The economic impact of COVID-19 has been severe and far reaching. As a result, the State of Colorado’s ability to invest in public higher education, and specifically in UNC, has been significantly impacted. The university’s provisional budget for FY 21, shared in our June Board of Trustees meeting, projected a revenue shortfall of $24 million due to this substantial decrease in state support coupled with declines in enrollment and housing and dining contracts due largely to COVID-19.
UNC cannot absorb a deficit this significant without additional actions. As a result, we have spent the summer months working to revise our budget in order to deliver an updated plan to the Board of Trustees at their September meeting. We are addressing this shortfall in three ways – through temporary savings already implemented, the use of operating reserves, and, most significantly, through additional temporary and permanent reductions of $10 million identified through the work of the Financial Task Force.
Early this summer, I formed the Financial Task Force to evaluate the university's budget and make recommendations on adjustments for the current academic year. The task force has been divided into two subcommittees that are composed of faculty, students, staff, and administrators. These subcommittees have been meeting throughout May, June, and July and will continue to do so.
- The University-Wide Savings Subcommittee has examined university-wide expense line item reductions that will be utilized to generate cost savings across the university. The committee has developed models for tiered, temporary pay reductions for faculty and staff and has also drafted recommendations for campus-wide travel restrictions, changes to professional development budgets, and reductions to search firm expenses.
- The Prioritization Subcommittee has provided feedback as each vice president, our Athletic Director, and our Chief Information Officer have given overviews of their areas’ expenses along with temporary and permanent budget reduction scenarios of 3%, 5%, and 7%. As an example, this review aided in the decision to discontinue the Men’s and Women’s Intercollegiate Tennis programs which was announced in June.
These two subcommittees came together this week to discuss their individual findings with the full Financial Task Force. In the weeks ahead, each Vice President and our Athletic Director will use the feedback from this week’s meeting as they work with one another, and their respective deans, directors, and unit leaders, to solidify both temporary and targeted, strategic permanent reductions of at least 5% to their FY 21 budgets. The full Financial Task Force will come back together the week of July 27 to review proposals from the VPs. The following week, we will share additional updates with the campus community. Final budget decisions will need to be made swiftly and will be implemented throughout the month of August. I will continue to share information as quickly and openly as possible, especially where they may impact the well-being of our faculty and staff significantly. The Task Force is discussing the best forum to use to share the results of this work.
The combined reductions recommended by the Financial Task Force and the Vice Presidents must total at least $10 million given our current budget reality. While it will never be the first lever we want to utilize, it is likely that positions will need to be eliminated and operations will have to be reimagined given that 70% of our current budget is related to personnel. And, although I do not want to implement salary reductions beyond those already taken by cabinet, I recognize that the catastrophic impact of COVID-19 on our budget may make them a necessity. The evolving nature of the pandemic makes planning for Fiscal Year 2021 very difficult and we will need to continue to react nimbly – including possibly implementing additional reductions if they become necessary.
I would like to thank the members of the Financial Task Force who have spent many hours digging into our budget and options this summer. Their willingness to provide leadership and vision during this crisis is critical to UNC’s future. The work that lies ahead to finalize and implement these reductions will not be easy, but it is necessary in order to continue to deliver a high-quality education to the students we are all here to serve.
If you have suggestions or questions, I continue to welcome them. Thank you for your commitment to our students and our university community.
Rowing, Not Drifting,