State money to public colleges to be deferred next month

Missouri's public colleges learned Friday that they would receive no operation money from the state next month.

The Missouri Coordinating Board for Higher Education sent an e-mail with the news to officials at all two- and four-year institutions late Friday afternoon.

The governor's decision to freeze state funding was not a complete shock, said Southeast Missouri State University president Ken Dobbins. Dobbins said

Coordinating Board officials had last told him six or seven months ago to prepare for the possibility of a shortfall.

He said the university has been keeping investments short so the school will be able to meet payroll and other obligations.

May's deferral amounts to about $3.75 million at Southeast. Dobbins said he wouldn't be surprised if June's money from the state is also delayed until the next fiscal year, which begins in July.

Across the state, Missouri Western State College President James Scanlon said, "We were alerted early in this budget year that the state may have a cash-flow problem in May. We're not surprised. But we weren't sure of the dimension."

'Definitely a fear factor'

Others weren't as prepared for the announcement, which interrupted a Board of Regents meeting at Northwest Missouri State. The news was not well received, considering there already was a discussion underway about state budget cuts.

"I feel like the messenger who ought to be shot," said Ray Courter, vice president of finances. "I'm not here to panic us, but there's definitely a fear factor."

Northwest President Dean Hubbard said he assumed the problem was behind them because the potential cut hadn't been mentioned since November.

"I'm surprised by this, but we made sure that we have reserves to at least absorb the shock," he said.

But even though officials in Maryville aren't rushing to the bank, they still say the decision hurts and the university will have to make up for the $2.1 million shortfall.

"We don't have to borrow, but we have to dip into the cash flow we've brought up and forego interest," Hubbard said. "So it's a cut at the minimum."

Hubbard said he assumed the state's intent was to balance this year's budget and hoped the money would be released to his college in July. But Northwest Regents president Jim Johnson is not so sure.

"I fear they might not give the money back," he said. "That would wipe out our reserves."