As we approach the end of another week of remote teaching and working, I want to express my gratitude for all that you have done to manage this transition so successfully. To our faculty, who have adapted teaching and research with speed and precision in the midst of this crisis, and our staff, particularly those who work on-site to serve our campus in critical functions, I say ‘thank you.’
While the word “unprecedented” may be growing tired, no matter how you say it, there is no question that in shifting more than 3,600 courses to distance learning, transitioning vital research activity to remote or limited operation, ensuring the continuity of campus operations while working both on-site and remotely, and helping our region cope with challenges posed by the pandemic, you have achieved in record time, and with remarkable professionalism, what has never been done before.
To ensure that we build on this initial progress, I have charged a small group of campus administrators under the direction of Provost John McCarthy with identifying scenarios that factor in the rapidly changing context of both the epidemiological and economic outlooks and assessing the logistical and financial impact of re-engaging academic, research and residential programs for the campus in the 2020-21 academic year. With this information in hand, we will consult with the usual governance groups to finalize recommendations that will take into consideration the medium- and long-term implications for teaching, learning, student experience, research, infrastructure, operations and staff. Any labor issues will be taken up with the unions.
While we all continue to address the ongoing operational and pedagogical challenges of this transition, my leadership team and I have also focused on assessing and managing the financial impact of the COVID-19 crisis on the university both in the short and long term. With so much uncertainty about how this pandemic will play moving forward, from both a public health and a fiscal perspective, let me offer a summary of what we know and what we don’t at this time:
- The COVID-19-related operational ramp-down and related student reimbursements resulted in an approximate $40 million budget deficit in the fiscal year (FY20) that ends June 30. This estimate would be higher but for a reduction of approximately $10 million in campus spending on personnel and non-personnel expenditures for the balance of FY20.
- The drastic reduction in campus operations allows for some savings through reduced expenditures and operating costs, but significant fixed costs remain.
- Approved and in-process emergency federal funding for higher education will help partially mitigate that deficit, but may come with use restrictions that we are currently attempting to clarify.
- A hiring freeze for non-academic staff positions has been instituted. Academic positions, including faculty, will be reviewed with increased scrutiny at the deans’ and provost’s levels.
- We continue to monitor and report all campus spending and costs related to COVID-19 to the Commonwealth and will work with the Baker administration and the Legislature to seek relief funding.
- The status of our budget for the fiscal year that begins July 1 (FY21) remains very unclear, due to a number of variables, including, but not limited to:
- Uncertainty as to when the pandemic will abate and normal campus operations will resume
- The short- and long-term effects of the pandemic on enrollment patterns, particularly those of out-of-state and international students
- The pandemic’s effect on the financial aid needs of students and families
- The state budget process being delayed due in part to the need to account for the projected multi-billion-dollar decline in state tax collections resulting from the crisis
- Additional anticipated rounds of federal relief funding still being debated in Washington, D.C.
- Action by the Board of Trustees on the university budget, which historically follows finalization of the state appropriation, and includes approval of tuition and fees that account for more than 30 percent of our operating revenue
- The impact of the volatile stock market on endowment and gift income
- Uncertainty over the budgets and plans of federal research funding agencies and other sponsors
Due to heavy downward pressure on all revenue sources, particularly with regard to FY21, it is clear that significant budget management actions will be required in the weeks and months ahead to deal with the massive financial implications of COVID-19, some of which are not yet fully accounted. Continuation of the staff hiring freeze, scaling back on faculty searches, curtailment of travel and purchasing, and other budget measures are being considered as we prepare for the coming academic year. It is incumbent on all of us to reduce spending and scrutinize budgets. The provost and the vice chancellors have issued guidance to deans, department heads and supervisors with regard to hiring and discretionary spending of general funds. Additional guidance will be forthcoming, and questions related to specific situations should be referred up the chain of responsibility for clarification. While much remains unknown, we do know that careful budget management now may help moderate more difficult decisions in the future.
As new information becomes available and we develop our plans, I ask that faculty and staff remain flexible as we prepare for the possibility that our transition to remote teaching and learning could extend into the fall. As we navigate these uncharted waters, we will be guided by the same overarching principles that inform our planning process each year: we will mobilize all our resources to achieve a sustainable financial strategy; instill a reliance on evidence at all levels that applies the best possible information and analysis to decisions; and redouble our commitment to our students, faculty and staff to foster a campus culture of excellence in teaching, research and scholarship.
In furtherance of our quest for excellence, we will not allow the current crisis to deter us from honoring the accomplishments of our graduating students. Although we will be unable to gather in person, I am pleased to share with you that on Friday, May 8 the university will host a virtual celebration of the class of 2020. This online event on the day that commencement would have occurred is not a substitute for an on-campus celebration. I look forward to welcoming our graduates back to campus sometime after restrictions on large gatherings are lifted to host the commencement that they deserve. More details will be forthcoming.
Finally, to the members of our campus community who have contracted COVID-19 or who have loved ones who are ill or have passed away, our thoughts are with you as you cope with the far-reaching effects of this crisis. While we have had only one confirmed case of COVID-19 among our on-site employees, we know that there are many students, faculty and staff across the Commonwealth and the country who are suffering. Because of the limited availability of testing and the decentralized nature of data collection regarding the pandemic, we have no way of knowing for sure how many. I want to remind everyone, whether on campus or at home, to remain vigilant, maintain social distancing, wash your hands regularly, monitor your health and isolate yourself if you are sick. We recognize the financial, emotional and psychological impact that the pandemic has had on many in our community, and we will continue to work our hardest to support you.
As I observe you rising to the challenge of this moment, I am reminded of the revolutionary spirit that imbues this university. There is much work ahead, but I have never been more proud of each and every one of you.
Kumble R. Subbaswamy