As coronavirus upends plans and the financial considerations of prospective university students, higher education institutions across the country are preparing for enrollment dips and budget cuts.
Leaders at the University of Texas at San Antonio are girding for financial constraints of their own, projecting a 2.5 percent decline in tuition and fee revenues. Coupled with an expected dip in state funding, UTSA anticipates a revenue loss of $37 million, about 10 percent of their overall annual budget.
In the last few months, San Antonio’s largest university started taking steps to address its cloudy financial forecast.
In April, the university unexpectedly took 58 percent of unspent funds from department and colleges’ budgets and put them in institutional reserves. The total amount of money collected from this sweep was $18.8 million, just shy of the $19 million deficit the university was projecting at the time.
UTSA Chief Financial Officer Veronica Salazar Mendez asked both academic and non-academic departments to prepare for an expected economic downturn by developing plans that would slash significant parts of their budgets.
Mendez told university leaders they would have to cut permanent expenditures and not rely on one-time revenue sources, meaning furloughs were not the answer. She also advised colleges to review vacant positions and reorganize jobs or assignments to save money.
If these efforts were not enough to stabilize the university’s finances, colleges could consider layoffs and eliminate positions permanently.
As the process of paring back university expenditures is still unfolding, some faculty and staff are sounding alarms about the impact of the budget cuts and what they perceive as a lack of transparency from administrators who won’t answer questions about the budget constraints and maneuvers.
University officials say they have been transparent throughout the budgeting process, engaging stakeholders at every level of the university.
The cuts are necessary to “sustain [UTSA’s] priorities, protect as many jobs as possible and continue to uphold the university’s core educational mission to advance student success and research excellence,” Mendez wrote in an April 20 email to all faculty and staff.
Academic leaders started presenting their plans for budget cuts Wednesday to top university administrators, including President Taylor Eighmy and Provost Kimberly Andrews Espy. A budget plan will be finalized in mid- to late-June and at that time, all cuts, including employment, will be determined.
Unexpected budget sweeps
Some faculty and staff became concerned when UTSA swept more than half of the money available in departmental budgets and placed it into the main university accounts.
To some faculty, the move came without adequate warning, disrupting usual operations.
“So you open your bank account one day and 58 percent has been taken away and you had no idea it was coming,” one faculty member said. Faculty members who spoke with the Rivard Report about the budget cuts asked for anonymity out of fear of retribution from university leaders.
The unspent funds – money typically used for operating expenses like purchasing equipment or updating resources – did not include money designated for benefits, utilities, or salaries.
The sweeps included only funds “that were not already designated to be spent to have as little impact as possible,” UTSA spokesman Joe Izbrand said.
Another faculty member said no explanation was offered as to why the sweeps were necessary “beyond a generic statement that it was COVID-19 related,” and there was no accounting provided for the total amount swept into central accounts.
“For me, the issue is I’m working in a public university,” the faculty member said. “I’m working pretty hard and it would be nice for them to be transparent about the financial aspects that are impacting the work that we are trying to do.”
Questions to university leaders addressing these issues went unanswered or were addressed with vague responses, several faculty members said.
Izbrand told the Rivard Report on Wednesday that a total of $18.8 million was swept to help bridge a projected $19 million deficit from refunds for housing, meal plans, and parking; the cost to transition to remote work; and other unanticipated expenses.
Asked about concerns over the transparency of the budgeting process, Izbrand said university leadership has demonstrated a commitment to be both inclusive and collaborative.
“It started with the president, provost and chief financial officer holding individual meetings with each of the deans and the leadership of the colleges to outline the challenges, listen to their concerns and begin developing a shared solution based on the unique needs of each academic unit,” Izbrand wrote in an e-mail.
“Each college initiated an iterative engagement process, holding multiple town hall meetings with department chairs and faculty to solicit their ideas, creating committees to identify priorities and developing recommendations centered around student success and research excellence.”
Permanent cuts required
In April, Mendez issued directives for cost cuts of 9 percent and 14 percent for academic divisions and 10 percent and 15 percent to non-academic divisions. The cuts are steeper than those requested in May by Texas’ top Republican leaders, who asked agencies and public universities and colleges to submit plans identifying savings of 5 percent across two years.
