Washington State University’s 3‑year plan to erase a $30 million annual operating deficit is off to a strong start. The university reduced its deficit by $22 million, surpassing its fiscal year 2018 goal by $12 million.
The WSU fiscal health plan calls for a reduction in the operating deficit of more than $10 million per year. Preliminary figures show the WSU system decreased the annual shortfall in fiscal year 2018 through a combination of spending cuts and greater-than-expected revenue growth. Under the fiscal health plan, the university’s operating budget will be balanced by the end of the fiscal year 2020.
“Thanks to the hard work of both staff and faculty, we have made tremendous progress this year,” said Stacy Pearson, vice president of finance and administration. “Though next year is going to be even more challenging, we remain committed to restoring WSU’s financial health while continuing to invest in the university’s future.”
The Fiscal Health Initiative was launched last year as part of a budget-balancing plan approved by the WSU Board of Regents. A series of strategic investments in previous years that included expanded classroom space, the new medical college, development of WSU Everett, construction of new athletic facilities and other priorities, had required WSU to tap its central reserves to help cover the annual cost of operating the university system.
Under the initiative, all departments are required to develop plans to increase revenue or reduce spending by 2.5 percent a year for 3 years to steadily eliminate WSU’s reliance on central reserves for ongoing operating expenses. The university then will focus on replenishing the central reserves, which had fallen from about $200 million in fiscal year 2013 to just under $100 million four years later.
“By all measures, WSU has some of the most productive faculty in America. They continue to educate students, create new knowledge and make ground-breaking discoveries even in this tight fiscal environment,” said WSU President Kirk Schulz. “Working together, our faculty and staff have done an outstanding job of addressing our financial situation while maintaining the quality of this great institution.”
Strong revenue growth contributed significantly to this year’s success. The university saw increased revenue from tuition and self‑sustaining funds such as campus housing. In addition, WSU received greater overall support for higher education from the Washington Legislature.
The 2018 financial report will be published in early 2019 when final accounting numbers are certified.