Good morning and welcome to Eastern Illinois University! My name is David Glassman and I have been serving as Eastern’s 11th sitting president since June 1. I am pleased to have you on our campus on this beautiful fall day. I have come into this position at a crucial time, both for EIU and for the state, and despite the current challenges I am excited for the future of both.
Upon my hiring, the Board of Trustees made it clear the university’s greatest concern and challenge was to reverse its declining enrollment and the subsequent financial challenges that were the result of this decline. Subsequently, I had anticipated focusing my attention during the summer on an integrated enrollment plan and generally getting to know the campus prior to the return of the students in the fall. However, my prioritization shifted dramatically and urgently during only my second week in office after I thoroughly reviewed our 2016 fiscal budget. The budget showed a deficit of around $13 million dollars based on the most optimistic estimate for this year’s state appropriation of a reduction of 6.5 percent on top of the end-of-year additional reduction of 2.25 percent from the FY15 budget. The deficit resulted from the university not matching its expenditures with its annually generated revenue over the past few years. In order to balance the budget, funds were annually drawn down from university reserves. This is not a sustainable business model. There was no alternative but to immediately develop a plan that would move the university toward a balanced budget.
The plan called for right-sizing our university (a term not popular with all, but remains most applicable) by decreasing expenses in all divisions and concurrently developing strategies to increase revenues through advocacy on behalf of our appropriation and from generating higher student enrollments. Although a plan for decreasing expenses can be accomplished more quickly than one for increasing revenues, ultimately our future success will be predicated on being able to stabilize and grow our enrollments while maintaining an appropriately sized employee base necessary to attract, manage and support students and provide our educational mission with excellence.
An extremely difficult piece of this puzzle has been the realization that state appropriations is yet unknown for this year and could be that way well into the year. We were asked to plan, and since then have had to implement, budgets based on appropriation reductions of anywhere from 6.5 percent to 31.5 percent over last year. We have no idea when we may finally receive an appropriation, and we have no guarantee even once an appropriation is approved when we might actually receive the funds.
Not knowing our appropriation severely handicaps our ability to strategically plan for the year and allow us to know the bottom line of our budget. Reductions we have instituted thus far through our expense-reduction plan of layoffs, furloughs, decreasing operating budgets and other measures, have lowered our expenses for FY16 by approximately $10 million. Additional retirements and other employees choosing to depart the university throughout the year will likely save another $1 million. The improved size of our freshman and graduate enrollments this year has increased our revenue estimates by approximately $500 thousand and other revenue–generating strategies will yield another $400 thousand, reducing our budget correction by $12 million. We will continue to seek and implement cost efficiencies throughout the year, but without knowing our state appropriation for this year and other factors, it cannot be competently predicted whether additional employee layoffs will be necessary for us to balance our FY16 budget.
Although we have made some measurable progress, student recruitment will remain a top priority as we move forward. Our Fall 2015 new freshman class grew 2 percent over last year’s and our graduate student enrollment grew by 3.5 percent. Our university continues to receive accolades and validations of our success from outside sources. U.S. News and World Report has again listed EIU highest in ranking of all public, regional comprehensive universities in the state of Illinois and No. 5 among the 12-state Midwest regional public master’s universities. The quality of our students remains strong; we just need more of them. This will call for strategically allocating additional resources to university marketing, branding and recruitment efforts.
The environment of higher education has never been more different, complex and challenging than it is today. And we have already witnessed across the country that maintaining a status quo position is not a viable option for universities. For the sustainability of our university, we must begin today to place our energies and our focus into a revisioned future, with positive attitude and excitement for the opportunities that present themselves.
We must also be amenable to making significant changes in our operations and procedures toward greater levels of efficiency, becoming more flexible and adaptable to respond to a fast-changing external environment, increasing our ability to reallocate resources in a timely manner, and becoming increasingly more innovative in our program development, curriculum scheduling and educational delivery formats. All of these factors are inter-connected and dependent upon one another.
I am extremely confident that a bright future lies ahead of us, filled with opportunity and success. Eastern Illinois University has a great tradition of excellence and meeting its educational mission for the past 120 years. It has always taken pride in its most important resource -- its people -- and has not waned from its focus on student success. EIU has been an excellent partner with the state of Illinois in educating generations of leaders, entrepreneurs, teachers, scientists and myriad other professionals, as well as ethical citizens and servant leaders. The students at EIU performed 159,000 hours of community service for our region just last year. And to assist our state, we have made EIU consistently affordable; our current tuition is the second-lowest among Illinois public universities. We have remained administratively lean; EIU was stated to have, by the state auditor general, the lowest administrative cost per student of all 12 Illinois public universities. And we have been cost effective; EIU has been the lowest, or next to the lowest, of the public universities in terms of per capita funding from the state.
We are doing our part and making the tough decisions here on campus to move EIU forward. However, as a state university, we cannot do this alone. We call upon our partner in public education, the state of Illinois, to commit and deliver the resources necessary for us to continue to provide high quality and affordable public higher education. Our students and their families are working to move themselves and their state forward. The state needs to honor its commitment to those students.