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Dear Â鶹ÊÓƵ Community,

With the end of the semester approaching, we want to provide another update about our ongoing budget efforts for the current fiscal year (FY24) and the next fiscal year (FY25). The community engagement on the budget throughout this year has facilitated constructive feedback, informed our decision-making, and supported our ability to navigate financial challenges together.

First, a heartfelt thank you for the important work during the summer and early fall to address the FY24 budget shortfall, which was primarily driven by lower graduate enrollment levels, increased financial aid, and ongoing compensation increases. Across the university, careful and strategic budget decisions that focused on our mission, along with the use of reserves, helped close the gap for this year while maintaining support for our students, faculty, and staff. As of now, the remainder of FY24 (which runs through June 30, 2024) does not appear to require additional budget actions. Our continued focus on student enrollment, thriving, and retention, as well as attentive expense management, remain critical to our path forward.  

As a reminder, the approved FY24 budget was $894 million. It was adjusted to $864 million with the approximately $30 million difference due to lower than anticipated student enrollment levels and the corresponding effect on revenue. Spring 2024 enrollment numbers are still a challenge. However, our expense management, revenue generation in other areas, and targeted use of reserves are expected to enable us to continue our current path for the remainder of this fiscal year. At the same time, we continue advancing key investments to support our community, including compensation and benefits, the initial phases of the Student Thriving Complex (including the new campus store, where sales are up!), updated dining options (such as Qdoba and Panera), and plans for the new University Club.

As we look to the one-year FY25 budget and beyond, a major priority is aligning the budget to our current and future revenue structure. Higher education is changing rapidly and significantly, and this reality is affecting all universities and their budgets. Student enrollment and retention trends are becoming more challenging, which can negatively affect revenues. We must deliver on our mission in new and impactful ways to meet the types of academic experiences, outcomes, and services sought by students. Understanding and addressing these shifting dynamics, including through our budget, is critical. As changemakers, we are going to proactively shape our place in this future through strategic, collaborative engagement.

As part of emerging from the unique COVID-related impacts of the past few years, addressing the larger higher education trends, and charting our own future, we thoroughly explored the underlying assumptions in our budgets over the past 10 years. This work is helping us refine undergraduate and graduate enrollments, on-campus housing utilization, and dining and the associated revenues (remember, 92 percent of Â鶹ÊÓƵ’s revenues come from tuition, housing, dining, and fees). Informed by the historical data and updated forward-looking projections, we are revising these core budget assumptions to create a budget that more appropriately reflects how the university is operating and enables us to make strategic decisions about our future.

Based on revised assumptions for enrollment, particularly at the graduate level, and other areas, the FY25 budget is projected to have an approximately $25 million shortfall. We are pausing the annual one percent budget transfer (approximately $8.5 million) to our reserve accounts for FY25. This step lowers next year’s projected shortfall to the $25 million amount and addresses part of our immediate need; however, it does forgo replenishing reserves that we used this year to help close the FY24 budget shortfall.

We will address the remainder of the FY25 budget alignment through the budget submission process. Guidelines and targets will be provided to schools, colleges, and departments about ways they can align budgets with our resources. We remain committed to continued investments in our people, including financial aid, compensation, and benefits. The budget instructions are not prescriptive and will not direct specific personnel or program changes. Schools, colleges, and units will be asked to assess their budgets and will have discretion to decide on the steps required to meet the FY25 budget levels.

As we communicated in our October budget update, we are also using this year to conduct a thoughtful review of our work to help inform future budgets and decision-making. The review—which looks at academic vision; student support services; research; staff structures and support, ongoing investments in compensation and benefits; resource management; revenue diversification; and expense management and operational efficiencies—is based on collecting information and data. It includes working with our teams and using external resources including consultants to ask questions, obtain input from the community, and assemble information in a useful way that will support informed, collaborative decisions for the future. External resources and consultants support our efforts but do not make decisions. In response to questions we have heard about this work (including the recently announced Huron project), we are going to provide more information, including a fact sheet, in the near term. This work will provide extensive data for when the next president joins Â鶹ÊÓƵ, and we begin development of the FY26-27 budget. The goal and ultimate outcome of this effort will help us work towards future enhancements, meet our financial goals, and continue improving how we deliver on our mission.

The next several months will feature continued community engagement and development of the final FY25 budget. Budget forums will take place on and ; please register at the links to attend a forum. FY25 budget guidelines and instructions will be sent to schools, colleges, and departments on December 15, with submissions due on January 31. The final FY25 budget will move forward in two phases—tuition and fees will be submitted to the Board of Trustees for approval in February and the remainder of the budget will be reviewed in April.

Crafting a budget that advances our mission, supports our community, and aligns our resources is foundational to our work and our success. Thank you for your continued support and engagement in this important endeavor.

Sincerely,

Vicky Wilkins 
Acting Provost and Chief Academic Officer

Bronté Burleigh-Jones 
CFO, Vice President, and Treasurer