Office of the PresidentPresident Schulz’s MessagesLetter to CampusBudget planning in a COVID-19 world

Budget planning in a COVID-19 world

Dear Faculty and Staff,

As the University continues to navigate an environment filled with unknowns due to the impact of COVID‑19, it is critical that we develop a thoughtful approach to making decisions that will affect the community’s shared future. One of the most critical areas of our decision-making, not surprisingly, will revolve around university finances and budgets.

The economic fallout from the pandemic is—and will be—significant. While the state of Washington is still gathering economic data and analyzing it, we expect that public universities in the state, like other public agencies, will be asked to shoulder a share of the budget trimming that is to come.

As we begin carrying out various budget-cutting scenarios at WSU as part of our planning process, I am proposing that a set of core principles guide our decision-making. These principles are intended to enable us as an institution to stay focused on fulfilling our mission going forward. That is, we will prioritize funding to support the academic opportunities that are vital to the success of our students and other activities that support the citizens of our state and the economy.

Core Principles for Fiscal Decision‑making

  • We will prioritize core and mission critical activities to support high quality academic delivery and student success functions.

We will continue to prioritize student support services that are essential to helping students achieve their educational and career goals. Significant cuts in these areas would disproportionally affect our access and opportunity mission for all students and especially for our vulnerable students: first‑generation college students, rural students, low‑income students, students of color, students with disabilities, and other vulnerable student populations. Critical services, like academic advising and transition support, are essential to helping students successfully graduate.

  • We will work to sustain as many WSU jobs as possible.

We will consider a variety of options, including system‑wide salary reductions based on salary levels, with a goal of minimizing the impact on our lower-earning faculty and staff. We may also consider retirement incentives, changes to annual contracts (e.g., 12‑month to 9‑month contracts), alternative work schedules, and work shifts to prevent job loss. The goal will be to mitigate the impact on contingent faculty members as well as front‑line and mid‑level staff.

  • We will maintain a focus on revenue generation, including accelerating revenue enhancement opportunities, in fiscally responsible ways.

We will encourage innovation and entrepreneurship by assuring direct benefits to units willing to engage in responsible risk taking. Service centers and auxiliaries will need to adjust their expenditures and revise their revenue forecasts as well as identify new opportunities to meet or increase expected revenues. We will minimize budget reductions for units with a high degree of instructional load and other student-facing units. Larger cuts will come from administrative and support units.

Faculty and staff will need to spend more time on student recruitment and retention than we are used to doing. One of the most effective things we can do over the next couple of months is ensure we reach enrollment targets at all of our campus locations.

We also will look for ways to expand professional master’s programs and 4+1 programs in ways that position our students to be successful in the job market and also generate revenue for our campuses.

  • We will align the budget to achieve financial sustainability across all WSU campuses and locations.

We are experiencing a historic economic and budgetary situation that could not have been anticipated or planned for. We are all in this together, and we will align our resources to meet our highest priorities and achieve our goals.

We will act on behalf of the entire University, as all operating budgets and reserves belong to WSU, not to any single campus or department. While the University has always enabled leaders to manage their own budgets and reserves—and we intend to continue that practice—no entity will be exempted from participating in the budget exercises necessary to meet the governor’s budget directives and to achieve financial health.

The response to COVID‑19 will require that we develop a future budget model that achieves our strategic goals and reconsiders our previous funding and financial strategies to ensure fiscal health. It will require that we commit to leveraging our administrative structures and optimizing the talents and capacities at all of our campuses and locations to maximize the utilization of our human and financial resources and to promote efficient and effective services.

Scenario Planning

  • I am asking that all units prepare for a budget reduction of 10 percent.

This is an exercise in anticipation of what may be required to balance the state’s budget. The truth is, at this point we simply do not have enough information to know what our funding picture will look like.

 

In closing, know that you and your efforts are deeply appreciated. This entire financial exercise and cutting budgets is a painful process. I felt we had finally turned the corner in stabilizing the University’s budget and that we were ready to focus on building new programs. But COVID‑19 upended plans large and small.

As I said at the beginning of the pandemic, we will work together as a community to identify decisions that will best enable us to serve the people of the state and beyond. As our financial situation becomes clearer, we will communicate regularly and transparently. I am confident that we will persevere—and succeed—and I, like you, look forward to the day when we can operate in an environment free of COVID‑19.

Best regards,

Kirk Schulz, President
Washington State University