Eduardo J. Padrón
Office of the President
300 N.E. Second Avenue
Miami, Florida 33132-2297
Message From the President
Friday, June 20, 2008
Recipe for the Financial Crisis: Being Real, Remaining Hopeful
At the Board of Trustees' meeting this week, MDC’s 2008-09 budget was approved. Given the state’s financial condition and the diminished support for higher education, it was hardly a moment of celebration, but neither was it reason for despair. While we surely must be strict realists in addressing what qualifies as the worst funding crisis we have seen in many years, I am confident that we have a strong foundation at this institution and effective measures in place to deal with the challenge.
We have watched as other institutions have sliced away at programs and personnel. FIU’s cost-reduction plan includes the elimination of 23 degree programs, six research centers, and 38 faculty members. The public school system is mired in continuing debate, with proposals to cut the workforce by more than 2,100 employees and the possibility of closing schools, among a host of other consequences.
Being Realistic, Remaining Hopeful
While we are dealing with distinct hardships, no such drastic actions are being contemplated at MDC at the present time. Despite very serious cuts to operational funding, we will do our best to protect the essence of MDC: employees and students. Our collective and long-term efforts to streamline our bureaucracy and reduce costs have fortified the institution. Most importantly, we have learned from countless budget crises that we absolutely cannot afford to let finances stifle our innovation.
Cuts and Consequences
Having said that, it is very important to understand the extent of the funding crisis and the all too real consequences. The College is starting the 2008-09 school year with $13.7 million less in operational funding than this fiscal year, which ends June 30th.
In addition, the College faces:
- A reduction of $5 million in scholarships, as no dollars were provided for matching;
- A reduction of $4.1 million in matching dollars for facilities;
- A reduction in construction dollars of $8.5 million below our present allocation;
- A $2.7 million reduction in the maintenance budget.
All this comes at a time when we are experiencing significant increases in the cost of operations, such as:
- A projected increase in the cost of health and dental insurance of about $1.6 million ;
- A projected decrease in investment income of approximately $2 million;
- A projected increase in the cost of utilities of about $1.8 million.
To top it off, we will absorb $14.7 million in unfunded FTE for 2008-09. We have experienced significant enrollment growth over the past year, in excess of 8% overall, but those students are attending without state support. When you add the most recent development – the Governor's call last week to withhold an additional 4% - it is clear that we may not have seen the worst.
The plan is very similar to what we have implemented in the last few years: increased efficiency and productivity; cost containment; program consolidation; streamlining of the bureaucracy and more.
We'll need to manage the class offerings very carefully, as the resources to hire additional staff and faculty are not sufficient to meet the increased demand. The employment freeze will continue with only essential positions hired. I know that many units and departments at the College are strained and I deeply commiserate with you. However, we'll need to do the best we can.
The College will continue to do an extensive review of all areas to identify ways in which to bring about savings.
Raising compensation levels for the College's employees is a cornerstone of our budget each year. But in the current fiscal environment, it simply may not be possible to provide any increases. However, no decision has been made at this date. The coming weeks will provide a clearer picture and I will keep you apprised.
A Brighter Day...
This is a serious challenge. As the economy limps along, this institution and each of us personally will continue to feel the effects. But if we work together, we can demonstrate something that money can’t buy. If we can make a priority of keeping this institution alive and well via innovation and creativity, we will do much better than merely survive this crisis. You prove that each day and you have my admiration and respect for your dedication.