UNIVERSITY BUDGET UPDATE
Team,
 
In a spirit of full transparency, I want to provide an update about our budget situation. There have been a lot of conversations across the state about higher education budgets, and it is my hope that today’s message will provide a full overview of our situation, answer your questions about the future, and promote open dialogue across campus. Discussions of this type can be difficult, but it is my goal that our entire campus community will collaboratively come together to address these issues.
 
Scope of the Situation
Our current expenditure budget reflects a structural deficit of approximately $6 million. This deficit is driven primarily by declining enrollment. Fortunately, our reserves are such that we can cover this deficit in the near term. We have strategically planned to rely on some reserves over the next few years while a new and more sustainable budget model is developed. We are also actively focused on recruitment and retention of our students as our primary mission. We have discussed this plan with the State Board of Education, and they are supportive of this approach.

Beginning this summer and lasting several months, we engaged in a budget reset process to create an expenditure budget that accounts for all funds in support of current activities and requirements. Our Unit Business Officers are in the final stages of distributing reset budgets throughout indexes, and all units should now have access to their reset budget figures. 

The budget reset did not involve budget cuts, but rather, it was focused on properly allocating or reallocating budgets to align with actual expenditures. More information about the budget reset, including frequently asked questions and a feedback form, is available on the Budget, Planning and Analysis Office website . The budget reset was an initial step in establishing a stable foundation for development of a new budget model at ISU. Development of this model will be a collaborative, inclusive process that will unfold over the coming months and years.

Last month, as we were working through the first phase of a months-long process of resetting expenditure budgets, we learned of the Governor’s 1% rescission or hold back of appropriated funds this current fiscal year. This means Governor Little asked all state agencies to reduce their budgets by 1% this fiscal year. For Idaho State University, this means an approximate $822,000 reduction in our appropriated budget this fiscal year. The Governor also advised us to prepare for a 2% base-budget reduction next year given projected downfalls in state revenues. These reductions are intended to reset state spending which means an additional $822,000 reduction next year, for a total budget reduction next year of $1.64 million.

To meet last month’s deadline, ideas and initial plans were sent to the State of Idaho about how ISU plans to meet the 1% reduction. These “plans” were high level and conceptual by design. They were communicated to signal alignment with the Governor’s request and provide our campus community with a framework as we collectively solve the 1% and 2% reductions. Our specific actions are not finalized and we need full campus input to develop our strategy. 

Rather than imposing a centrally-developed budget reduction, we have asked all units to develop initial ideas for realizing expenditure reductions through a review of position vacancies, salary savings, deferred purchases, and other means that create the least detrimental impact to students, enrollment, programs, and services. Specific to this task, I am asking campus to submit ideas for potential cost avoidance or savings by December 17. An online form has been created to catalog initial reduction ideas. I welcome your ideas and suggestions and invite you to participate in the process so we can begin campus-wide conversations in the Spring. These ideas may be localized to your workgroup or be suggestions that can be implemented across the University community.  

In addition to the general fund reduction, our planned structural deficit, and enrollment challenges, ISU’s appropriated allocation could be further reduced by $400,000 in 2021 as part of the state’s Enrollment Workload Adjustment formula, which adjusts overall the general fund allocation by increases or decreases in student credit hour production at each university. 

While these are sobering facts, I remain optimistic and steady in the belief that we can collectively navigate these difficult fiscal challenges while supporting our students and future students in successfully achieving their academic goals.
 
Our Primary Goals
At the highest level, our goal is to create long-term financial sustainability that supports our mission of educating students. This will be achieved by balancing revenues and expenditures while continuing to invest in strategic efforts and initiatives.

During faculty and staff forums this fall, our guiding principles for developing new budgeting structures at Idaho State were shared. Those goals are:
  • Trust, transparency and inclusivity in budget development and administration
  • Maximization of University resources
  • Budgeting and decision-making informed by strategic plans and priorities
  • Budget structures that foster innovation and stewardship
  • Growth through mission-focused student recruitment and retention
  • Empowerment, mutual accountability, responsiveness and adaptation at the local level

Next Steps
The FY 2021 budget development process will commence in earnest in January. Although there are limited opportunities for investment of new funds given our structural deficit and the reduction of state appropriation, we have designed a process that supports collaborative maximization of our collective resources. 

An initial timeline for FY 2021 budget development is expected to be posted online next week. Beginning in January, we will share budget development resources, meet with units, host campus forums, and hold drop-in sessions to support the process. Resources will continually be added to the budget website, and I will send regular communications and updates throughout the spring semester signaling upcoming deadlines and developments.

I have every confidence that we will get through our budget challenges by garnering the collective best thinking of our campus community, upholding our values of trust and transparency, and focusing on our primary mission. The hard work we are engaging in now will position Idaho State University for long-term financial sustainability.

Dr. Glen R. Nelson
Vice President for Finance and Business Affairs
Send comments, feedback, and questions to glennelson@isu.edu .