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Author Topic: MU: $15 million budget shortfall for fiscal 2020  (Read 2726 times)

The Lens

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MU: $15 million budget shortfall for fiscal 2020
« on: June 23, 2020, 03:46:55 PM »
I had heard that MU's freshman class was an issue well before COVID.  This could be a very rough year for the University.

https://biztimes.com/marquette-unveils-cost-cutting-plan-to-address-budget-shortfall/
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TinyTimsLittleBrother

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Re: MU: $15 million budget shortfall for fiscal 2020
« Reply #1 on: June 23, 2020, 04:24:38 PM »
I said this two months ago.

https://www.muscoop.com/index.php?topic=60338.msg1228798#msg1228798

To simplify things, tuition revenue is determined by the number of students multiplied by what an average student pays.  The problems at MU aren't just enrollment for this year.  Last year's class was disappointing not only number wise, but they had to discount tuition just to get enough bodies through the door so it wasn't a complete disaster.  So on top of this class who isn't paying enough as a whole, and for whom you had to reimburse half a semester's room and board costs, you are bringing in an smaller freshman class.  So those are two bad revenue years that the University will be stuck with for the two years after this one.

Last fall I mentioned that the Board really needs to start asking questions of President Lovell.  Betting on increased freshmen classes, only to have them come in smaller, is only part of the problem.  Fundraising isn't going well.  Too many announced projects that are falling short.

On top of that, the college bureaucracy has ballooned with numerous people with overlapping responsibilites and unclear missions.  I mean look at this mess.  There are 16 people with "Vice President" in their title.

https://www.marquette.edu/leadership/documents/ulc-org-chart.pdf

I want to be optimistic, but it is hard to be.

Billy Hoyle

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Re: MU: $15 million budget shortfall for fiscal 2020
« Reply #2 on: June 23, 2020, 04:26:06 PM »
I had heard that MU's freshman class was an issue well before COVID.  This could be a very rough year for the University.

https://biztimes.com/marquette-unveils-cost-cutting-plan-to-address-budget-shortfall/

It is going to be a rough year for many universities. I just read that Michigan State is looking at a $300 million budget deficit for the upcoming year.

I remember MU having budget issues when I was a student in the '90s and the alma mater emerged alright.
« Last Edit: June 23, 2020, 05:27:16 PM by Billy Hoyle »
What, you still throwing up bricks? What is this, a Masons convention? Clank, clank! I need, like, a welding torch to play in this league! I got an idea, let's just stop right now and gather up all these bricks and let's build a shelter for the homeless so maybe your mother will have a place to stay

MUeng

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Re: MU: $15 million budget shortfall for fiscal 2020
« Reply #3 on: June 23, 2020, 09:53:35 PM »
All things considered $15 mil isn't too bad.  Out here the University of Denver is short $45 mil, best case scenario we were told.  With respect to Michigan State and other similar schools, I suspect much of that shortfall is due to canceled sports and massive losses in revenue?

mu_hilltopper

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Re: MU: $15 million budget shortfall for fiscal 2020
« Reply #4 on: June 23, 2020, 09:59:40 PM »
Last year's class was disappointing not only number wise, but they had to discount tuition just to get enough bodies through the door so it wasn't a complete disaster.

Anyone know how that compares to other similar schools?  Is DePaul, SLU, Dayton, Creighton, Xavier, etc .. having the same enrollment issues? 

I'd guess most privates are in the same boat.  It's not like MU is specifically a damaged brand -- beyond the basketball post-season issues, naturally.

The Lens

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Re: MU: $15 million budget shortfall for fiscal 2020
« Reply #5 on: June 23, 2020, 11:22:11 PM »
All things considered $15 mil isn't too bad.  Out here the University of Denver is short $45 mil, best case scenario we were told.  With respect to Michigan State and other similar schools, I suspect much of that shortfall is due to canceled sports and massive losses in revenue?

What’s MU’s budget?  What is Denver’s?
The Teal Train has left the station and Lens is day drinking in the bar car    ---- Dr. Blackheart

Billy Hoyle

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Re: MU: $15 million budget shortfall for fiscal 2020
« Reply #6 on: June 23, 2020, 11:46:21 PM »
All things considered $15 mil isn't too bad.  Out here the University of Denver is short $45 mil, best case scenario we were told.  With respect to Michigan State and other similar schools, I suspect much of that shortfall is due to canceled sports and massive losses in revenue?

My old assistant now works for DU and was fortunate to avoid any cuts or layoffs.

