Eastern addressing state revenue failure and reduced funding


College anticipates nearly $1 million in budget cuts in one-year period

WILBURTON, OK (Feb. 29, 2016) – Eastern Oklahoma State College is implementing immediate budget cuts in response to the state’s revenue failure and reduced funding of more than $347,000 since January. An additional mid-year cut is expected in March.

Due to the state revenue failure that was declared in December 2015, Eastern was required to take a three percent budget cut of $194,389. This results in about $32,000 less in funding each month from January through June.

Another revenue source for the state’s higher education system also experienced a shortfall and resulted in additional cuts to Eastern in February. The Higher Education Capital Revolving Fund and the Oklahoma Tuition Scholarship Revolving Fund receives revenue solely from oil gross production proceeds. The $26.3 million shortfall from these revolving funds only affects higher education. Eastern’s appropriations were cut an additional $152,860 due to the decline in revenue available.

Eastern President Dr. Stephen E. Smith said the college has been working on a plan for months in anticipation of reduced state funding.

“We have been doing research and making plans since we first learned of the potential budget shortfall,” Smith said. “Our goal has always been to protect the classroom and minimize the impact on academic programs and our students. However, as the state faces a $1.3 billion budget shortfall next year, we’ll have to make hard decisions to address these cuts.”

Already this fiscal year, Eastern has reduced operating budgets across departments, including decreases in purchasing, travel and class offerings.

“This has been a difficult process for Eastern and unfortunately, it’s one that many colleges and universities in the state are facing,” Smith said. “In order to best serve our students and be responsible stewards of our budget, we have to strategically identify areas where our resources can be used most effectively.”

Smith said at this point, administrators can only speculate about the amount of the third mid-year cut expected in March, as well as reductions to the fiscal year 2017 budget that begins July 1. He said Eastern is anticipating the March cut to be between $60,000 and $179,000 depending on how the state calculates the reductions. He said the cuts to the FY17 budget could be between seven to 13 percent.

“Additional budget cuts of this magnitude will require a reduction in personnel, as well as programs and services,” Smith said.

Smith noted that between the 3.5 percent cut that resulted in a $246,000 reduction to Eastern’s budget to start this fiscal year, the mid-year cuts and the anticipated cuts to next year’s allocation, the college will be forced to reduce its operating budget more than $1 million in a one-year period.

In 2008, Eastern’s state allocation was $7,129,152. Smith said by this year, Eastern’s state funding has dropped to $5,969,260.

“Eastern is a financially healthy institution, but we will be required to make significant reductions to stay that way,” Smith said. “Despite these cuts, Eastern will continue its 107-year mission to generate student learning while effectively preparing graduates to complete baccalaureate degrees, obtain productive employment and lead enriched lives.”

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