Nov. 1, 2017
For more than a year now, President Schulz has been communicating to staff, faculty and students regarding Washington State University’s budget situation. On Monday, he provided an update that outlined plans for the current fiscal year. I wanted to take a moment to explain how these decisions will impact University Communications.
WSU has spent more money than it has received in revenues for the past four years. This has caused us to spend down our reserves to dangerously low levels.
Reserve accounts function like a savings account does for our personal finances. If our expenses exceed our take-home pay, we have to dip into our savings account to cover our bills. Last year, WSU spent $30 million more than it received in revenues. This cannot continue. We must take steps now to reverse this trend.
It has taken WSU four years of overspending to get to this point and it will take us several years to get our budget back in balance. To start this process, each unit at WSU has been instructed to reduce its spending by 2.5 percent for this fiscal year. These spending reductions are expected to continue for at least the next two fiscal years.
President Schulz has instructed all units to take the following steps in order to rein in expenditures:
- Hold any vacant positions open as long as possible; and
- When considering a position for hire, ensure that the position is essential, where essential means:
- Failure to hire would result in a high risk of program failure; or
- The position responsibilities cannot be met by anyone else in the unit; or
- No opportunities exist to access the expertise from other units across the university; or
- It is required for the health/safety of students and employees; or
- It is required for emergency management and response; or
- It is required for student health and wellness; or
- It is necessary to meet compliance requirements.
Other steps to include for expenditure reduction are:
- Reduce or defer travel and other operating expenses that are non-essential;
- Discontinue services that are not fully meeting constituent needs;
- Consolidate services and units to reduce duplication and cost and to gain efficiencies;
- Do not award salary increases that are outside of those granted by the University through planned salary increase programs
UCOMM budget actions
University Communications ended last fiscal year in the black but we overspent our budget by $500,000. This meant we tapped into the UCOMM reserves to cover our bills. We cannot continue to do this in the future.
We will need to decrease our spending in University Communications by $138,000 in order to meet our 2.5 percent target for this fiscal year. Carrie Johnson, UCOMM’s area finance officer, and I will meet with each UCOMM supervisor in the coming days to discuss how they will meet their individual spending reduction targets. It is important to note that the dollars saved through these actions will remain in our area. There will be no transfers back to the central budget. This means these savings will be available to us once the budget is in balance in several years.
In preparation for next fiscal year’s spending reductions, each UCOMM supervisor will submit an operating budget in May 2018 that reduces spending by an additional 2.5 percent for FY19.
This 2.5 percent spending reduction only applies to accounts funded by Planning Budget Line (PBL) funds; otherwise known as permanent, on-going funds. Those UCOMM teams that only receive PBL funds for salaries will not be required to reduce employee salaries.
The spending reduction does not directly impact service centers. However, several of our service centers ran a deficit last year. Managers of those accounts will be instructed to develop recovery plans to bring expenses in line with revenues.
Moving forward, I will also review and approve all travel requests for UCOMM staff and approve all expenditure requests in excess of $5,000.
We will discuss the budget in depth at our next University Communications all-staff meeting on Nov. 14 at 1:30 p.m. in the Chinook. Feel free to contact me directly (firstname.lastname@example.org) if you have questions in the meantime.
Given our fiscal environment, it cannot be business as usual. We will need to make sacrifices this year and for the next several years to come. But, by addressing these challenges now, we are giving ourselves the chance to reduce expenditures in a thoughtful, systematic way. In the end, WSU will be stronger and better prepared to meet our teaching, research and service mission.
Thank you for all you do for Washington State University and thank you for your help as we address these financial issues.