MSU’s shortfall is the university, not the athletic department.
What, you still throwing up bricks? What is this, a Masons convention? Clank, clank! I need, like, a welding torch to play in this league! I got an idea, let's just stop right now and gather up all these bricks and let's build a shelter for the homeless so maybe your mother will have a place to stay

Fluffy Blue Monster

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Re: MU: $15 million budget shortfall for fiscal 2020
« Reply #7 on: June 24, 2020, 07:36:51 AM »
All things considered $15 mil isn't too bad.  Out here the University of Denver is short $45 mil, best case scenario we were told. 


You're misunderstanding.  $15 million is Marquette's shortfall for fiscal year '20.  Denver's is its projections for fiscal year '21.  I have no idea what Marquette's revenue shortfall is for '21 but my guess is that it is significantly larger than $15 million.
« Last Edit: June 24, 2020, 07:38:30 AM by Fluffy Blue Monster »
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Fluffy Blue Monster

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Re: MU: $15 million budget shortfall for fiscal 2020
« Reply #8 on: June 24, 2020, 07:38:11 AM »
My old assistant now works for DU and was fortunate to avoid any cuts or layoffs.

MSU’s shortfall is the university, not the athletic department.


I don't know if this is the case in Michigan, but in Wisconsin the public universities were asked to give back a portion of their state allocation.  So not only did they have to reimburse room and board for half a semester, they had to give back money to the state too.
“True patriotism hates injustice in its own land more than anywhere else.”  -Clarence Darrow

TinyTimsLittleBrother

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Re: MU: $15 million budget shortfall for fiscal 2020
« Reply #9 on: June 24, 2020, 07:59:01 AM »
You're misunderstanding.  $15 million is Marquette's shortfall for fiscal year '20.  Denver's is its projections for fiscal year '21.  I have no idea what Marquette's revenue shortfall is for '21 but my guess is that it is significantly larger than $15 million.

It is significantly larger than $15 million.  My understanding is that are still working out the details of a revised budget for next year because ever changing plans for next year have financial impacts. 

MUfan12

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Re: MU: $15 million budget shortfall for fiscal 2020
« Reply #10 on: June 24, 2020, 08:31:18 AM »

Last fall I mentioned that the Board really needs to start asking questions of President Lovell.  Betting on increased freshmen classes, only to have them come in smaller, is only part of the problem.  Fundraising isn't going well.  Too many announced projects that are falling short.


This right here.

The Lens

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Re: MU: $15 million budget shortfall for fiscal 2020
« Reply #11 on: June 24, 2020, 08:46:29 AM »
This right here.

Who is in his corner? Every rumbling I hear is negative.
The Teal Train has left the station and Lens is day drinking in the bar car    ---- Dr. Blackheart

TinyTimsLittleBrother

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Re: MU: $15 million budget shortfall for fiscal 2020
« Reply #12 on: June 24, 2020, 09:02:58 AM »
Who is in his corner? Every rumbling I hear is negative.


I have interacted with him a couple of times.  He is genuinely a nice man with deep faith who cares a great deal for the University.  There isn't anyone who doesn't want the guy to succeed.  But he is prone to big ideas and hasn't been held back when he should have been.  The performance center, the business school, investing money into the operating budget and paying it off with increased enrollment.  And he has made some questionable hires too.  He's hired three advancement vice presidents.  The second one was a terrible fit from the beginning and only lasted a year.  Hopefully the guy there now works out.  But the whole thing is just not working.

LloydsLegs

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Re: MU: $15 million budget shortfall for fiscal 2020
« Reply #13 on: June 24, 2020, 09:45:54 AM »
$220 million projected deficit for University of Chicago this year (not including hospital, which will be hit hard)

Northwestern $90 million

Galway Eagle

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Re: MU: $15 million budget shortfall for fiscal 2020
« Reply #14 on: June 24, 2020, 09:49:23 AM »
$220 million projected deficit for University of Chicago this year (not including hospital, which will be hit hard)

Northwestern $90 million

So U of C doesn't get sports rev I'm assuming so what's the massive shortfall from? Do they really get that much in fundraising?

mu_hilltopper

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Re: MU: $15 million budget shortfall for fiscal 2020
« Reply #15 on: June 24, 2020, 10:40:41 AM »
U of Chicago, Northwestern .. $300m loss.    Many other industries report massive revenue hits.

I'm always curious when this happens to ask .. what did society really lose there?   Are the students of those two schools $300m less educated?  What will society do with the $300m not spent there?

Et cetera.

