We have received final information through the University of Louisiana System office about the allocation of funds for our institution for the 2013-14 fiscal year which began today. Based on all of the factors explained below, we anticipate a net reduction in our operating resources of between $2 and $3 million.
Our share of state-related funds will be about $1.3 million less than last year. In addition, our expenses for retirement, health, and risk management contributions will increase about $1.4 million next year.
While enrollment of new freshmen this fall is projected to reflect a similar level as last year, our ongoing analysis of pre-registration activity of returning students suggests a reduction of between 400-450 is likely. Initial feedback from some of these non-returning students suggests a primary cause of this enrollment change is affordability challenges associated with increased tuition and fees, which under the GRAD Act have gone up about 70% since 2009. The anticipated enrollment reduction in the fall plus lower enrollment this summer equate to about $2.5 million less in revenue.
Legislation approved in the recent session and signed by the Governor authorizes colleges and universities to assess students a fee to help fund the operation, maintenance, and repair of campus facilities. We estimate the fee will generate about $1.2 million for us next year, providing some relief to the operating fund for such activities.
In addition, a $10 million "special" appropriation for the University of Louisiana System was added during the legislative process, with each higher ed system receiving a similar appropriation in the budget. While we do not yet know how our System will choose to allocate these funds among the nine member institutions, we anticipate each institution receiving some part - an equal split would equate to about $1.1 million each. These funds are to be considered "one-time" monies to be used for one-time expenditures such as deferred maintenance.
As I have reminded the campus community before, our finances are complicated by two very important issues. First, this most recent reduction in resources comes on top of significant cumulative reductions over the last several years. Second, our 2012-13 fiscal year operating budget was balanced through the use of about $5 million in one-time and restricted funds, and this "structural deficit" will recur in the upcoming fiscal year.
We are required to submit a final detailed budget plan for the 2013-14 fiscal year within the next few weeks. Unfortunately, all of the above considerations taken together mean we will again be required to shrink our base-line operational costs. While there are many specifics to be determined, it is clear that additional personnel and programmatic reductions will be necessary in order to accommodate the reality of fewer resources. However, at this time I do not anticipate elimination of any academic degree programs.
As always, I will keep the campus apprised as additional details become available.