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Economy & Business

University of Missouri announces hiring freeze system wide

This article first appeared in the St. Louis Beacon: November 18, 2008 - Only weeks after painting a rosy picture about the fiscal health of the University of Missouri, the system's president, Gary D. Forsee, reversed himself on Monday by announcing a system-wide hiring freeze.

He said in a letter to chancellors that the freeze would cover all administrative, staff and faculty positions. He also ordered a halt to hiring searches currently underway and a freeze on filling open positions except those covered by federal funds.

About two weeks ago, during the celebration of a successful billion-dollar fundraising campaign on the Columbia campus, Forsee and officials on the Columbia campus sounded more optimistic about the system's fiscal health. At that time, Forsee said he didn't expect a freeze would be needed.

On Monday, he acknowledged the shift, saying his initial comments were "based on the context at the time." Since then, he said, the economic picture had changed due to turmoil in the stock market and the expectations of difficult economic times.

"The forecast for the economy is of great concern," said Forsee, former chief executive for Sprint.

Without explanation, Forsee also said, the outcomes of national and state elections would "provide a renewed opportunity to focus on the challenges at hand and possible solutions."

In an interview late yesterday, Betsy Rodriguez, the system's vice chancellor for human resources, said the freeze wouldn't prevent chancellors from filling some critical positions.

"Each chancellor will be allowed to make exceptions, but the exceptions will be fewer. The exceptions will vary by campus and will be based on the chancellors making the best use of resources they have."

This freeze recalls a similar action taken by the UM system following an economic downturn about five years ago. Rodriguez wouldn't say whether the system had made plans beyond the freeze, such as layoffs or budget cuts in the event current state budget projections lead the next governor to delay funding some state-funded programs.

She said, "We'll have to see where we are, and it's way too early to know what will come" after the freeze.

The freeze is not unique to schools in Missouri. Major universities in other states, from Florida to Michigan, began imposing freezes at least as early as July due to lower state funding for education or the gloomy economic conditions.

Other colleges feel the squeeze, too

Some other public colleges in Missouri are just as jittery as the Missouri system but have yet to impose freezes.

"We're holding our breath and waiting to see what's going to happen," says Michael McManis, executive assistant to the president of Truman State University in Kirksville. "We haven't imposed a freeze, but we're asking everybody to limit expenses to the extent that we can."

He said the school was particularly concerned about news that state revenue projections had dipped by 1.1 percent since the summer.

"It needs to grow by 2.8 percent (for the year) to meet the budget," McManis said.

Meanwhile, St. Louis University's president, Father Lawrence Biondi, says the downturn has hurt the university, but he stressed in a statement that the school remains in a strong financial position, with enrollment up 2 percent and an endowment valued at nearly $800 million in spite of recent investment losses. But he also said donations to the university were down due to economic uncertainty and investment losses. And while SLU has no hiring freeze, he said the school owed it to "our current and prospective students and to our future to operate efficiently."

One casualty of the downturn is the university's efforts to redevelop property at the corner of Grand and Lindell in midtown. The university had been working with McCormack Baron Salazer, but Biondi said the parties were unable to "finalize a development plan that worked for both the developers and for SLU, given the current economic and real estate conditions."

Another visible sign of the downturn is at Westminster College, which isn't being nearly as aggressive in its fund-raising campaign to double its endowment. Previously, the school had planned a full court press for donors; now, it is being more selective and "very sensitive to the economic conditions that our donors are in," says Dan Diedriech, Westminster's vice president for institutional advancement.

The school $55 million endowment, like those of other colleges, has declined to the point that school officials changed the earnings forecast to 0 percent in the last year and ended up earning 0.5 percent.

"We were fortunate to gain a little bit," says Diedriech, noting that endowments at many schools didn't grow at all. "Our endowment will lose money this year, and we'll have to see how that will affect our budget. We've yet to do that. We'd like to have more money, but we're not in any dire straights by any means."

Diedriech added that he didn't expect any major changes in the university's operation in spite of the drop in the endowment's value.

Westminster was rated by Forbes magazine as one of the nation's top 50 schools, and Diedriech said the university held an advantage over the other schools on the list because it costs a student about half what the other 49 do.

"Parents strapped for cash will have to spend at Westminster only about half what they'd spend to get a good education" at these other colleges, he said.

At least none of Missouri's schools seems to be considering the draconian approach that the California State University system has announced. According to the Los Angeles Times, the system is proposing for the first time to turn away qualified students because of the state's worsening budget crisis.

The proposal calls for paring 10,000 students from the system, beginning in September. With an enrollment of 450,000 on 23 campuses, the system is the nation's largest institution of higher education.

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