Claims regarding $144 million in reserves
2 Responses to “Claims regarding $144 million in reserves”
Here is a copy of a piece I submitted to The Daily Evergreen that will run tomorrow:
As all of you no doubt realize, these are extremely difficult times for our university. In fact, never have we seen times quite as financially perilous as those we face today.
In facing a series of budget cuts – reductions which have, most recently, resulted in the elimination of 30 percent of WSU’s state appropriation in the past 18 months – we as an institution have exercised appropriate stewardship and will continue to do so.
Claiming that the university maintains $144 million in reserves while cutting programs and jobs is disingenuous at best.
The claim regarding the university’s financial reserves is based on financial statements that portray the financial status of the university as of June 30, 2009, which predates the most severe reductions our university has faced.
That financial statement represents an amalgamation of funds of various types, most of which are targeted for specific purposes.
For example, there are balances in housing and dining, parking services and student activities funds. Such money is collected for specific purposes and it cannot and should not be used to support general university operations.
Grant and contract funding comes with specific use agreements, detailed budgets and required research deliverables and cannot be used for general obligations.
A portion our investment income comes from earnings on state trust lands we receive as a land-grant institution. Distributions from these endowments are restricted by state law for capital construction only. Another portion of our investment income comes from distributions from endowments that are permanently held by WSU; most are restricted by the donor to a specific purpose, usually scholarships, fellowships and endowed professorships. Similarly, the university must set aside certain funds to pay for future liabilities. Given the uncertain financial times ahead, it would be extremely irresponsible for us to use that money to pay current expenses, even if we were legally able to do so.
I could cite further restrictions on our budgetary flexibility, but my most important message is this one: I want to assure all members of the university community that if I had $144 million in available uncommitted funds, our university would not have taken dire financial steps to meet this ongoing crisis.
In conclusion, l would like to encourage continued civility in our discourse regarding our financial situation. While the overall economy is showing some signs of improvement, those hopeful trends have not yet been reflected in state revenues, meaning we will continue to face challenges in the months ahead.