Wright State University trustees Thursday approved a plan to raise some tuition, cut expenses, reduce staff through attrition and dip into dwindling reserves to shore up a budget shortfall created largely by overspending.
Addressing trustees and several hundred faculty and staff members, university chief financial officer Jeff Ulliman said WSU overspent its budget by $34 million this year.
“We simply need to adhere to our budget,” he said.
Trustees approved the plan he presented, including $27.7 million in budget cuts over the next two years — $8 million coming through staff attrition — and pulling $18.9 million from reserves.
Trustees raised tuition for graduate and out-of-state students by 3 percent, but are prevented by state law from raising undergraduate tuition for in-state students.
Ulliman said the university is looking at one-time deals — such as possibly switching its soda vendor — to boost the university’s reserves, which officials have spent down from $162 million in 2012 to a projected $40 million by 2018.
WSU trustees said this was the first time they were told how far over-budget the university went in the fiscal year ending this month. They requested more regular updates next year.
Trustees approved a $311 million budget last summer. Revenues came in at about $304 million, largely because university officials over-estimated how well their investments would perform. Expenses ballooned to $338 million, mostly because of the creation of unbudgeted positions and tuition assistance given to students.
“It’s pretty clear when you put those numbers up there that the reason we’re in this position is because of over-spending of the budget that occurred a lot last year,” said Doug Fecher, chairman of the WSU board of trustees finance committee.
Trustees approved a $333.8 million budget for the fiscal year starting next month. This includes most of the $8 million for the presidential debate Wright State is hosting in September, which school officials maintain will be paid entirely from donations and debate revenue.
Faculty members expressed concern that academics will bear the brunt of the cuts, not administration or athletics.
Rudy Fichtenbaum, WSU economics professor and national president of the American Association of University Professors, chided administrators for letting athletics routinely spend millions more than its budget.
“If that had happened at any college, the dean would be fired,” he said.
In response to questions from another faculty member, Ulliman said the university has not budgeted for any fines or other costs related to an ongoing federal immigration investigation at the university. Ulliman said the investigation was one of the unexpected expenses that put them over budget this year, but “my understanding is it’s towards the tail end.”
The investigation spurred lawsuits, paid staff separations, and hiring a law firm and an auditing firm. WSU announced Thursday it’s hiring a new compliance director to help make sure the university is in line with state, federal and university regulations and policies.
University leaders have given department and college directors a month to identify targeted cuts budgeted for a total of $6.6 million in the coming fiscal year. They also are hoping to save $5.5 million through attrition — not filling positions as they come open — encouraged by a retirement incentive plan.
The university has about 3,800 employees. University policy requires the school to give unclassified staff up to a year’s notice before eliminating their position to save money. Union faculty can only be laid off if the university’s financial situation threatens the school’s existence.
The budget includes a 1 percent pay raise for non-union staff, and for union employees to get whatever their contract stipulates.
Wright State President David Hopkins said the university’s budget woes are due in part because the state has reduced the funding it provides to Wright State by $124 million since 2008. The university’s enrollment growth has been slow in recent years as the economy has improved. Current enrollment is 14,988.
“We kept spending at levels that we can’t sustain,” Hopkins said.
“We were trying to be entrepreneurial. We were trying to have an impact and get more students to the finish line. Impact the community,” he said.
“We just got to be real basic and say some of the things we want to do we don’t have the funding for it, so we got to protect our core mission, protect our highest priorities and we got to stop doing some things.”
Wright State budget
2016 budgeted revenues: $311.1 million
2016 budgeted expenses:$311.1 million
2016 actual revenues: $304.2 million
2016 actual expenses: $338.4 million
2017 planned budgeted revenue and expenses: $333.8 million
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