In an email and web post titled "Budget Update," Western Illinois University President Jack Thomas announced on Thursday that the university is in a structural budget deficit and expenditures are outpacing revenues. Dr. Thomas said that as a result, WIU plans to cut $5 million from this year’s budget and a total of $21 million from the budget for Fiscal Year 2020, which begins July 1, 2019.
WIU Budget Director Letisha Trepac said told Tri States Public Radio that Western is estimated to have a budget deficit of between $5-10 million this fiscal year, which ends June 30, 2019.
Trepac said efforts to cut $5 million out this year’s budget are already underway.
“We are down in personnel expenses right now, trending down compared to last year,” Trepac said. “We reduced operating budgets by 25% so we are hoping to be down on our operating side as well. We recently issued the retirement incentive so we are expecting attrition savings through that program. We are also pulling back on our p-cards [university credit cards] and lowering the spending threshold for approvals so that should also help lower expenses.”
This fiscal year, the university expects to bring in nearly $56 million in tuition, fees, and other revenue plus an additional $47 million in state appropriations. Personnel expenses account for nearly $90 million of spending and operating expenses account for about $25 million.
$21 million in budget cuts for FY2020
Trepac said in an effort to reduce the University’s overall spending by $21 million in the 2020 fiscal year budget, the vice presidents for academic affairs, student services, administrative services, advancement and public services, and the Quad Cities have been designated an amount to cut and tasked with identifying ways to make those reductions.
Those recommendations are due by the end of November with the exception of academic affairs, which must submit plans by December 7.
When it comes to deciding where to cut, Bill Polley, the interim VP for Administrative Services, said each area will have to evaluate “the level of service they provide.”
“It’s going to vary from one area to the other," Polley said. “In the case of facilities, the level of maintenance that we have the ability to keep up. That’s just one area. Every area is going to be different.”
Trepac noted that Western’s athletic programs will be affected in that, “they are funded from personnel on the appropriated side. They get 1.5% of our budget. So, because we are reducing our appropriated budget they will naturally have a reduction as well,” Trepac said.
How many university layoffs?
“We don’t have any firm numbers on that at this point,” Polley said. “Personnel is about 80% of the appropriated university budget. So when you’re talking about cuts that are that large, $21 million is roughly 20% of the total university appropriated budget, it is impossible to avoid personnel reductions as a part of that number."
Polley said the $21 million in cuts will include operating expenses. He also said the $21 million budget reduction goal does not account for any program elimination that might result following the Academic Program Elimination Review (APER) committee report and future decisions by the administration.
WIU’s financial challenges
State appropriations for higher education funding have been on the decline for the last several years and the situation was exasperated by the nearly two year state budget impasse.
“If you go back 15 or 16 years or so, Western and most of the other universities like us were about 60% funded by state appropriations and 40% funded by tuition. In the past 16 years that has exactly flipped," Polley said.
That coupled with steady declines in student enrollment and thus less revenue from tuition and fees have significantly impacted Western. Trepac said the proposed $21 million budget cut is significant and will be felt but is necessary so that WIU can get its expenses in line with its revenue.
In his announcement to the university community, President Thomas said that budget reductions must be paired with institutional growth. He said announcements are forthcoming regarding a university-wide initiative to increase student enrollment, retention, and graduation rates.