Tuesday, September 28, 2004

Opportunity costs of budget surpluses 

Our esteemed president announced that we had run a budget surplus last year, of which he seems extremely pleased.
I�m writing with some very good news for our campus. As we review the accounting of our finances, it appears that St. Cloud State University will have a positive budget balance from fiscal year 2004 after we have accounted for carry-forwards, set-asides, enrollment, MnSCU formula adjustments and settlements of contracts. This is in addition to the five percent that we are required by Minnesota State Colleges & Universities policy to hold in reserve.

So how did he make this happen? Three items are cited:
OK, so we had money that our business office had allowed to remain uncollected, and now we collected it. Great, but as President Saigo notes you cannot go back to that well again. That's not a budget saving at all, just a conversion from accounts receivable to cash. Then the businesspeople made a few dollars speculating in the fuel oil market -- super. Had they bet the wrong way and bought early, would we have heard about it? Probably not.

The last one, however, is galling. I took about five years to build up departmental technology to the point where every computer in an office of lab was no more than three years old. For roughly $6000 I could have maintained that edge for a department that has 18 faculty and 130 majors, running about 3000 seats a semester. But I got no equipment money ... so that this guy can proclaim he has a surplus? And I have students complaining about not getting seats, and adjunct faculty having their salary cut, and we just approved a rather skimpy contract ... and they declare they have extra money.

Is there a plan to spend it? And can Saigo show that it will have greater value than it might have in new instructors and instructional equipment?

Cui bono from a budget surplus?