WSU moves ahead with budget reductions

Washington State University released new information this week detailing how it plans to meet a reduction of $37.2 million in state appropriations for the coming fiscal year.

In a letter sent to faculty and staff Monday, WSU Vice President for Finance and Administration Stacy Pearson said the school will not require system-wide furloughs to cut costs and individual departments would be allowed to tap into savings to help meet reduction targets.

In May, state officials told WSU to expect a drop in state appropriations of $37.2 million — about 10 percent of the school’s budget — because of fiscal fallout related to the coronavirus pandemic. WSU leaders say budgetary practices that were put in place years ago have helped the university maintain its footing in the face of these cuts.

WSU Spokesman Phil Weiler said today that 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, he said 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, Weiler said.

“What that means is, we’ve got a little bit of flexibility,” Weiler said. “If a particular unit has underspent their budget, they have what’s called a ‘carry-forward’ … each of those units that have a carry-forward are allowed to spend up to 5 percent of that to help reduce the amount that they have to cut.”

Weiler said the move will allow the university as a whole to neutralize about $5 million of its $37.2 million reduction target. He said while it has pushed the timeline for WSU to finalize budget reduction strategies back a little bit, it also provided latitude for university leaders to use departmental savings to cushion the blow.

The letter also said WSU will not implement a system-wide furlough. Weiler said this is due in part to the possibility that such a move would have a disproportionate effect on employees near the low end of the payscale. Instead, he said university deans and vice presidents will realize savings through other means, like leaving vacant positions open and reducing hours of some full time employees.

Rather than hand down mandates from the top, Weiler said WSU President Kirk Schulz elected to allow leaders of individual units to identify where cuts could be made. He said the rationale was that those closer to the effect these decisions would have are likely the best equipped to identify how to reduce their individual budgets without disrupting operations.

When reduction targets were handed down, Weiler said Schulz issued four principles to guide the process. These principles sought to prioritize academic instruction and student success, protect as many WSU jobs as possible as well as programs that generate revenue and ensure that cuts were fairly distributed across all campuses.

“There’s always a risk that if something’s done from the top down, that the decision will make sense on the face of it, but you won’t realize what the negative ramifications are,” Weiler said. “That’s why the president instructed all the deans and the vice presidents to come up with their own plans.”

Monday’s letter said WSU identified around $2.5 million in “central area savings,” like those related to reduced utility usage on campus because of the pandemic. Weiler said those savings will be used to help offset reductions in certain critical areas supporting education delivery and student success. This includes the WSU library, the College of Arts and Sciences, which serves the majority of undergraduate students, and WSU’s government relations arm, which lobbies on behalf of the school to the state legislature.

“We want to make sure that we are doing what we can to represent our needs with the legislature,” Weiler said. “The legislature is looking at potential future reductions as well as appropriation of state funds — either (in) a special session or at a minimum, the next legislative session.”

Weiler said WSU and other agencies will be paying close attention to state tax revenue forecasts to gauge the possibility of future cuts. The letter states WSU’s budget office will provide final reduction targets for the coming fiscal year by Aug. 7.

Scott Jackson can be reached by email to sjackson@dnews.com.