Message from EVP Howarth and Provost Stevens - FY 2020-21 Budget Executive Committee Recommendations
- Author: Friday, May 8th, 2020
Dear WKU Faculty and Staff,
In late 2019, the Budget Executive Committee (BEC) began the fiscal year 2021 (FY21) budget development process. Budget request hearings took place, and tuition revenue projections began. WKU is on track to yield our largest one-year increase in freshmen in 18 years, thanks to a new aggressive scholarship model and large strides in the recruitment of Kentucky students. This had WKU poised to manage through an expected modest decline in overall enrollment and relatively flat state funding.
However, the worldwide COVID-19 pandemic has shifted the community landscape. While the full fiscal impact from this crisis is still solidifying for FY21, we now must prepare for an additional enrollment decline, along with a projected decline in state appropriations.
WKU will continue to offer high-quality educational experiences, facilitate lifelong learning, and prepare students for the personal and professional challenges such as those we are experiencing currently. Our present actions will enable our continued stability and serve as an example of how, as a community, we can face and overcome hurdles. In short, during and after this global crisis WKU will be well-positioned to support the success of our students, current and future. However, in order to address the serious financial realities we face in the months ahead, we need to make immediate and difficult decisions.
The BEC, with counsel and support of the WKU Board of Regents, has carefully developed and evaluated several budget scenarios to include best- and worst-case scenarios. Based on our most realistic projections, which we will outline with and seek feedback from our shared governance groups today, we have established a goal of $27 million in cost reductions from our projected $370 million budget University-wide for FY21. We recognize these budget targets will be challenging and will touch every aspect of the University, including academics, administration, operations, support services, and athletics. To address the shortfall, the BEC has recommended we take a two-pronged approach.
BEC Recommended University-Wide Actions:
- The hiring pause implemented earlier this year should continue. This pause should either defer or eliminate vacant faculty and staff positions. There should be limited exceptions, and such decisions should be made at the President’s Cabinet level.
- Travel, other than that needed to recruit and yield students, should be suspended. Extremely limited exceptions should be made, and such decisions should be made at the President’s Cabinet level.
- A strategic review is currently underway of all campus operations. Performance improvements and efficiencies will be identified, with the goal of decreasing overall operating costs of the University.
- Beginning July 1, 2020, tiered salary reductions should be implemented until June 30, 2021. Those tiers are as follows:
- Annual Salary of $50,000 - $99,999 reduced by 2.5%
- Annual Salary of $100,000 - $149,999 reduced by 5%
- Annual Salary of over $150,000 reduced by 10%
- A portion of FY20 carry forward should be reserved to address approximately $6M of the anticipated reductions.
BEC Recommended Division-Managed Strategies:
- To support strategic reductions, Deans and Vice Presidents should be assigned reduction targets and work in partnership with Provost Cheryl Stevens and Executive Vice President Susan Howarth to achieve them. These reduction targets should focus on but not be limited to procurement reductions, renegotiating major contracts, elimination of overtime/overload and one-time payments, and the strategic use of philanthropic gifts to offset expenses.
We recognize that we are in an era of significant financial uncertainty. If the country’s or state’s economic climate deteriorates further, we experience substantial enrollment declines, or there’s a recurrence of COVID-19 in the upcoming fall or winter, the University may be forced to take additional budgetary actions.
As we move forward, it is imperative that we do everything we can to encourage and enable both returning and prospective students to enroll at WKU for the summer and fall semesters. WKU is well positioned to be the first choice for many students, and our work to welcome them to campus must continue.
Over the past months, we have witnessed the WKU community come together in so many creative, caring, and supportive ways, and we are incredibly proud of the strong leadership displayed by our faculty and staff. Many of you face personal hardships relating to financial situations, caring for loved ones, working from home, and managing your overall mental health as we all deal with the effects of COVID-19. Please continue to take care of yourself and your loved ones. Working together, the Hilltopper family will overcome these challenges and emerge stronger on the other side.
Executive Vice President for Strategy, Operations and Finance
Provost and Vice President for Academic Affairs