FY21 Budget Update from President Freeman
Sept. 17, 2020
I’m writing today to provide you with an FY21 budget update, including promising news and persistent uncertainties. Despite the many challenges COVID-19 has continued to provide, remaining focused, yet flexible, in how we respond is paramount in our ability to support our students, protect our community and deliver on our mission, vision and values.
Revised FY21 Budget
In June, we put forth an FY21 budget, with an anticipated shortfall of $39 million, to our Board of Trustees, knowing that additional clarity would come at the start of the semester regarding fall enrollment, residence hall occupancy and any potential additional federal aid to universities. Earlier today, we presented a revised budget to the board that shows a reduced shortfall of $32 million based on the information available to us now. While closing this gap is progress, we remain in a situation that requires additional actions to be taken throughout the year to reduce our costs.
One of the most effective ways we were able to reduce the gap was through our recent uptick in enrollment. In the early part of the summer, universities across the United States were preparing for enrollment declines of 15 percent. But, NIU employees stepped up to champion student success and move the needle on both retaining current students and recruiting new students. I am incredibly proud and grateful for your tireless collaboration and creativity to make these gains.
Providing a productive and supportive student experience this academic year is a priority, and it also comes with new realities. NIU has and will continue to incur increased expenses related to COVID-19 – including those associated with purchasing specialized personal protective equipment, testing and strengthening our technological footprint to ensure our infrastructure can support remote learning needs. We also have seen revenue losses related to housing, dining, events and the postponement of fall sports.
Each division and college will need to continue to pursue short- and long-term cost-containment and revenue-enhancement.
Despite financial uncertainty and ongoing challenges, we want to provide wage and salary increments for employees. This summer, we delivered on contractually obligated wage increments for employees represented by bargaining units and, today, we received approval for a 3% increase for unrepresented faculty and staff to take effect Oct. 1. All eligible faculty and staff will receive more information in the coming weeks.
We’ve also needed to make continued adjustments to our staffing models, including implementing a hiring chill and eliminating positions. This fall, we took additional action to reduce our workforce, which will impact more than 30 employees. This includes positions in our Hoffman Estates Conference Center, where we will discontinue event operations Oct. 30 and move courses to other locations. Changes in client demand and the competitive environment have caused NIU to monitor the viability of Hoffman Estates over the last few years; the significant decline in business since March and continuing uncertainty due to the pandemic have made operation of the center unsustainable. All impacted employees are being offered career and coaching services through our Employee Assistance Program.
Realistically, we will need to consider additional personnel actions and shared sacrifices during this fiscal year. We will assess every option available to us, weigh every decision carefully and be timely in our approach and communications. When tough decisions are made, we will be transparent, thoughtful and respectful.
State Funding and Federal Aid
The State of Illinois is financially strained by COVID-19 and is relying on federal funding to keep its operations funded for the fiscal year. Earlier this week, Gov. Pritzker warned that state agency funding would suffer additional cuts if federal relief does not come through. Under these circumstances, there would almost certainly be a negative impact on NIU’s state appropriation. There is also significant uncertainty regarding the prospect and timing of additional direct federal relief to colleges and universities. Moreover, should a relief package be made available, we anticipate that it will not offset the tens of millions of dollars we have lost due to COVID-19.
I want to assure you that we continue to do everything we can to appeal to federal and state legislators to support higher education and students. Huskie alumni have also been advocating on behalf of our university.
To respond effectively to these significant public health and fiscal challenges, we must stay nimble, adaptive and steadfast in support of our students and each other. Accordingly, the university leadership will keep you apprised of notable developments and will remain engaged with shared governance and bargaining units. We will continue to stand strong and navigate our way through this, together.
Lisa C. Freeman