Summary
When President Kevin M. Guskiewicz, Ph.D., started in 2024, he made it a priority to understand and address the university’s pressing challenges, one of which is a growing budget deficit. The president and other leaders are carefully considering ways to save money and get the university’s budget back on track while continuing to prioritize university excellence — from supporting employees to advancing college affordability.
Why is there a budget deficit?
The shortfall stems from:
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Employee health care cost increases, which is a national trend
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Operating cost increases due to inflation
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Unbudgeted positions added to the general fund
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Low tuition rate growth that has not kept pace with inflation and growing financial aid
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State funding that has not kept up with student enrollment growth or inflation
While MSU has incurred smaller deficits in the past that we’ve been able to cover, the current shortfall is unsustainable. The situation is also more urgent now because of the likelihood that MSU will receive less money from the federal government — due to research cuts and restrictions on international enrollments — and from the state, although how much less is uncertain.
What’s the plan?
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To get MSU back in fiscal shape, President Guskiewicz is implementing a university-wide 9% general fund reduction over a two-year period (FYs 2026 and 2027)
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Unit leaders were instructed to develop reduction plans thoughtfully and strategically, keeping resources focused on what best supports MSU’s core mission
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Faculty hiring for Fall 2025 will continue as planned, but all open positions will undergo a university-wide hiring review; more information coming soon
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All collective bargaining agreements will continue as bargained
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Executive managers and deans making more than $200,000 will have a reduced pool for merit-based raises
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If positions must be eliminated, MSU is exploring the possibility of providing support services such as outplacement assistance, career counseling and access to available internal opportunities
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The university is also exploring the possibility of offering an incentive retirement program for tenure stream faculty
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For more information about the university’s financial planning process, see the president’s recent financial update.
Next steps
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June 6: Each unit submitted proposed budget reduction plans; extensions were granted for a few units who requested extra time
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June 6 – 27: The president and executive vice presidents alongside the Office of Finance review unit and college plans.
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July: Final decisions will be communicated to units and then units will announce the approved plans
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Fiscal Year 2026 – Two-thirds of the reductions must be implemented
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Fiscal Year 2027 – Remaining one-third of the reductions must be implemented
Questions?
Refer to the president’s recent financial updatefor more detail. Address questions or concerns with your unit’s leadership.