The recession and anemic recovery have been hard on businesses, homeowners and job seekers, but it's turned out to be a boon for Montana State University. As more young Americans decide to go to college rather than hunt for work in a tough job market, MSU's enrollment has swollen.
Thanks to those students and to the 5 percent tuition hike students are paying this year, MSU expects to start the school year with money in the bank.
As a result, MSU President Waded Cruzado just announced that she plans to ask the Montana Board of Regents in September to approve pay raises of 1 percent plus $500 this October and 2 percent plus $500 next October for non-union employees, which would be similar to raises negotiated over the summer with union groups.
"It's great news, hopefully, that we can give a little something to our employees," said Terry Leist, MSU's interim vice president for finance. "We're hopeful the regents will approve it."
Despite the loss of nearly $3 million in state dollars this year, there was no gloomy talk of layoffs or budget cuts, no wringing of hands by Budget Council members. Instead, there was talk of having $1.2 million left over as a cushion in case revenues fall short.
There was talk of possibly spending some of the millions from a $7 million rainy day reserve fund to upgrade century-old buildings that still aren't handicapped accessible, to give old classrooms desperately needed renovations and to improve student advising.
The budget shows that by far the biggest share of MSU's money comes from students. MSU has conservatively estimated it will receive $84 million in tuition this year. That's $4 million more than MSU took in last year. And last year was remarkable, for the Bozeman campus ended up getting $5 million more in tuition than expected before fall classes started.
To accommodate the crush of students, the draft budget calls for spending $3 million this year to add class sections, hire additional teachers, increase support services and offer $500,000 more in scholarships to Montana students. "Three-quarters (of the tuition increase) is going directly back to students," Leist said.
Super-big enrollment
So far it looks like MSU's 2011 fall enrollment may be as strong or possibly stronger than last fall, when it hit a record 13,559 students, said Allen Yarnell, vice president for student success. He's a little reluctant to talk about it, for fear of jinxing things.
"If I were guessing, I think we'd have an all-time university high," Yarnell said, and possibly match last year's "super big" freshman class. That, plus the 5 percent tuition hike approved by the regents, "gives you an additional boost in revenues."
Yarnell said he never attributed all of the enrollment increase to the economic downturn. Yes, he said, the economy probably affects Montana high school graduates, who might have just entered the workforce if jobs were more plentiful. But MSU also has been working hard to recruit students, including out-of-state students, whose families can afford higher out-of-state tuition.
The irony of MSU having money to spend is that it can make people more unhappy than when there's scarcity. There's never a shortage of great ideas for spending money on a university campus, and there's never enough to satisfy everyone's desires.
"Sometimes when you have money," Yarnell said, "it's perhaps more challenging than when you don't."
Sunny outlook
Bright and early Wednesday morning, MSU President Waded Cruzado was greeting new students moving into South Hedges dormitory. She chatted with families and helped carry one freshman's clothes and cowboy boots. She beamed about the picture-perfect weather.
Asked about the sunny outlook for MSU's finances, Cruzado said, "We have been very judicious about how we manage our resources.
"What we are trying to do internally is be a more efficient institution, to streamline, eliminate redundancies and costs, so money can be invested in our students, our faculty, our staff," Cruzado said. "We are poised to continue to strengthen this institution."
Donors and alumni who have given generously are also "absolutely key" to MSU, she said, because they support important programs, student scholarships and professorships that help the university hire and keep "extraordinary faculty."
Leist agreed MSU's outlook for the year is bright, but also expressed concern there could be clouds on the horizon. What if, over the long term, MSU isn't able to sustain huge student enrollments?
"If the economy gets better, if construction jobs are available, that's a tough decision for an 18-year-old," Leist said. That's why the campus has been cautious about committing dollars to the permanent budget, preferring to give departments one-time-only money the last three or four years. This year, that's starting to change for the first time, he said.
Montana students supported last May the plan to raise tuition 5 percent both this year and next year, Leist said, because they wanted to ensure the university programs maintain their quality. Compared to many other states, Montana's tuition increases were relatively low.
"Our salaries are about 70 percent of peer institutions," Leist said. "There's a lot of work to be done for us to be competitive with salaries. "Even in this bad economy, for us to recruit faculty from around the country is extremely difficult, for any position that needs a national or regional search."
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