WIU: Financial Picture Remains Bleak
New Illinois Governor J.B. Pritzker has said he will prioritize funding for the state's colleges and universities. Nonetheless, the Western Illinois University administration has said more deep budget cuts might be necessary.
Western’s finances have been hurt by a combination of declining state financial support and declining student enrollment. The university said it finished last fiscal year with a deficit of $4 million, leaving it with a reserve fund of only around $5 million.
Administrators have announced that their projections show more deficit spending for next fiscal year, so as a result they must cut $5 million in spending this fiscal year and around $21 million next year. Details won’t be announced until after Governor Pritzker gives his budget address in February.
Tri States Public Radio spoke with two of the WIU administrators tasked with overseeing school’s finances: Budget Director Letisha Trepac and Interim Vice President for Administrative Services Bill Polley.
Here are a few excerpts from the conversation:
TSPR: Do we have figures on how many people took advantage of last fall’s early retirement program and how much it might save the university?
Trepac: We do not have the final savings yet because the vice presidents have to identify which positions will have to be replaced out of that. I can tell you that if none of the positions were replaced, to give you an idea, it would save annually $3 million. So there were $3 million worth of salaries.
(Editor’s note: 57 employees took advantage of the early retirement program)
TSPR: Why such a drastic increase in the amount you need to cut, from $5 million (this fiscal year) to $21 million (next year)?
Trepac: We deficit spent in Fiscal Year ’18 (July 1, 2017 to June 30, 2018). So our budget was already skewed. Our budgeted expenditure was greater than our budgeted revenue. That revenue continues to decline as enrollment declines. So the $21 million was identified by projecting what we anticipate revenue to be in Fiscal Year ’20 (July 1, 2019 to June 30, 2020).
TSPR: Is the university projecting enrollment will be down considerably next school year?
Polley: Yes. The enrollment will almost certainly be down. It would take a very large increase in the number of new freshmen. Our projections are based on keeping the number of freshmen and transfers – new students – level in the fall of ’19 compared to this past fall of ’18. Because we’ve been experiencing enrollment decline over several years, we have been graduating larger classes than we’re taking in. So we know that even if we keep our number of new students level this fall, that because we’re graduating a larger class than the ones we’re taking in, that total enrollment would still be down. So the best projection that we have right now is that total enrollment will still be down but new students hopefully will be level.
In response to another question, Polley said everything is being looked at as WIU tries to save $5 million this fiscal year and $21 million next year. That comment raised another question:
TSPR: If everything is being looked at, why are administrators not being asked to take furlough days in the current fiscal year (as they did the past three years)?
Polley: That’s still on the table. Everything is still being looked at. So while I can’t comment on anything specific like that, it’s still on the table.
TSPR: With a new governor in office now, what is the university hoping to hear from him in his budget address? Is there something he can say that perhaps will allow you to avoid such drastic cuts?
Polley: We’ll certainly be listening to what the governor has to say in the budget address. We have to keep in mind also that the budget process is a long process that goes throughout the spring. The budget address from the governor is really just the first step in that process. A lot of things can happen in-between that and the final outcome. So the budget address itself will not provide any certainty that we need. But it will be useful information. And of course, the other thing is that we will definitely be in Springfield this spring talking to both parties, both (chambers), to make the case for Western. And to explain where we are and what funds we need to keep the university going. And we expect those conversations to be productive as we go through the spring.
TSPR: What would you tell decision-makers in Springfield? What message do you think they need to hear from Western?
Trepac: The message that we’ve been explaining is the constraints that it’s putting on us as a university in order to provide excellent services to our students by not being funded sufficiently at the state level. We’ve also gone into detail about how the reductions that we are proposing could impact our university. From my standpoint, that’s the message we will continue to take to Springfield and advocate for sufficient funding for Western Illinois University and all public universities across the state.
Polley: And we’ll tell them, as we do each time, of the fantastic programs that we have at the university, the great things that are going on, our signature programs. And just to make the case that not only Western but public higher education in the state of Illinois is something that needs investment. A statistic that I’ve been citing regularly is that if you go back to 2002, the funding breakdown of our appropriated budget at Western was approximately 60% from state appropriations – taxpayer dollars – and about 40% from student tuition. And today that’s basically reversed. And that reversal of those figures over the last 16 years has taken a toll and it’s just been slowly eating away at us. And as the enrollment declines have happened over the last few years, that’s what has started to put the pressure on Western’s budget. And the last straw really was the budget impasse when we received roughly about one year’s of appropriation during a two year time span. That was devastating to the university because it essentially depleted the reserves that we had.
TSPR: Will the funding cuts that have been discussed for Western help you build up your reserves?
Trepac: No. That’s just keeping expenditures in line with revenue. We are not building in any amount to be funneled to our reserve.
Polley: Absolutely not at this point in time. Having that minimal $5 million in reserves is considered a very low amount but we can manage at that amount for the time being.
TSPR: Are the cuts being talked about for this fiscal year and next related at all to the plans to reorganize the university?
Polley: There are some reductions that will happen due to reorganization in terms of office staff if there’s any sort of consolidation in different departments. Those are certainly possible. The academic reorganization will have some budget impact but that is not the only reason for the reorganization.