Fluffy Blue Monster

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Re: MU: $15 million budget shortfall for fiscal 2020
« Reply #16 on: June 24, 2020, 10:44:21 AM »
That's not really how the economy works.  Most of these losses are due to students not being able to afford to come to school because they, or their parents, have lost income.  There isn't simply $300 million floating around in the economy to be spent elsewhere.
“True patriotism hates injustice in its own land more than anywhere else.”  -Clarence Darrow

cheebs09

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Re: MU: $15 million budget shortfall for fiscal 2020
« Reply #17 on: June 24, 2020, 10:49:55 AM »
U of Chicago, Northwestern .. $300m loss.    Many other industries report massive revenue hits.

I'm always curious when this happens to ask .. what did society really lose there?   Are the students of those two schools $300m less educated?  What will society do with the $300m not spent there?

Et cetera.

Also, I’m kind of curious on the creative accounting. It’s been awhile since my accounting classes, but is there some value if you are already taking a loss to maximize that?

That’s why I chuckle at this talk of the Brewers losing money. My tax professor said they try to run sports teams at a loss so for personal taxes, they get a ton of savings.

Fluffy Blue Monster

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Re: MU: $15 million budget shortfall for fiscal 2020
« Reply #18 on: June 24, 2020, 10:53:24 AM »
I think these budget losses are actually revenue dereases.  I doubt the University of Chicago is going to post a $200 million loss.  Also, schools will likely be tapping their endowment for larger distributions as well.
“True patriotism hates injustice in its own land more than anywhere else.”  -Clarence Darrow

MUeng

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Re: MU: $15 million budget shortfall for fiscal 2020
« Reply #19 on: June 24, 2020, 08:21:12 PM »

You're misunderstanding.  $15 million is Marquette's shortfall for fiscal year '20.  Denver's is its projections for fiscal year '21.  I have no idea what Marquette's revenue shortfall is for '21 but my guess is that it is significantly larger than $15 million.
gotcha.  Yea I did not see DU's shortfall for wrapping up '20, just projection for 20-21.  Staggering no doubt, as $45 mil best case is significant.  I'm sure it will be a balanced approached of raising tuition in the short-term, cutting new projects and construction, tapping endowment.  tough times for universities.  My niece had to turn down CSU and go with Lacrosse because the economics of going mostly online out of state just didn't make sense to her parents budget.  understandable.

vogue65

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Re: MU: $15 million budget shortfall for fiscal 2020
« Reply #20 on: June 24, 2020, 09:36:07 PM »
NO PROBLEM, CUT OVERHEAD.

Rule of thumb, when an organization has 25% unutilized capacity it goes bankrupt.

The country has bigger problems than colleges budget shortfalls.

Hards_Alumni

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Re: MU: $15 million budget shortfall for fiscal 2020
« Reply #21 on: June 25, 2020, 06:52:36 AM »
NO PROBLEM, CUT OVERHEAD.

Rule of thumb, when an organization has 25% unutilized capacity it goes bankrupt.

The country has bigger problems than colleges budget shortfalls.

You should probably divorce "Rule of Thumb" from your vocabulary.

Fluffy Blue Monster

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Re: MU: $15 million budget shortfall for fiscal 2020
« Reply #22 on: June 25, 2020, 08:02:28 AM »
gotcha.  Yea I did not see DU's shortfall for wrapping up '20, just projection for 20-21.  Staggering no doubt, as $45 mil best case is significant.  I'm sure it will be a balanced approached of raising tuition in the short-term, cutting new projects and construction, tapping endowment.  tough times for universities.  My niece had to turn down CSU and go with Lacrosse because the economics of going mostly online out of state just didn't make sense to her parents budget.  understandable.



The vast majority of schools are dealing with this primarily through cuts in personnel expenses.  Furloughs, temporary pay cuts, unfilled positions, etc.  It the largest expense a college or university has so it's the one that needs to be targetted first.
“True patriotism hates injustice in its own land more than anywhere else.”  -Clarence Darrow

vogue65

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Re: MU: $15 million budget shortfall for fiscal 2020
« Reply #23 on: June 25, 2020, 10:03:31 AM »
Bankruptcy would probably be a good topic for a thread.

Having once  gone bankrupt myself,  having worked for three bankrupt companies, I'm somewhat an expert on the subject.  Nevertheless, I'm lost for words about the gargantuan shortfalls in higher education. 

Bankruptcy is one of the foundations of our capitalist system. 
It is an uncomfortable subject like death.
Bankruptcy is not a fad, it is a reality.



Fluffy Blue Monster

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Re: MU: $15 million budget shortfall for fiscal 2020
« Reply #24 on: June 25, 2020, 10:15:02 AM »
Colleges and universities usually just close.  I don't know if the corporation officially goes into bankruptcy as part of that process.
“True patriotism hates injustice in its own land more than anywhere else.”  -Clarence Darrow

 

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