A message from President Freeman re: FY21 Budget and Planning
June 10, 2020
As previously shared in April and May, COVID-19’s financial impacts necessitate that we examine every option and take multiple steps to reduce our costs, address losses incurred to date and be responsive to the significant challenges COVID-19 will continue to present. Between now and the start of the fall semester, we will gain greater clarity about our financial situation as answers become available to key questions such as those associated with enrollment, residence hall occupancy and additional federal aid to universities. Until then, it’s prudent that we exercise flexibility in planning for a variety of situations, including fluctuations in enrollment and a possible resurgence of COVID-19. Accordingly, we will continue to take actions that preserve financial flexibility in the short term while being mindful of long-term financial needs.
Next week, senior leadership will put forward a preliminary FY21 budget to our Board of Trustees using revenue and cost assumptions that are based on limited available data and anticipate a shortfall of approximately $39 million. In September, we will present to the board a revised FY21 budget that will reflect more definitive enrollment figures and revenue projections. Realistically, even if all enrollment goals were to be achieved, revenue losses across the university are unavoidable, and we will need to address a substantial deficit.
With workforce costs comprising approximately 54 percent of our budget, a variety of personnel actions have occurred, and others will need to be considered. Prior to COVID-19, we had planned for FY21 employee increments to begin in July for all of our employees. Addressing the many years NIU employees went without wage increases has been an important priority for our leadership team, and we are now unfortunately put in the position where we cannot move forward as originally planned. For our unrepresented staff and faculty, the university will need to defer a decision on providing an increment in FY21 until the September board meeting. For those in bargaining groups, conversations are currently underway in each to identify options related to flexibility in the timing and the disbursement of contractually obligated increments.
While decisions about increments are being considered at the university level, each division and college is formulating its FY21 budget, responding to the need for cost containment and revenue enhancement. There is not a one-size-fits-all approach to this effort, and we anticipate additional actions will need to happen at both the unit and university levels. As noted above, we expect to finalize an overall plan in the fall.
Updates about a negative or uncertain financial picture are neither fun nor easy to communicate, but sharing this information gives our community context and insight into what our university is going through. Together we must be adaptable and patient yet determined to see NIU through to the other side of this pandemic. Thank you for your continued hard work and support.
Lisa C. Freeman