Frequently Asked Questions
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Note: All answers reference the NMSU-Las Cruces Campus FY10 Instruction and General (I&G) Budget unless otherwise noted.
- What is the financial condition of New Mexico State University?
- What percent of our budget is from the state?
- What percent of our budget is from tuition and fees?
- What are the primary sources and uses of the university’s operating revenue?
- Why has the state’s level of funding for NMSU decreased so dramatically this year?
- Why can’t university balances be used to cover the state appropriation reductions?
- Can NMSU use the $6 million in American Recovery and Reinvestment Act (ARRA) funds that we will receive to help offset the impact of the FY 11 state funding cut?
- Why does the university have to freeze positions in the current fiscal year?
- Will there be an early retirement program?
- Where can I learn more about the university’s budget?
- How much will tuition increase for both undergraduate and graduate students?
- Why is tuition different for residents vs. non-residents?
- Why are there continual increases in the tuition rate?
- The NMSU financial statement shows a fund balance of approximately $100M. How can this money be used?
- What is the financial condition of New Mexico State University?
- What percent of our budget is from the state?
- What percent of our budget is from tuition and fees?
- What are the primary sources and uses of the university’s operating revenue?
- Why has the state’s level of funding for NMSU decreased so dramatically this year?
- Why can’t university balances be used to cover the state appropriation reductions?
- Can NMSU use the $6 million in American Recovery and Reinvestment Act (ARRA) funds that we will receive to help offset the impact of the FY 11 state funding cut?
- Through the state government, NMSU system has been allocated one-time ARRA funding in the amount of $4.7 million for the Las Cruces campus and $1.3 million for the Community Colleges.
- The funding is being allocated in two installments, and is subject to certain contingencies and restrictions. As such, we can only apply the funding in phases as it is received, only for allowed expenses, and only for FY11.
- Our plan is to use these funds to offset increases in employee benefit costs during FY 11 while we look at possible benefits program redesign options. These increased costs are on top of the state appropriation reduction, and thus add to the university's financial burden above the quoted 9.8%.
- Why does the university have to freeze positions in the current fiscal year?
- Will there be an early retirement program?
- Where can I learn more about the university’s budget?
- How much will tuition increase for both undergraduate and graduate students?
- Undergraduate, resident 8 percent, $201 per semester for full-time student
- Undergraduate, non-resident 10.1 percent, $765 per semester for full-time student
- Graduate, resident 8.3 percent, $222 per semester for full-time student
- Graduate, non-resident 10 percent, $777 per semester for full-time student
- Why is tuition different for residents vs. non-residents?
- Why are there continual increases in the tuition rate?
- The NMSU financial statement shows a fund balance of approximately $100M. How can this money be used?
- Per the Board of Regents guidelines, we are not allowed to commingle funds across Board-designated restrictions, and to do so would be contrary to good business practices.
- Also it is poor budgetary practice to use nonrecurring sources, such as the fund balances quoted above, to address a permanent reduction in recurring funding.
- The balances can be used to help with the transition to a lower budget level.
Although NMSU-Las Cruces is facing a permanent reduction in its level of state appropriation funding, the financial condition is sound. The challenge we face is that our state appropriations are fully budgeted. This means that all funds have been allocated to specific budget needs. The reductions in the level of appropriation must be made up in two ways: 1. increases in other unrestricted revenues, such as an increase in tuition and fees 2. a reduction in the budgeted expenses that are funded by state appropriations. The FY11 NMSU-LC state appropriation budget will be permanently reduced by $12.3 million, which equates to 9.8% of the total state appropriation I&G budget.
About 60% of the unrestricted I&G budget comes from state appropriations. For the total current funds budget, including both unrestricted and restricted funds, about 35% comes from state appropriations. These percentages have remained fairly consistent for multiple years.
About 30% of the unrestricted I&G budget comes from tuition and fees, and about 14% of our total current funds budget, including both unrestricted and restricted funds, comes from tuition and fees. These percentages have remained fairly consistent for multiple years.
See summary tables for both NMSU as a system and NMSU-LC at NMSU Uses and Sources of Current Funds.
