MOSCOW — The University of Idaho has handed down departmental budget cuts to defray an expected $14 million shortfall for the current fiscal year.
UI Vice President for Administration and Finance Brian Foisy said the shortfall is the result of an increase in expenditures to cover employee benefits, as well as an expected drop in revenue related to out-of-state tuition. Foisy said a $7 million share of the deficit can be linked to the rising cost of employee benefits.
Foisy said the UI administration charges employee salaries and benefits against departmental budgets. For example, if someone makes $100,000 a year, UI administrators charge the department $100,000 to pay that employee’s salary, and then a fixed percentage of that salary is also charged against departmental budgets to pay for the employee’s benefits. Foisy said that fixed percentage is going up as the cost of the underlying services covered by those benefits increases.
“These are percentages that are approved by the federal government — so we have some negotiating ability with them, (but) for the most part, they set the rates,” Foisy said. “As those go up every year, if the percentage is higher, the charges out to the departments are more; if the percentage is lower, the charges out to the departments are less.”
Foisy said much of the rest of the shortfall is the result of a $5 million drop in out-of-state tuition because of increased participation in the Western Undergraduate Exchange program.
“The whole point of this WUE program is a student from Wyoming can go to school in Idaho, a student from Utah can go to school in Nevada, (etc.),” Foisy said.
“They attend at 150 percent of the resident rate, which is usually a massive discount from what non-(resident) students normally pay.”
Before 2018, Foisy said UI only gave WUE discounts to students from Oregon and Washington — two of a 15-state consortium organized by the Western Intercollegiate Commission for Higher Education.
Foisy said UI’s decision to honor reduced tuition rates for every WUE state came in 2018 and was not retroactive, meaning students already in the pipeline from WICHE states other than Oregon and Washington still paid out-of-state tuition. Now that UI is “all-in,” the new students in the program are paying the WUE rate, which is less than half of out-of-state tuition. The difference between those tuition totals for the current fiscal year has resulted in a roughly $5 million drop in revenues.
A decade ago, UI fully participated in WUE — but some time before 2018, the institution decided to limit the number of states it would honor, at which point WUE enrollment plummeted annually to where it is today. However, as word gets around that UI is again an affordable option for all WICHE states, administrators expect enrollment from those states to rise — possibly to previous levels.
“There was reason to believe that WUE enrollment could rebound back up to this high point where it had been prior to narrowing the program,” Foisy said, which he said would put the university in a significantly better financial position.
In addition to the $5 million and $7 million aforementioned impacts, the UI included a $2 million buffer in case estimates come in higher than anticipated, Foisy said.
Departmental heads were given control over how to address their share of the budget cuts. A couple of common tactics for reducing expenditures this fiscal year have been holding off on equipment maintenance and acquisition, and waiting to replace nonessential employees who recently left.
“One of the primary tools that’s been used for this hold-back is managing vacant positions,” Foisy said. “If you don’t fill that position, every single pay period that goes by, you’re saving salary and benefit dollars.”
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