Evaluating our budgets and budget model
Dear WSU Community,
I hope the fall semester is going well for everyone. As I have the opportunity to travel around Washington, it is heartening to see so much energy and enthusiasm among WSU faculty, staff, and students for in‑person activities.
Like many public universities, WSU is still feeling the aftereffects of two years of COVID‑related challenges — especially in terms of overall morale, student enrollment, and keeping up with inflationary expenses. Washington State University is committed to ensuring that all units, campuses, and extension centers are set up for success. In evaluating where we are and where we aspire to be, an important piece of the puzzle lies in our budgets and budget model.
Evaluating our budget
The landscape of higher education has undergone a pivotal shift over the last few years. While operations have mostly returned to normal, recent data reveals that colleges and universities across the nation continue to experience difficulty attracting and retaining students post‑COVID — some estimates indicate that there are 1.3M fewer students in higher education post‑pandemic than there were pre‑pandemic. WSU is not immune from this trend, having seen a system‑wide 7.7% decline in enrollment this year alone. As you might expect, these decreased enrollments continue to negatively impact our operating budgets across all campuses and units. This fall, senior leadership is working to remediate this downward trajectory by modifying our approach to financial management, employing new recruitment strategies, and continuing to advocate for system needs in the legislature.
We anticipate that the continued impacts of diminished enrollments will vary across the system and that each campus will require flexibility in working through resulting budget reductions. To better support those efforts, chancellors, in collaboration with the Executive Vice President for Finance and Administration, will be the primary budget decision‑makers on each campus for the remainder of the fiscal year and FY2024. As a system, we also plan to hold open a number of positions over the next few years as enrollments stabilize and increase.
We recognize that this may cause additional strain in certain areas and are able to offer support through reserve funds. Good stewardship in recent years has resulted in the restoration of core fund reserves to the healthiest levels in nearly a decade. These resources will provide one‑time support to assist with budget reductions. Units will also be able to utilize some portion of their carry forward funds to assist with budget management. More information on this will be forthcoming.
To ensure our long‑term success, Enrollment Management is implementing several new strategies across the WSU system to improve enrollment this application cycle. Some of their new initiatives include enabling domestic students to apply through the CommonApp, creating increased opportunities for on‑site admission in local and regional community colleges, expanding the guaranteed admission program to over 62 districts and schools, and helping more students experience orientation and envision their future on each of our campuses. We are excited by the potential of these programs and are already beginning to see some early positive returns.
We know that these budget reductions will place an additional burden on our faculty and staff at a time when we are already operating in many places with too few faculty and staff members. Additionally, we know that many WSU faculty, staff, and student employees are dealing with significant inflation coupled with modest salary increases. To address this issue, we are continuing to aggressively pursue increased and equitable compensation for all WSU employees. In the upcoming 2023 legislative session, we are seeking a 4% increase for the 2023–24 academic year and a 3% increase for the following year. We will also seek additional compensation funds to close long‑time faculty and staff equity gaps.
Implementing a new budget model
One additional long‑term challenge has been a very outdated budget model for WSU. Over the last 18 months, the Executive Budget Council (EBC) has carefully evaluated our current budget practices and needs. After a comprehensive review and the participation of the WSU community during dozens of listening and feedback sessions, leadership has elected to move forward with the adoption of an improved budget model that will include two primary objectives:
- We will begin the implementation of a responsibility center management hybrid budget model to inform decisions about the internal allocation of revenues and costs.
- We will create a budget model governance process to ensure transparency and alignment with system strategic goals, priorities, and campus plans.
As the details of the budget model and governance process are finalized, we are concurrently developing a Budget Advisory Council (BAC) to support the implementation of the new model. The BAC will be co‑chaired by Chip Hunter, dean of the Carson College of Business, and Kelley Westhoff, executive director for Budget, Planning, and Analysis. Their leadership and the guidance of the Budget Advisory Council will be critical in the months and years ahead, as this will be a data‑informed, not data‑driven, budget process that will ultimately enable our campuses to have more fiscal autonomy and provide improved tools for long‑term fiscal planning.
Our goal is to pilot the new budget model and continue building out the budget governance this fiscal year (FY2023). Full implementation is expected to be complete within the next two fiscal years and ready for launch on July 1, 2024.
We are grateful for the Executive Budget Council’s dedication and investment in the budget redesign work. Their advocacy will have a profound impact on the project’s legacy and the university’s new budget model. We also want to thank the Budget Office for their continued support of this process and partnership with Huron Consulting Group.
I want to acknowledge the continued hard work of campus and college leaders to ensure we are excellent fiscal stewards of our resources, whether they are tuition dollars, donor funds, or state financial support. I realize that as we continue to deal with declining resources, a damper is placed on the many outstanding ideas generated by the WSU community that deserve future investment. I assure you that system leaders and I are working to find solutions that will continue to strengthen, not stifle, the incredible work put forward by students, faculty, and staff.
Please expect to hear additional budget details from campus chancellors concerning specifics for each of our six campuses in the coming months.
Thank you for your continued efforts to ensure that all WSU students receive an outstanding educational experience. If you have questions, please feel free to email me directly, and I will make sure that you receive an answer from the appropriate sources. Additionally, campus chancellors and I will be happy to address any concerns you may have in our Fall 2022 Town Hall meetings scheduled for the remainder of this semester.
KIRK H. SCHULZ
President, WSU System