The University of Missouri will use a hiring freeze and a 5 percent cut to all recurring general revenue budgets to close a projected $32 million shortfall for the coming fiscal year, interim MU Chancellor Hank Foley wrote in a memo Wednesday.

Foley wrote that the anticipated enrollment decline of 1,500 � equal to nearly 25 percent of the fall 2015 freshman class � will leave the campus short in the year that begins July 1, without accounting for budget cuts being considered by lawmakers.

�I am writing to you today to confirm that we project a very significant budget shortfall due to an unexpected sharp decline in first-year enrollments and student retention this coming fall,� Foley wrote in the memo addressed to �Dear university community.�

A 5 percent cut would eliminate about $20 million from the budget, still leaving MU with a $10 million shortfall after factoring in a small tuition increase. In his memo, Foley wrote that reserve funds would cover the remaining deficit.

�Realize most of our expenses are people,� Vice Chancellor for Operations Gary Ward said at the Regional Economic Development Inc. board of directors meeting Wednesday. Take �$32 million, and look at an average salary of $40,000, $50,000, and we�re talking about hundreds and hundreds of positions impacted.�

Further cuts could be coming if lawmakers reduce state support for the fiscal 2016 budget. On Tuesday, the Missouri House cut $1 million from MU�s allocation of state money and $7.6 million from UM System administrative funding. The bill passed the House in a final vote Thursday and will now go to the Senate.

The hiring freeze will allow only jobs �absolutely necessary to the mission� to be filled, Foley wrote. �Decisions to add faculty or staff must be exceptional, but will be left to the discretion of the deans, vice chancellors, vice provosts and the director of athletics.�

The university also will not grant pay raises except in conjunction with a promotion, Foley wrote.

The latest enrollment projections show a deeper decline than earlier estimates. The revenue shortfall will be ongoing as a smaller freshman class moves toward graduation, Foley wrote.

The campus will feel the cut to system administration because �critical functions provided by the system offices will need to be carried out on behalf of each of our campuses,� Foley wrote. The Columbia campus would absorb much of the cost, he wrote.

The gap cannot be closed with tuition increases because state law ties maximum increases to inflation, which was just 0.7 percent over the past year, he wrote. If approved at that rate, the extra tuition would increase campus revenue by $2 million, he wrote.

One step being taken to mitigate the loss is an aggressive recruiting program to reach students granted admission who have not confirmed their fall enrollment. More out-of-state recruiters will be added, and a new online admissions system will be created to streamline the process, Foley said.

�While these budget challenges will affect our ability to deliver teaching, research and service to Missourians in the short term, we also know that we have survived other stressors of this kind before,� Foley wrote.

Ward and the MU News Bureau did not respond to emailed questions seeking more details about the anticipated cuts.

At the REDI meeting, several board members encouraged other members to use political leverage to pressure lawmakers considering funding cuts. The general consensus seemed to be that while little could be done to stop the financial bleeding from dropping enrollment, there is time to salvage some of the university�s state funding.

�If you have any political clout with people outside of our district � we desperately need help there,� Columbia Chamber of Commerce President Matt McCormick told the group. �We�ve gone everywhere from being flipped off by senators while we�re sitting there meeting with them, to being cussed out by staff to everything you could possibly imagine. It�s been an interesting cycle.�

REDI board member and Lathrop and Gage LLP partner David Shorr reiterated the call for members to contact lawmakers. State Sen. Kurt Schaefer, R-Columbia, is a partner at the law firm.

�Many of us have a great deal of angst and dissatisfaction with what�s transpired in the last eight months,� Shorr said. �Right now, the issue isn�t about that. The issue is that we spend all of our time trying to generate jobs in the community, and at no point have I been faced with a question of losing 600 jobs,� Shorr said, using a number Ward used at the meeting.

Others had concerns about the ripple effects of the revenue drop.

�This impact is not just at the university,� Boone County Commissioner Karen Miller said. �It�s all of the student housing we have downtown. We�re going to have a whole lot of vacancy going on, and that�s only going to make things worse for our business community as a whole.�

This story was first published online on Wednesday, March 9, 2016 at 3:32 p.m.