Dear Campus Community:
As the campus emerges from the financial challenges brought on by the pandemic, we are excited for the return this fall of face-to-face instruction and the resumption of normal operations in our classrooms, labs, playing fields, residence and dining halls and other areas of campus.
The campus’ fiscal year 2022 budget, which includes additional state and federal support, reflects a healthy optimism that the effects of the pandemic are largely behind us. However, even with this enhanced funding, the effects of the pandemic on the fiscal health of the campus continue to be felt. For this reason, the budget retains a portion of the operating savings enacted in previous years as a buffer against the uncertainties of a continually evolving health and safety environment, and provides for the long-term financial outlook with caution until we reach a full return of pre-pandemic enrollment and revenue targets. (A detailed presentation of operating budget figures can be found at the bottom of this message).
Some of the major impacts on our FY22 budget are as follows:
- The UMass Board of Trustees has frozen in-state tuition for the second straight year. While the tuition freeze will provide much needed relief for students and their families, its effect on our budget is a reduction in revenue of $6 million for FY22 and a cumulative reduction of $12 million over the past two years. While tuition, housing and dining revenues are conservatively estimated at this time, we are continuing to fund financial aid at normal levels to ensure access for students in need.
- The full enrollment impact of the transition back to normal operations won’t be known until later in the semester, but based on the most recent data we are projecting $5 million less in tuition revenue than previously budgeted.
- The federal government has provided much-needed relief to colleges and universities to offset the revenue losses incurred during the pandemic. Our campus was allocated Higher Education Emergency Relief Fund (HEERF) monies for institutional and student aid totaling $44 million and $34 million respectively. Because HEERF funds are one-time offsets to losses, they cannot be used to fund long-term operational commitments. As such, we are using the institutional HEERF funds to help offset actual and projected revenue losses from FY21 & 22, non-state funded salary increases, and COVID health and safety related costs.
- The recently enacted state budget provides for a 1.9% increase to our base state appropriation, representing a $7 million increase over FY21, which was frozen at FY20 levels. These funds will help to provide critical support for students in financial aid, student health and wellness, and other student success measures. We are thankful for the continued support of the governor and the Legislature in providing critical operating funds to the campus.
- The state has authorized salary increases of up to 1.5% of salary as a one-time non-base COVID adjustment, a 2.5% retroactive base salary increase for FY21, and a 2% base salary increase in FY22. While the final outcome is subject to ongoing collective bargaining, the state is expected to fund the portion of these salary increases that are paid on state funds and the campus will fund the remainder. The total cost impact to the campus budget is estimated at a net $16 million.
- The pandemic forced the campus to make difficult spending reductions in both personnel and other non-personnel areas. As we resume activities this fall, the campus is restoring a portion of these budget reductions to enable the resumption of critical operations and to fund new strategic initiatives. Non-academic executive areas have reduced their FY22 base budgets by $4 million (2.2% of total base budget), reflecting ongoing savings and efficiencies. Academic areas have reduced base budgets by $3.5 million, reflecting a 1% reduction of total base budget.
- The campus will remain diligent in providing funds for vaccinations, testing and a small amount of quarantine and isolation space to keep the campus safe throughout the fiscal year. We need to be prepared for changing circumstances in order to ensure a healthy and robust campus experience this fall.
In summary, the FY22 budget reflects a campus that is on pace to return to pre-pandemic operations while also preserving the necessary savings and efficiencies to ensure long-term growth and success. We would like to thank the campus community for the extraordinary efforts and sacrifices made to position the campus for a successful and healthy fiscal year. We look forward to the resumption of academic and student activities that have made UMass Amherst a destination of choice for our students, faculty and staff. Go UMass!
Chancellor Kumble R. Subbaswamy
Vice Chancellor for Administration and Finance Andrew Mangels