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Jan. 29, 2021

Dear Faculty and Staff,

As you will recall, last fall we made a commitment to:

• Be transparent with our financial situation and how we will address gaps at a campus wide level.
• Minimize impacts to our institutional mission by not cutting budgets more or sooner than is necessary.
• Approach budget cuts strategically rather than implementing simple across-the-board cuts.
• Support units’ ability to plan by avoiding additional midyear cuts unless absolutely necessary.

The preliminary outlook for fiscal year 2021-22 includes a lower base budget due to the smaller fall 2020 incoming class and a decreased retention rate that will affect next year and beyond. We are facing increased mandatory costs, including financial aid, pay equity adjustments, and debt payments.

In addition, we are prioritizing ending the furloughs and temporary pay reductions implemented earlier this fiscal year, as well as an increase to the minimum hourly wage across campus.

While tuition and state revenue losses this fiscal year have been substantial, our budget planning this year has proven to be on target. As such, we do not anticipate needing to implement further cuts in the current fiscal year.

The combination of the increased costs and reduced revenue, however, leave us with a projected budget shortfall for next year ranging from approximately $30 million to $48 million. We are sharing with you today that, after careful analysis, it is clear that we need each academic and operating unit to proactively develop planning scenarios for continuing budget cuts of 3%, 4% or 5% for fiscal year 2021-22.

While the cuts made earlier this fiscal year were one-time, temporary cuts, the planning parameters for fiscal year 2022 include permanent, or continuing cuts.

We will have more accurate projections as we get further into the spring, however, we do not anticipate that the final cuts will drop below 3% or exceed 5%.

What we are doing

College, school and academic and administrative support unit leaders are beginning the work of planning for 3%, 4%, and 5% reduction scenarios. The current timeline for planning, decisions, and implementation of cuts is as follows:

• Early February – campus leadership will develop and provide guiding principles to help direct unit-level reductions. These principles will be grounded in institutional priorities such as diversity, equity and inclusion; improving student, babyÖ±²¥app and staff retention and ensuring we can continue to meet our mission as a public teaching and research university.
• Mid-March – campus units submit preliminary plans for their continuing cut scenarios
• March-April – campus unit leaders will meet with Katrina Spencer, associate vice chancellor for budget and finance; Ann Schmiesing, executive vice provost for academic resource management; Regina Houck, director of budget and finance for academic affairs, and Katie Walker, director of budget management for budget and finance to review their continuing cut plans and discuss questions and concerns
• April/May – cut plans are finalized based on updated enrollment and state funding information
• July – fiscal year 2022 budgets take effect, including the planned cuts

Academic and administrative units will have broad discretion on how to make the requested reductions. Some considerations include postponing new initiatives, reducing discretionary operating costs (e.g. travel), prioritizing the use of gift funds, and potential savings via collaboration and/or consolidation of activities. The opportunity and the long-term goal is to build greater fiscal resilience in support of the university’s academic and research mission as a top-tier public university.

Next steps

While the reality of our situation is not unanticipated, the outlook ahead of us is challenging. There is no doubt that reduced budgets will create more stress in an already stressful time. We will need to continue to seek out new ways of meeting our mission together while being responsive to these constraints, at a time when people and budgets already feel stretched thin.

At the same time, we are seeing increases to applications for the fall 2021 incoming class and the governor’s budget request for fiscal year 2022 includes the restoration of higher education funding to pre-COVID levels. We expect to have more information about enrollment and state funding in late spring. We are hopeful this means that the budget cuts will remain within our stated projections.

By working and planning together and continuing to focus on using budgets strategically and working more closely as a campus community to serve our mission, we believe our university will, with time, emerge stronger from the setbacks of the last year. We remain deeply grateful for, and inspired by, your continued sacrifices, hard work and service to our students, each other and the public.

Sincerely,

Russell Moore
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Patrick O’Rourke
Chief Operating Officer