The state of New Mexico continues to be a strong supporter of higher education: about 15% of the appropriation budget has historically been allocated to this sector of state government, which is high when compared with many other states. The state of New Mexico has been forced to reduce appropriations in response to the national economic recession over the last few years, as have other states: because we can charge tuition, higher education has taken a greater percentage of the reductions than have certain other sectors. NMSU-Las Cruces’ state appropriation budget covers three primary functions: instruction and general (I&G), research, and public service. The instruction and general budget for FY11 was reduced at a higher percentage than was the comparable budget for the higher education sector in total within the state because our enrollment in FY09 did not grow as much on a percentage basis than did other state institutions. The appropriation funding is calculated in part based upon enrollment levels from two years prior. In FY10, for example, NMSU-Las Cruces’ I&G appropriation reduction was at a much lower percentage than many other institutions, because our enrollment in FY08 (the base year) had grown at a higher proportional amount.
The state appropriation reductions are permanent: balances can only be used to cover a one-time, nonrecurring reduction in funding. The same is true of nonrecurring funding sources, like the ARRA funds discussed below. The university has used one-time money in the past, and will again in FY11, to help mitigate the impact of the recurring state appropriation reductions, but these are only temporary solutions.
While the ARRA appropriation will certainly help our budget situation, these funds are a one-time budget allocation. The state budget reduction is a recurring cut and will need to be handled in a long-term fashion.
Here are details on the ARRA funds:
About 65% of the total I&G budget is made up of salaries and related benefits. The vacant positions are being held as assurance of the university’s ability to meet an upcoming permanent reduction in appropriations until another permanent solution is approved by the Board of Regents. It is the administration’s goal to replace the position freeze with a series of strategic reductions as approved by the Regents as soon as possible in the new fiscal year while allowing adequate time for consideration and review of options among appropriate constituent groups.
While the university is considering many budgetary options, we are not planning a central incentive retirement plan.
An open forum will be scheduled by the Senior Vice President for Business, Finance and Human Resources in early April; please watch Hotline for more information. Summary information is also available on this website.
This is a standard practice at state universities nationally. Because the state subsidizes a large part of the cost of education for students at state institutions, it is expected by the state that the subsidy will be greater for in-state residents. The NMSU Regents over time have met this expectation by setting non-resident tuition and fees at higher rates.
We take great care to avoid raising tuition, and are working hard to cut expenses as well as look for other revenue sources. However, the balance between affordability and quality of the education offered must always be paramount in our minds, and we must all attune ourselves to the reality of a multi-year decline in state subsidy of higher education at a national level.
There are two primary factors that influence tuition rates – the cost of delivery of instruction, which includes a portion of the general support functions of the institution, and how much of the cost of education can be subsidized by the state, by gift income, by interest earnings, and other sources.
Higher education has faced the same economic picture faced by other businesses and, now more directly, by state government. While the cost of operations increase (including health care and other insurances, utilities, and the average salary level required to recruit and retain good faculty), state appropriations and other sources of subsidy decrease. In the current economic environment, states are facing hard decisions about where to allocate their sharply decreased tax and natural resource revenues, while Foundations are stymied by financial market downturns, which curtail charitable giving and investment returns.
The university’s audited financial statements show an unrestricted fund balance at 6/30/09 of $111,832,490. Questions have arisen as to whether these funds could be used to help offset the impact of the permanent reduction in state appropriations for FY11. The following provides at a summary level the designation of these balances: $57 M for capital projects; $12 M for quasi-endowments such as support for professorships; $12M for our community colleges; $18M for Las Cruces campus operating funds designated to non-I&G purposes ( this includes $13M for research support). Finally, there is $13M for the Las Cruces campus I&G fund which represents a reserve of about 6.3% and is in line with Higher Education Department guidelines.
There are a few points to consider when examining these funds:
We believe it is important to allow colleges and units some autonomy in managing a budget downturn. Thus, our budgetary strategy relies upon a combination of new I&G revenues and reduced I&G expenses, rather than converting unrelated sources to Las Cruces I&G use, or to borrow against the future by making recurring commitments from non-recurring funds.