Washington State University Budget 2009-2011
Report to the WSU Community May 1, 2009
Financial Environment
Washington State University became aware early in 2008 of growing financial distress in the United States that, since then, has become the current global financial crisis. WSU began cutting costs and realizing savings as early as February 2008, long before many universities in the nation. Because of these early proactive steps, WSU was able to handle required cuts in its 2008-2009 state budget without laying off a single person. Instruction, the Libraries, and the urban campuses were exempted from that initial round of budget reductions while the administrative side of the university took the lion's share of the reductions.
The financial environment worsened dramatically in 2009, and the State of Washington soon found itself facing a $9 billion shortfall in revenues to fund state programs. Public higher education was warned to expect budget cuts of up to 20 percent in state appropriations. President Elson S. Floyd briefed WSU faculty and staff on the growing financial challenges through a series of email updates including one on February 6, 2009 , laying out the 12 percent and 18 percent budget cut scenarios the University was preparing for the Legislature.
Legislative Environment
By early April 2009, Washington State University and the state's other public universities were facing the deepest higher education cuts in state history. The Executive Budget released by Governor Christine Gregoire on December 18, 2008, had proposed 12 percent cuts to WSU's state budget. At that time, the state budget deficit was forecast at $5.8 billion. The House and Senate were forced to propose much deeper cuts.
By early April, Governor Gregoire, along with President Floyd and other public university presidents were advocating for reductions no greater than the 20 percent cuts proposed by the Senate coupled with other actions to mitigate some of the impact of the cuts, as outlined in an Olympia Update.
Governor's Budget for WSU outlined in Olympia Update
Senate Budget with 20 percent cut for WSU outlined in Olympia Update
House Budget with 29 percent cut for WSU outlined in Olympia Update
See all of the Olympia Update reports for the 2009 Legislative session.
University Budget Planning Process and Strategy
Planning for the budget reductions that have now been confirmed has been underway for some time. Here is how WSU arrived at the preliminary budget released May 1, 2009.
President Elson S. Floyd and Provost Warwick M. Bayly appointed a University Budget Committee in late 2008. They charged the committee with the responsibility of examining all of the University's operations and helping to identify potential areas for reorganization or reduction in response to the expected budget reductions. See the charge here .
The committee has broad representation from across the University, and it includes deans, faculty, and staff. See the membership here .
In December, this committee established seven guiding principles with regard to the budget. They are as follows:
- Everything is on the table
- Protect people to the extent possible
- Maintain student access without compromising quality
- Emerge from the financial crisis as a stronger institution and as quickly as possible
- Strategic priorities should guide the decisions
- Decisions should be mission-driven
- Diversify financial resources where possible and increase efficiency and productivity
Subsequently, the University’s senior leadership team, including deans, chancellors and vice-presidents, developed four criteria by which budget decisions should be made. Such decisions should:
- Focus on the role of the research university
- Enable the creation of new discoveries (both basic and applied)
- Move us toward AAU-like status
- Sustain excellence
Important University planning was already underway. Work on the Academic Area Program Prioritization (A2P2) process started long before there was a budget crisis. This work was not begun with budget reductions in mind, but rather to realign our academic resources to focus on the future. We realized early on that we should not try to be all things to all people. This academic prioritization plan followed an update of the University's strategic plan. These documents served as invaluable roadmaps as work on the budget reductions ensued.
Draft plans from each area of WSU were developed after the unit leader proposed and negotiated a reduction number for his/her area with the President and the Provost. The reductions were not to be across the board, but rather strategic choices.
Eroding the quality of our academic programs is fundamentally unacceptable, and as a consequence WSU has chosen to make vertical cuts in a very strategic way throughout the University rather than across-the-board horizontal reductions. A number of programs, services, and personnel will be constricted as a direct result of this budget reduction.
Given the size of the cut in state support, the reductions were expected to impact both currently filled and vacant positions, and to reduce the number of programs and services WSU offers. However, the carefully planned reductions will allow WSU to emerge as a stronger university when the economy and state funding improve.
Final Legislative Budget
The House-Senate compromise operating budget for Washington reduces WSU's state funding by 22 percent, but uses federal stimulus dollars and tuition increases for all students to partially offset those cuts. It provides that half of the cut will be offset by $15.7 million in federal stimulus dollars and the assumed tuition increases, leaving WSU with a 10.4 percent net budget reduction of $54.2 million for the 2009-2011 biennium. A 10 percent reduction was the target that Gov. Christine Gregoire supported in negotiations with the House and the Senate.
The $54.2 million net cut is the largest dollar reduction to the university in history. But the Legislature seriously considered much worse scenarios for WSU. “We are fully aware of the economic difficulties facing our state and nation. Under those fiscal conditions, the Legislature did the best it possibly could do to protect higher education,” WSU President Elson S. Floyd said in response to the final budget .
Tuition
The University advocated flexibility with regard to tuition in order to protect the affordability of a WSU education for students. In the end, however, the biennial budget for all public, four-year schools that the Washington Legislature approved is built on the assumption of a 14 percent increase in resident undergraduate tuition in each of the two years. As a result, for the 2009-2010 academic year, resident undergraduate tuition would increase $870, from $6,218 to $7,088. The 14 percent increase for resident undergraduates was assumed for all of Washington’s four year public universities.
WSU's tuition plan for the next two years includes different percentage rate increases for different classifications of students. The tuition rate schedule is available here. The rates of increase are varied to better equalize the impact in real dollar terms on different categories of students.
People are invited to submit comments on the tuition plan by May 6 at the Board of Regents Web site, available here .
Summary of Proposed 2009-2011 Budget Actions
To achieve the budget reduction, WSU made very difficult choices while working to ensure that we remain focused on our mission of education, research and outreach, and that we emerge from this crisis stronger. Our preliminary budget plan strives to achieve these objectives.
The University plan is comprised of individual area plans. These plans are online for public review. They give insight into the program and service impacts, the employee impacts, and the number of currently filled and vacant positions to be reduced for each WSU budget area.
Review and Feedback during May 2009
The next step in the budget process is to invite faculty, staff and students to review the budget plan and offer comments, a process that will continue throughout May, leading to a final budget on June 1 for implementation July 1.
On Friday, May 1, President Floyd and Provost Bayly will hold a preliminary question and answer session about the budget plan from 2 to 3 p.m. at Food Science and Human Nutrition Building T-101 with an additional location in Todd Hall 116.
On Monday, May 4, the President and Provost will conduct a first public budget forum at noon at the CUB Auditorium, to take questions and comments.
The Faculty Senate will meet on May 7 and May 12 to discuss the preliminary budget plan.
The University Budget Committee web-site also provides a means for the University community to submit comments and suggestions. It is available here . Other public-comment opportunities are being planned throughout the month of May.