will be asked to raise tuition for the second time since March.

Pacheco, who called the withholding "devastating" to the university system, said the university would have to cut payroll and services -- even with his proposed additional increase of 4 to 5 percent in tuition and educational fees.

"There was some feeling that maybe we should go higher than that for students, but I don't think we can go higher than the proportion of the problem that they represent," Pacheco said.

In March, curators voted to raise tuition and other fees 8.4 percent while dropping plans to give staff and faculty a 4 percent raise.

On Friday, the board also approved a fiscal 2003 operating budget of $838 million. The operating budget consists of unrestricted revenue sources; the university's total budget is about $1.8 billion.

The board took no action on Pacheco's proposals for fee increases and reductions in payroll and services. A special meeting is planned for sometime within the next two weeks, Pacheco said.

Painful measures seen

"There is no question that the university will be forced to adopt painful measures to address this withholding, and nearly all of those measures are likely to have serious consequences for our people and for our students," board president John Mathes said.

Of the $230 million to be cut from the state budget, $82.9 million will come from appropriations to public four-year and two-year schools.

"The withholding essentially wipes out every dollar that the state's colleges and universities were scheduled to receive during the final six weeks of this fiscal year," Pacheco told curators.

"There appears to be little or no hope that these funds will be restored, and therefore the withholding must be viewed as permanent," he added.

The timing of Holden's action causes more problems for the university system, Pacheco said.

"Classes are over for this fiscal year and, therefore, most expenditures associated with our core mission of teaching ... have already been incurred," he said. "Because the options available to us are so limited, we will be forced to borrow against revenues and cost savings that can be generated in fiscal year 2003." University officials are considering several ways to reduce payroll, Pacheco said, including voluntary early retirements, forced furloughs or temporary pay cuts, and layoffs.

The university's hospital system will also be forced to discontinue its heart transplant program, Pacheco said, and divest itself of several clinics around the state.