Update on Fiscal 2021 Budget and Fiscal 2022 Budget Planning
A message from the University Budget Committee
The university, along with many of its peers in the higher education sector, has been through a difficult year unlike any other we have faced. First and foremost, we want to thank the entire community for its extraordinary efforts and sacrifices during this challenging time. This collective effort has allowed us to continue to deliver an outstanding education to our students, while simultaneously focusing on everyone’s health and safety. As the university prepares to provide the Finance Committee of the Board of Trustees its proposed budget for the next academic year (2021-2022), we write to provide an update on the budget and planning process.
As we approach the end of Fiscal 2021 (June 30, 2021), we continue to expect enrollment, net tuition revenue from degree-seeking students, and total revenues from this current year to be lower than the pre-pandemic budget by approximately 10%, 20% and 30%, respectively. As a result, the university spent approximately $55 million more than its revenues to maintain its teaching and research mission during this extraordinary time, which will be partially offset by up to $20 million in Higher Education Emergency Relief Funds (HEERF) from the federal government.
As we prepare to transition into our next fiscal year,which begins on July 1, 2021, the budget process and resource allocation was necessarily very focused on known and critical needs associated with the safe return to campus in the fall. Going forward, we are working to achieve a much more strategic, collaborative, and inclusive budgeting process, resulting in a multi-year budget that is aligned with the university’s strategic academic priorities and the initiatives that will emerge from our new strategic plan. With preparations for the strategic planning process beginning this spring, we intend to start building this new process in collaboration with the Budget Advisory Council as well as the Faculty and Staff Senates.
The proposed capital and operating budgets for 2021-2022 will be finalized only after review and adoption by the full Board of Trustees in May. However, we think it is nevertheless important to share a preview of some of the major elements of these budget proposals even though none of these decisions can be finalized until we have received the approval of the budget. First, we are pleased to let you know that the proposed budget is balanced. Like every other year, it is based upon a set of assumptions; however, this year there is much more uncertainty than in any other year in recent memory.
We are very pleased that new student applications are strong–bolstered by the deferrals from Fiscal 2021–indicating that prospective students continue to value the academic programs and experience we offer. Accordingly, the budget assumes that our enrollment and net tuition revenue will improve by approximately 7% and 24%, respectively, from Fiscal 2021, but will still be 5% and 3% lower, respectively, than the actual achieved in Fiscal 2020. However, it is important to note that there is still a significant amount of risk, especially given the large number of international students who seek to join us. It may be difficult for them to acquire visas, or undesirable for them to study in the U.S. given the current political dynamics of xenophobia and the culture it creates. Therefore, our enrollment, gross tuition and residence hall revenue may be lower than budgeted and our financial aid expenditures may be higher. In addition, the university has experienced higher-than-inflationary increases in certain expenses including medical benefits, rent and real estate taxes, and insurance, which are likely to continue in the future. Accordingly, the proposed budget includes a contingency reserve to provide some protection against these risks. The budget also includes a reserve to fund strategic academic priorities that will emerge from the strategic planning process.
The budget proposal also includes the restoration of salary reductions to pre-pandemic levels and retirement contributions for affected faculty and staff. Although, It is the university’s intent to proceed with this at the start of the new fiscal year, it is important to be aware that it is subject to change based on enrollment and contingent upon the approval of the budget in May. Finally, after cutting back in Fiscal 2021 to conserve cash, the capital budget assumes a higher level of investment in our facilities to ensure a safe return to campus and address deferred maintenance.
We will provide another update in late May after the Board of Trustees meeting to let you know the final outcome. Thank you for your support.
University Budget Committee 2020-21
As of February 2021
Bea Banu, Chair, Food Studies
Professor of Philosophy and Food Studies, Schools of Public Engagement, Faculty Representative
Craig Bernecker, Director, MFA Lighting Design Program, Professor of Lighting Design
Parsons School of Design
Stephanie Browner, Interim Provost and Executive Vice President for Academic Affairs
Jin Kim, Deputy Provost for Academic Planning and Administration
Ulrich Lehmann, Associate Professor of Design Practice and Theory, Parsons School of Design
Tokumbo Shobowale, Executive Vice President for Business and Operations
Joel Towers, University Professor of Architecture and Sustainable Design
Loretta Ferrari, Assistant Vice President for Budget Planning
Paula Maas, Associate Provost for Institutional Research and Decision Support