Western set for record earnings
By Matthew Hunt
December 12, 2012
Missouri Western is set to have another record-breaking profit of more than $3 million this year, and that is before the $1.5 million coming from the Student Success Act fees.
Despite high earnings over the last three years and cash reserves at a 10-year high, President Dr. Robert Vartabedian remains “cautiously optimistic.” When addressing the administration, faculty and staff earlier this semester, he used those words when discussing Western’s financial position.
“We have weathered a financial storm,” Vartabedian said last August. “When I made that speech at the beginning of the year, I was anticipating the tobacco tax revenue. So, all of a sudden now there’s $2.1 million out of the equation.”
It’s true that we do not have the tobacco tax to increase Western’s revenue. The budget for this year is almost exactly the same as last. If nothing changes we are set to profit as much as last year and we can add the Student Success Act fees on top for a total of $4.5 million.
Earlier this semester the interim Vice President of Financial Planning Rick Gilmore said that the additional revenue above the budget came from the severe cuts in the budget. Those cuts still exist because the budget is nearly the same as last year.
The 2011-12 budget compared to the 2012-13 shows only a $2,289-increase in student fees. Evidently the Board of Directors believes enrollment may go down to the point that the Student Success Act fee won’t increase funds that much. Numerically there would only have to be a reduction of 365 students to absorb the entire Student Success Act fee. That would be a drop in enrollment of 6 percent.
They do however plan to cut the use of reserve cash by $300,000 between the 2012 and 2013 budget, which leaves reserves at $7.9 million. That is still a 10-year high. “Reserves should not be used for ongoing expenses, but instead for one time purchases, improvements, etc,” Board of Governors Chair Kylee Strough said.
Those one-time expenses could be new buildings, differed maintenance and improvements of buildings and grounds. But, there could be no more employees to maintain the additions because the salaries would be an ongoing expense.
That has been Western’s history. Western has added many buildings in the last several years with no additional staff to maintain and clean those new improvements. Many departments have had to deal with less trash pickup and cleaning of offices and classrooms. Maintenance request are sometimes put off until they reach the level of safety hazards.
Overall the budget is increased about $220,000 with an expected increase in state appropriations of $500,000 for the next year. There is no increase in the budget reflecting the $2.1 million that would have been in additional revenue if the tobacco tax had passed.