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Wednesday, April 1, 2020

The pandemic and college and university finances

As we all work through the implications of the Covid-19 pandemic for how we fulfill our mission at the University, some things have come into clearer view. Collectively, we are developing a better sense of the capabilities, upsides, and downsides of tools such as Zoom, and what works best in that environment. We see where our students and our colleagues are thriving and adapting, and where there are challenges. Daily, we learn where our colleagues need more time and flexibility to get to their work amidst other demands on their time at home or in the community. Policies and practices and requirements are being reviewed in departments and in college offices to see where they can be streamlined, converted to digital, or scrapped if not needed. 

Not yet as clear are the implications of the pandemic on the University’s and college’s financial health.

Almost certainly the implications appear challenging. We’ve already seen the freeze imposed on hiring and salary adjustments here at the U. Recruiting the fall incoming class of students, particularly international and perhaps even out of state students, will likely be more difficult for a variety of reasons. Some students may be wary of entering college if they are not sure they will have an entire year on campus. Parents who have lost jobs or have reduced income might look to delay a child’s college entry until their income resumes. International students who do enroll may encounter visa issues. Tuition increases seem unlikely in the current environment, putting a pinch on the budget. As state finances take a hit, the toll on the University’s next budget could also be significant. With uncertainty afoot about job security and financial markets, donors become more cautious about providing support for causes like the college. I could go on.

None of what I wrote in the previous paragraph likely comes as a surprise to you. The factors mentioned above are raising concerns across the country. Many institutions have taken steps like those taken at the U to tap the brakes on hiring and other expenses. (See, as examples, the University of Wisconsin, Penn State, Brown.) As of now, we do not have any firm projections of the anticipated consequences of Covid-19, which is not surprising given the number of unknowns. As I hear and learn more about the budgetary and financial situation, I will share it with you. I’ve aimed to focus us as a college on information and data sharing and transparency (see, e.g., CLARA), and that will continue. 

In the case of the college’s finances, I indicated in my September State of the College remarks that we had dipped into carryforward, i.e., reserve, funds to balance the books in the last fiscal year and that, while the reserves were healthy, we wouldn’t want to draw from that well excessively. In the January issue of From the Dean’s Desk, I followed up on that earlier budget discussion and noted that I had tasked five workgroups in CLA administration to examine areas where we might generate revenue and reduce costs, establishing a target of $3.5m across the groups in savings and/or revenue. These groups were: (1) administrative unit staffing and expenses; (2) Teaching Assistant/Unallocated Instruction spending (i.e., block grant instructional expenses known as TA/UI); (3) flow of funds from the college to units, carry forward and reserves, and potential for moving spending onto endowments; (4) soft commitments and Supplies, Equipment, and other Expenses (known as SEE); and (5) summer enrollments. Each group was given a set of questions to explore and a target figure for savings or revenue. Suggestions and ideas from these workgroups will be discussed in the CLA Executive Committee in the coming months and I hope will provide us with some initial steps to prepare for whatever the financial implications of the pandemic turn out to be.

I don’t mean for any of the discussion above to alarm you, but rather to describe straightforwardly the landscape as it appears right now. One of the strengths we can draw on in addressing any challenges ahead is that we have developed a collaborative culture in the college through Three-Year Planning, the use of task forces and ad hoc committees around specialized issues (e.g., fully-paid sabbaticals), and working with our shared governance bodies on important issues (e.g., multi-year P&A contracts). 

Thank you for your amazing and dedicated work these past few surreal weeks as you have brought continued excellence, opportunity, and service to all in our CLA community. You’ve done that while knowing that everyone, like you, is trying their best to answer questions and resolve situations as we look out for each other and our students. I’ve been pleased that we’ve shown each other the appropriate patience and collegiality as we’ve all sought out solutions we could bring to bear in our classrooms, our departments, and our college offices. I couldn’t be prouder of, or more impressed with, the work you’ve done and the spirit with which you’ve done it. I’ve often said that what we do in CLA sets the tone and example for the rest of the University, and you’ve set a very high bar indeed for others to reach.