Full review of all privilege fee entities ordered to deal with anticipated financial impacts from pandemic

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Pandemic-related financial crisis could cause enrollment to decrease and privilege fees to skyrocket for students. SGA will review every entity to initiate budget cuts amounting to about two to three percent. (Photo Illustration by Kandace Griffin | Collegian Media Group)

To deal with anticipated enrollment declines, Student Governing Association leadership will begin the process of reevaluating every privilege fee entity’s budget to determine the viability of a two to three percent cut.

This unprecedented motion will force the student senate to hold a special meeting after the semester ends to vote on the recommended cuts. All privilege fee decisions require a majority vote from the student senate to pass. Leading up to this meeting, the speaker of the student senate, the privilege fee committee chair and the student body president will review financial impact statements and make recommendations that the Privilege Fee Committee will need to sign off on.

With public health concerns and financial problems a top concern for students, speaker of the student senate and junior in political science and communication studies Nathan Bothwell said he would not be surprised if less students attend K-State next year.

“These barriers will prevent them from coming to college,” Bothwell said. “If that were to happen, and we get drastically less students, that’ll really balloon-up the cost of the fee for the coming year, and if that’s the case, it’ll be really difficult to have such a high fee…”

The privilege fee is added on top of each students’ tuition each semester. For the whole academic year, students paid just short of $950 in privilege fees, or $472.50 a semester. The money amasses a $16 million account that pays for operations at the K-State Student Union, Recreational Services, Lafene Health Center and other on-campus service providers.

The individual cost of the fee to each student is dependent completely on enrollment. Budget contracts have to be fulfilled no matter how many students attend K-State, so as enrollment declines, the individual cost increases.

For the last few years, the privilege fee account has come up short, requiring emergency funds to be moved from the Debt Reduction account to keep the budget out of the red. This year, the budget shortfall was large enough that it also required money to be moved from bond surplus accounts on top of the funds already moved from the Debt Reduction account.

The deficit was larger this year because enrollment declined more than was anticipated, and since summer classes will be online, privilege fees will not be collected through that term.

During a normal year of operations, the Privilege Fee Committee will review a handful of contracts on a rotating schedule. Most contracts last for three years so entities are not reviewed annually unless needed.

In the last SGA term, a resolution was introduced and passed that added a clause to every privilege fee contract that allowed all entities to be pulled out of their regular review cycle and examined all at once, Privilege Fee Committee chair and junior in finance Madison Brown said.

“I can’t believe we needed to initiate it so soon,” Bothwell said. “Unfortunately, we find ourselves in a situation where we are pending insufficient collections in the fall due to the number of unknowns associated with COVID-19.”

On April 22, student senate was informed that they would need to return for the special meeting. The process of reaching out to the directors of privilege fee receiving entities began. They will have until May 6 to submit financial impact statements that indicate how varying degrees of cuts would affect their budget.

“Our general thought process going into this is that we do need to be cutting every entity,” Brown said. “Even though we don’t want to, that’s just what needs to be done.”

After the cuts are decided and voted on, any decisions made about the budgets would be permanent until the entity is reviewed again by the Privilege Fee Committee —whether that is one, two or three years depends on how recently an individual entity has been reviewed.

Funding decisions would take effect for the fiscal year that begins on July 31.

Ultimately, the plan set by the student senate will have to be approved by President Richard Myers as well as the Kansas Board of Regents. All tuition decisions made about public higher education in the state of Kansas are subject to approval or denial by KBOR. It’s important to get all this done by June because that’s when the Regents are meeting to discuss tuition and fees, Brown said.

If the Kansas Board of Regents decides to vote down the proposed budgets for the privilege fee, they do have the authority to do so, Bothwell said.

“One of the great things we love about the Privilege Fee Committee is that our recommendation is always accepted by President Myers,” Brown said. “So, it really is a lot of power we have in [the] student voice.”

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