Due to the effects of COVID-19 on the economy, we anticipated cutbacks from the state of New Mexico to our budget for the 2020–2021 fiscal year. The Legislature met in June to revise the state budget, and Governor Michelle Lujan Grisham signed the new bill into law on June 30. Its effect on NMSU’s budget is both immediate and severe.
Nearly 40 percent of our university budget comes from state funding. Because New Mexico is an energy exporter, much of our state revenue is generated by that industry. With the simultaneous crises of COVID-19 and the national economic downturn, the energy sector has been dramatically weakened, and so has our state’s financial situation.
In response, our state Legislature reversed its decision to provide 4 percent salary raises, eliminating all those funds from our budget. It also cut higher education budgets by 4–6 percent. In addition to those cuts, the Legislature also reduced our budget by approximately two-thirds of the federal funding we received to cover costs associated with the pandemic. That federal funding was for this year only, but those state cuts are to recurring funds, and that combination now brings our overall budget reduction to 8–10 percent.
Another important source of revenue for NMSU is tuition, but it is impossible to predict future enrollment during a pandemic. Like many people, some students are waiting to enroll until they have a better sense of what the future holds. If enrollment declines, that could push our budget cuts further, perhaps into the 10–15 percent range.
We must now work together to find ways to reduce our budget. Some solutions will come centrally, and other solutions will have to come from the units. The leadership is committed to an approach that is strategic and thoughtful, and we are avoiding non-strategic across-the-board cuts.
Here are some additional points for consideration:
We are analyzing each of our departments and colleges, as well as our non-academic units, and comparing them to similar units across the nation to assess where we can be more efficient.
We must reduce practices that are not financially viable, such as teaching classes with very few students.
As a last resort, salary cuts and layoffs have to be part of this discussion.
Tenure, accreditation, and academic program requirements may limit our flexibility to reduce expenses in academic areas.
Employees and stakeholders will have a voice in this process. We will seek out and consider broad input. However, such tough decisions fall upon campus administration. Our promise to you is that we will do what is best for our university.
The good news is that we are guided by a strong strategic plan, NMSU LEADS 2025. That plan identifies our university priorities of student success; research and creativity; extension and outreach efforts; and building a more robust university system. This plan will help us work through this situation. Expect more communications in the days and weeks to come.