The University of Idaho anticipates an additional $8 million in budget cuts over the next two years, as the university’s revenue shortfall is expected to climb to $22 million by fiscal year 2022.
The cuts will be in addition to $14 million in budget reductions UI imposed this year, which will become permanent.
The increased deficit is pinpointed to an anticipated decline in tuition revenue because of UI’s student mix and current enrollment trends. On Wednesday, UI President Scott Green issued a memo detailing the university’s budget challenges.
“The bottom line is: we have been living beyond our means, and we don’t have enough resources in reserve,” Green stated in the memo. “As you know from managing your own personal finances, if you’ve got more money going out than is coming in, you’ve got two choices: increase revenue or reduce expenses. The same is true for U of I.”
With what UI has in the past called “dangerously low reserves,” and no increases expected in the two main revenue sources that make up the general education budget, the only remaining option is further cuts.
Possible budget reductions could include layoffs, not renewing contracts, salary reductions, furloughs and not filling vacant positions.
Other options outlined in the memo include:
Elimination of academic programs.
Centralizing services across the university.
Early retirement and voluntary separation incentives.
Outsourcing/contracting of some services.
“We will continue working closely with university leadership and campus shared governance groups on the details of the steps to be implemented as the budget reduction plans are implemented across colleges and units,” Green said.
UI’s two primary financial goals are to balance revenue and expenses, while rebuilding and maintaining adequate reserve funds.
In fiscal year 2018, UI used $54 million of its reserve funds to cover changes in accounting standards and operating losses. Then in fiscal year 2019, there was another $19 million shortfall.
Reserves for the general education budget for this fiscal year are expected to be at more than $4.9 million, according to information on UI’s website.
Green said that although UI’s budget woes may leave some “feeling discouraged,” the university is working to put its finances in order, so it can continue with its mission as a land-grant university.
“The challenges we face do not define who we are,” he said. “But the way we show up and manage through them does.”
To help find a fix to right the budget, UI implemented a Sustainable Financial Model Working Group. The group will meet for the second time on Nov. 12 and is expected to share its recommendations in early 2020.
Projects like the Idaho Central Credit Union Arena will not be affected by the cuts, since the capital project is financed by donations, student fees and funding from the state.
An open forum will be held on the Moscow campus next week, although specifics have not yet been released.
Tomtas may be contacted at firstname.lastname@example.org or (208) 848-2294. Follow her on Twitter @jtomtas.