FOR IMMEDIATE RELEASE

REGENTS DECLARE FINANCIAL EMERGENCY AT SOUTHEAST

CAPE GIRARDEAU, Mo., June 12, 2002 - The Southeast Missouri State University Board of Regents today declared that a financial emergency exists at the University which cannot be managed except by a reduction in personnel and by meeting targets for spending reductions established in a proposal to balance the University’s fiscal 2002, 2003 and 2004 budgets.

The declaration of a financial emergency was recommended by the Budget Review Committee and the Faculty Senate last week.

The Regents acknowledged that a financial emergency exists in light of serious monetary shortfalls faced by the State of Missouri and cuts in higher education appropriations. Southeast’s fiscal 2002 state appropriations were reduced by $2.25 million in August, $.9 million in December and $4 million in May for a total of $7.15 million.

In addition, Southeast’s partial appropriation for June of $1.3 million has not yet been released and could be deferred until July or totally eliminated. Additionally, the University’s base appropriation for the fiscal year starting July 1, 2002, will be at least 10 percent less than Southeast’s initial appropriation for fiscal 2002, and University officials have been warned that one-time withholdings may be necessary during fiscal 2003 in order to balance the state budget.

The unexpected reduction of $4 million in May required Southeast to use all of its “rainy day reserves” of $2.9 million and the $1 million it held back from this year’s budget that it was going to use to help balance the fiscal 2003 budget.

In declaring a financial emergency, the Regents endorsed proposals to balance the University’s fiscal 2002, 2003 and 2004 budgets. Those proposals calls for balancing the fiscal 2002 budget by using the $2.9 million “rainy day fund” and the $1 million cut from the fiscal 2002 budget originally designated to balance the fiscal 2003 budget. Goals for balancing the fiscal 2003 budget call for recouping $2 million to replenish the fund and an additional $1 million for potential additional withholding in fiscal 2003. Goals established for fiscal 2004 call for identifying a $1 million base to replace half of the University’s one-time dollars used to balance the fiscal 2003 budget and recouping the remaining $1 million for the “rainy day fund.”

Decisions on other budget-trimming suggestions such as reorganization and consolidation of units with potential reduction of personnel will not be made until full campus discussion can take place in August, September and October. It is anticipated that the annual staff and faculty convocations will be the "kickoff" for these campus-wide discussions.