Wright State University plans to use budget cuts, attrition, tuition increases and cash reserves to shore up its financial shortfall, according to budget documents released this week.
In addition to 3 percent tuition hikes for graduate and out-of-state students, WSU trustees will be asked Thursday to approve a $12.1 million “remediation plan” and take $15.6 million from the university’s reserves to make ends meet in the fiscal year that starts July 1.
The documents lay out plans for additional cuts and expenditures from reserves in 2018.
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The documents don’t specify what will be cut. Specifics on the plan will be presented at a WSU Board of Trustees meeting at 8:30 a.m. in the Student Union. University officials declined to comment prior to that presentation.
“The University is at a point where immediate financial adjustments are required,” says a budget summary. “In addition to the reduction in net assets, the university’s cash and investment balances, or reserves, have been declining rapidly since 2012.”
WSU President David Hopkins first announced the budget shortfall in April, pledging to make targeted budget cuts “people-friendly and preserve salaries and benefits as much as possible.”
Wright State has about 3,800 employees. Budget documents indicate non-union employees will get a 1 percent pay raise, and union workers will get what is called for in their contracts.
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Hopkins said the university will need to cut 6 percent of its base budget over two years. He blamed reduced state support and undergraduate tuition freezes, modest enrollment growth — budget documents estimate enrollment growth at 1.6 percent next year — and a sporadic economy.
Budget documents show that this year’s budget fell short from the projected $311 million in revenue and expenses approved by trustees last year. Revised estimates put actual revenue at $304 million and expenses at $338 million. The proposed FY 2017 budget is $333.8 million.
“Something has gone amok at that school,” said Richard Vedder, an economist at Ohio University who studies higher education funding.
Vedder said it’s unusual for a university budget to miss the mark by that much, especially on the expense side of the ledger, which is largely governed by labor contracts.
“What you can’t plan are legal settlements, expenses of a totally unexpected nature that needed to be made because of a problem,” he said. “Either that or Wright State had the absolute worse financial discipline of any university I’ve ever heard of.”
Wright State is not the only Ohio university dealing with budget pressures. The University of Akron’s president announced he’ll resign this week amid pressure of, among other things, how he dealt with a deficit there.
Jim Bennett, vice chancellor of finance and data management at the Ohio Department of Higher Education, wouldn’t comment on Wright State’s budget. But he said many schools are struggling with enrollment pressure, though he said state funding has steadily increased in recent years.
“It wouldn’t be appropriate to say that state support for higher education at the state level has been declining in recent years and it is responsible for any institution’s budget situation,” Bennett said.
WSU faculty union president Martin Kich said Wednesday he hopes university leaders focus cuts away from the university’s core mission of instruction.
“What we’re hoping is a demonstration of some serious commitment to looking at things other than the instructional budgets, (things) that are costing the university more money than the university is getting benefit from,” he said.