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Terry Sutton is a professor of economics at Southeast Missouri State University. The Cape Girardeau resident has been on the faculty at Southeast since 1972. He is a member of several campus organizations, including Faculty Senate, and the university's Budget Review Committee.

It was with a great deal of interest that I read the headline "Regents will study ways of fixing SEMO budget" in the Aug. 6, 1991 Southeast Missourian. What I hoped to read about was a description of how the Board of Regents would restructure the budgetary decision making process at SEMO to insure that the best decisions would always be made and scarce funds would not be spent wastefully. Alas, the article outlined budgetary cutbacks to cover the latest drop in state funding.

At the risk of sounding like a one issue academic, I would like to examine this issue from the perspective of an economist (I am a professor of economics at SEMO). Most humans are faced with limited money to buy what they desire. In deciding how to spend limited money, the best way to decide is to compare the extra benefits to the extra costs of the expenditure.

If a person always chooses those expenditures where the extra benefits are greater than the extra costs and ranks expenditures so that the one with greatest difference between benefits and costs is funded first; that person will achieve the greatest personal satisfaction possible with the income available.

At the other extreme, consider a person who has an unlimited source of funds for the rest of his/her life. This individual does not have to worry about extra costs.

Donald Trump and state agencies across the nation believed they were in this best of all possible situations in the 1980s and consequently did not pay much attention to extra costs. Unfortunately, Trump's large income and the tax revenues of states did not continue to grow and even fell when a recession occurred in the early 1980s. Now Trump and state agencies are being forced to re-examine previous expenditures to determine if the extra benefits are enough larger than the extra costs to make continued funding worthwhile.

Unfortunately, even though stopping funding of some project or program may be the wisest thing to do, human decision makers do not like to stop funding because it implies that they made a mistake in the first place. Consequently, rather than stopping some expenditures that may no longer make much sense, agencies patch up the existing expenditure system as outlined in the Aug. 6 article mentioned above and wait, hoping that available funds will return to a state of steady increase.

A companion article to the budget one was a plea by the state education commissioner for passage of a tax increase to be voted on in November of this year earmarked for education. If you have read the above paragraphs you can perhaps understand why I am against this tax increase even though I probably would personally benefit from it. I am not completely confident that faculty salaries would increase at SEMO because in a March 6, 1991 article in the university newspaper, The Capaha Arrow, the provost was credited with saying the new funds would be used to "... make numerous ... additions and expansions to existing programs." No mention was made in this article about increasing faculty salaries which are, the last I heard, at the 28th percentile of faculty salaries nationwide.

The low level of faculty salaries at SEMO is essentially the result of using available funds in the 1980s to develop new programs at the university. There are enough funds available to grant faculty and staff salaries that would keep pace with inflation. In an April 4, 1991 article "Faculty ponders budget" in the Southeast Missourian, I was credited with pointing out that during the 1980s, SEMO's total budget increased in real terms (adjusted for inflation) 47 percent.

It is interesting to note that many of the other state regional universities, which obtain state funds from the same source as SEMO, have granted salary increases that have kept up with inflation.

In all these discussions about the budgetary process at SEMO, it is contended by the administration that all sectors of the university work together to come up with the best expenditure of funds. It sounds like an economic analysis of extra benefits and extra costs is conducted every year with input from all parts of the university. This is the way budgetary decisions should be made but this is not the way I see it as actually done at SEMO. My perception is that the major decisions are made by "The Executive Council," consisting of the president, the provost, and the various vice presidents.

In my opinion, what is needed at SEMO is a renaming and perhaps streamlining of the Budget Review Committee. Currently, all this committee does is make recommendations to the Executive Council whose members make the final decision. All factions of the university are represented on the Budget Review Committee and its present size (over 20 members) is probably too large for optimal decision making. If the size of this committee were cut in half and given final budgetary decision making power (renamed as say the Budget Committee) to take to the Board of Regents, I believe budgetary expenditures at SEMO would be much more effective. Furthermore, the faculty, the technical and clerical, and the professional staff groups all need to have one person from each group who is well versed in budgetary matters and who attend all meetings that deal with the budget including Board of Regents meetings.