FAMU’s general revenue appropriation shrinks to lowest level since 2012

At the end of this year’s legislative session, FAMU ended up with the lowest general revenue appropriation that it has had since 2012.

FAMU received $66,611,060 in its “General Revenue” line item for 2015-2016. That is the smallest since 2012, when FAMU finished the session with $65,584,450 in general revenue.

Back during 2012, the Florida Legislature sliced $300,000,000 from the State University System of Florida (SUS). It told public universities to use a portion of their reserves to fill the budget gap. Florida law requires public universities to keep a fund balance, or reserve, of no less than five percent. Lawmakers replenished the recurring funds FAMU lost that year during the 2013 session, when the university received $82,770,293 in general revenue.

The decline in FAMU’s general revenue dollars for this year wasn’t caused by across-the-board appropriations cuts in the SUS. It was a result of the FAMU administration's decision to back a Board of Governors (BOG) proposal to create a new budget entity for the FAMU-FSU College of Engineering.

Both chambers of the legislature originally placed $12,996,539 for the College of Engineering in the FAMU general revenue budget at the start of the 2015 session. FAMU would have had $79,607,599 for that line item this year if the money had stayed there.

But on February 19, FAMU President Elmira Mangum gave her support to a BOG proposal that asked the legislature to create a new budget entity for the FAMU-FSU College of Engineering. The proposal said that the new budget entity would “include all operating funds for the Joint College, including the appropriate amount of plant operation and maintenance funds.”

The appropriations subcommittees for the Florida House of Representatives and the Senate shifted the $12,996,539 for the College of Engineering from FAMU’s general revenue line item to the new budget entity entitled “FAMU/FSU College of Engineering” in March.

Florida State University has received a separate appropriation for the College of Engineering for years. It was a total of $5 million in 2014. That separate FSU budget is still part of that university’s general revenue appropriation and was not moved into the new budget entity.

The General Appropriations Act doesn’t include language that specifies which institution is charge of the new budget entity for the College of Engineering. If FAMU stops managing the engineering money and can no longer count those funds as a part of its overall budget, it could have an affect on the university’s bond rating. Investor services regularly take a university’s overall cash flow into consideration when they make their bond rating decisions.