The difference in state and university directives has some faculty members questioning why UTSA is taking a more aggressive budgeting approach.
“Since most of our funding for the first year of the biennium has already been allocated, it means we must take a 10 percent reduction for FY 21,” Izbrand wrote. “Depending on the State’s budget situation, the Governor has indicated further adjustments may occur.”
The school also anticipates a 2.5 percent loss in tuition and fee revenues for fiscal year 2021. All of these factors equated to an anticipated revenue loss in fiscal year 2021 of $37 million, roughly 10 percent of UTSA’s annual budget.
Money saved from the 9 percent and 10 percent cuts would cover about $34 million, according to an internal budgeting presentation.
In line with other cost-cutting efforts, UTSA limited expenditures through Aug. 31 to “critical end essential” costs, and any expenditure greater than $2,500 had to be approved by divisional vice presidents. University officials told staff that the normal replacement schedule for computers and equipment would not be followed and university-sponsored international or domestic travel would not be permitted unless deemed mission- or health-critical, according to an April 20 email.
In response to these budget cutting requests, a group of 41 academic leaders across seven colleges sent a memo to Eighmy, Espy, and Mendez expressing concerns about the way the cuts could affect students’ educations, the impact it could have on non-tenure track faculty jobs, and the university’s ability to function as a research-focused institution.
With tenure-track and tenured faculty salaries not included in budget cuts, department chairs argued that cuts would disproportionally impact those adjunct faculty members, who teach the vast majority of credit hours.
When asked if UTSA leaders shared staff’s concern about the elimination of non-tenure track positions leading to larger class sizes or fewer course offerings, Izbrand wrote that UTSA has no intention of unilaterally reducing non-tenure track positions.
“Each college dean has the authority to recommend the budget strategy they believe best fits their needs, taking into account our top priority of ensuring student success and research excellence,” Izbrand wrote.
If the elimination of non-tenure track employees causes a decline in courses available or limits class sizes, as chairs fear, there could be a detrimental impact to UTSA’s funding from the university system and statehouse. UTSA uses the total number of students enrolled to ask for funding from the UT System and Texas Legislature, slated to meet in January 2021.
The department chairs asked that financial cuts to academic units be no more than 5 percent.
“As we have looked carefully at higher percentage cuts, we are convinced that anything greater will gut the university’s mission to support student success and research excellence,” the memo states.
The chairs suggested the university could reduce overhead costs and cut pay for the highest-paid administrators, those at the level of assistant vice president/provost or above.
In fiscal year 2020, Eighmy’s salary was $561,750, Espy’s was $483,000, and the lowest-paid assistant vice president earned a little more than $102,000, according to a document submitted to the Legislative Budget Board.
UTSA’s senior leadership team is currently contributing 10 percent of their salaries for the remainder of the fiscal year to the Roadrunner Staff Emergency Fund, Izbrand said when asked if pay cuts were under consideration.
“We know that the decisions we must make are not easy,” Izbrand wrote in a statement. “That is why a transparent process is so important and it’s why we are optimistic that as we pursue cost savings, we will see creative thinking, innovative approaches and new ideas that will result in a practical budget.
“All of us – faculty, staff and university leaders – have an obligation to work together to ensure that we maintain our focus on our core mission of teaching and learning while adjusting to new financial realities.”
The Faculty Senate, the Staff Senate, and the Student Government Association endorsed the department chair’s memo. The leader of the Faculty Senate did not respond to request for comment and the leader of the Staff Senate declined to comment. There has been no formal response to the chairs council memo, multiple sources said prior to Wednesday.
Taylor Edwards, the newly elected Student Government Association president, said students want to see non-academic areas of the university take bigger budget hits than academic departments.
“At the core of a university is academics, so it would be nice to see academic cuts be a lot less than non-academic cuts,” Edwards said. “And during this time of COVID and not being able to be on campus, we should really prioritize academic areas.”
Students also are worried about adjunct faculty job losses, the student government president said. He expressed fears that class sizes would increase or course offerings would be reduced, affecting students’ ability to graduate on time.
“To hear professor so-and-so from the political science department, she might be cut, it’s shocking to us students in our individual degrees,” he said. “We see those [adjunct] professors as staples of the department and the best of the best.”