President Hodge provided an update on the final fiscal year 2026 budget, which had been approved by the House, Senate, and Governor since the board's last meeting in May.

• Fiscal Year 2026 Budget Review: The President presented a side-by-side comparison of the proposed FY26 budget with previous years' approved budgets. The FY26 budget was built to mirror the FY25 working budget, incorporating internal adjustments and prioritizing discipline.
• Enrollment Assumptions: The FY26 budget assumed a flat undergraduate day enrollment of 2,295 students in the fall and 2,032 in the spring, which equates to a 2,164 annualized full-time enrollment, matching FY25 actuals.
• Fee Increase: The board approved a 4.8% fee increase, which was the mid-tier option recommended by the finance committee and the President's team. This increase is estimated to generate $1.14 million in revenue.
• Budgetary Adjustments:
  • Extraordinary Budget Requests (EBRQs): The $700,000 formerly allocated to EBRQs, which funded routine expenses like HVAC repairs and travel, was reallocated back into core operations.
  • New Budget Requests: Of the $2 million in new requests, all but $650,000 were funded. Notable unfunded requests included $67,000 for one-time academic affairs needs and a $490,000 increase for the adjunct budget.
  • Athletics and Student Meals: The $118,000 for preseason meals and travel for student-athletes and resident assistants (RAs) was covered using external student success funds, not the core budget.
• State Funding:
  • The final state appropriation for FY26 is $42 million, which is a $964,000 (3%) increase from FY25. This number is lower than the initial $45 million estimate used in the May budget, which was based on the Senate's higher proposal.
  • An additional $1.7 million is estimated from the new equity-based performance funding formula, a number that is expected to increase.
  • Student success funding was level-funded at about $14 million for the statewide public system. However, this is considered a mixed blessing as several targeted student programs were reduced or eliminated, including funding for hunger-free campus initiatives, high-demand scholarships, and mental health support. The university will need to use student success funding to close these gaps.
  • There were no new FY26 capital funds from the state. This is because the governor is supporting the Bright Act, which, if passed, would provide significant funding for deferred maintenance and campus infrastructure projects.
• Budget Outlook: The final FY26 budget maintains a thin margin, but the President affirmed that the university is on track to operate with a balanced budget. The FY25 operating loss of $1.5 million was offset by a $3 million increase in investments, resulting in a positive $1.5 million cash flow.

• Changing Student Demographics: The President noted that the traditional model of the 18-year-old high school graduate is shifting. The university is seeing more adult learners, graduate students, and a growing population of students with some college credit but no degree.
• Response to Governor's Executive Order: The President addressed the Governor's executive order stating that degrees are not necessary for 90% of state jobs. This highlights a need for the university to shift its focus from just degree programs to a broader student journey. The President emphasized that a degree is still a valuable tool for developing critical thinking skills and that the university must adapt to serve a workforce that needs to re-skill or up-skill.
• New Programmatic Approaches: To meet these new demands, the university is exploring more certificate programs and shorter-term credentials. For example, a new certificate in Artificial Intelligence (AI) is already being offered through the graduate and online education programs.
• Co-ops and Apprenticeships: There is also a strong emphasis on developing more co-ops and apprenticeships to provide students with hands-on, real-world experience, which is increasingly important to them.
• Student Demands: A recent internal survey of incoming students revealed that their top priorities are career preparation and understanding how a degree program will lead to a job. The desire for a social experience and friends was ranked much lower.
• Market Competition: The President concluded this part of the discussion by noting that there are 14 colleges and universities in the Worcester area alone. The key challenge for Fitchburg State is to demonstrate why a student should choose their institution over the others.

• Impact of the Bright Act: A board member asked about the impact if the Bright Act does not pass. The President explained that the FY26 budget does not rely on these funds. While some projects, like the next phase of the Conlon Hall window project, might be put on hold, the state would likely have to reallocate some money to capital projects.
• National Admissions Trends: The President addressed a question about national enrollment trends, noting that fewer children are being born, leading to a decline in high school graduates. The new challenge and opportunity for public institutions is to serve adult learners who need to re-skill or up-skill, as well as those with some college credit but no degree. The President believes Fitchburg State is well-positioned to meet these changing demographics.