The expected fiscal effects of the coronavirus pandemic on Washington State University took center stage in a virtual COVID-19 town hall event hosted by the school Friday afternoon.
When the university announced last week that fall classes would be delivered almost entirely online, WSU spokesman Phil Weiler said some were under the impression the move would save the school money. However, university leaders said shortly after the announcement that tuition would not be lowered, saying cost to the university and quality of instruction has not diminished.
“Certainly it’s not less expensive and more specifically, as someone who has taught courses in both a remote environment and face-to-face, it’s actually much more challenging and many more hours,” WSU Provost and Executive Vice President Elizabeth Chilton said during Friday’s town hall. “Faculty are still providing live instruction, most of them at the appointed time, and they’re making themselves available to (students) … they’re still interacting with them one-on-one and in groups.”
As any drop in tuition revenues would have significant budgetary implications, WSU Vice President for Finance and Administration Stacy Pearson said the school is watching enrollment numbers for the fall closely. She said while the pandemic does appear to have arrested a yearslong streak of enrollment growth, early metrics predict the number of students in the fall will be only slightly below those of previous years.
Pearson said cuts to other important revenue streams have been more significant.
Pearson said state officials told WSU to expect a drop in state appropriations of $37.2 million in May — about 10 percent of the school’s budget. She said those cuts were then handed down to deans and other department heads.
“Each area’s leadership will determine how to absorb the final reduction as they prepare for budgets, not only for fiscal year ‘21,” Pearson said. “Our message from the state when we received our reduction was that they anticipated, based on the economic indicators, that we would probably be looking at these types of reductions for the next two fiscal years.”
Person said budgetary practices that were put in place years ago have helped the university maintain its footing in the face of these cuts and revitalized departmental reserves that may now help cushion the blow.
About three years ago, the university announced that it was spending more than it was bringing in and pulling money out of reserve funds to offset the shortfall. In light of this, the university system embarked on a three-year “fiscal health recovery plan” in an attempt to right the ship. That effort ended June 30 and because it went better than expected, the university has been able to inject about $30 million back into reserves.
Pearson said those departments that underspent their budget will be allowed to use 5 percent of their remaining “carry-forward” balance to help reduce the amount they have to cut.
The move is expected to allow the university as a whole to neutralize about $5 million of its $37.2 million reduction target.
Weiler said WSU is also identifying central savings like those realized through reduced utilities usage, and looking to restructure current institutional debts for more favorable terms.
Pearson said the school does not expect further reductions from the state at this time, but that could change if lawmakers call a special legislative session.
“The good news is we did receive federal funding through the CARES Act as well as recently we also got some state emergency funding to help us get through fiscal year 2020,” Pearson said. “For fiscal year ‘21 though, it’s a little less certain just because we don’t know the status of some of those federal funds related to COVID, but we are keeping track of those expenses and monitoring them.”
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