The University of Idaho is facing a projected $14 million budget deficit, due to an overall increase in university benefit costs and a decrease in tuition revenue.
The total projected deficit is the result of two factors — a change in tuition revenue, due to the university’s recent full-participation in the Western Undergraduate Exchange (WUE) program, a program encompassing a collection of western states designed to allow students to study at participating universities at a decreased rate, and an increase in overall cost of benefits for university employees.
The breakdown
UI became a full participant in the WUE program in April of 2018, with the changes in tuition going into effect fall of 2019. Tuition for WUE participants is $12,456, not including housing and other fees, compared to $27,540 for out-of-state tuition. The change went into effect fall 2019, so all out-of-state students enrolled prior to the fall will continue to pay the same tuition paid when they enrolled.
Vice President for Finance and Administration Brian Foisy said for every out-going student paying full-time, outof-state tuition, they are replaced by another WUE student at a 1:1 ratio, yet the newer student pays about $15,000 less than their graduating counterparts. The change in tuition accounts for $5 million of the university’s total $14 million projected deficit.
Foisy said when the university made the decision to be ‘all in’ on the WUE program, the decrease in tuition revenue was expected, but the university made the decision to become a full-participant in the regional program for the long-term benefits.
“At the end of the day, you really rely on (strategic enrollment) experts to say, ‘Are we long term, going to be better off being part of the program, even if it takes several years for us to recover? Are we better off being out of this? And their belief based on the success we were having in Oregon, Washington, was better off to be in this in the long run,” Foisy said. “Let’s just buckle in, because it may be a little bit of a wild ride the next couple of years while we wait for word to spread within these different markets that we’re now backing the WUE program.”
A total of $7 million of the projected $14 million comes from an expected overall increase in the full UI employee benefits package.
The remaining $2 million of the total projected deficit is calculated in as a margin of error, Foisy said.
Addressing the deficit
Foisy said the realization of the deficit came in the spring of 2019, several months before the end of Fiscal Year 2019.
A fiscal year is the year as recognized for accounting purposes, spanning from July 1 to June 31.
Conversations began taking place in the spring as to how to manage the projected deficit, several months before the start of the following fiscal year.
The solution to addressing the issue is not the same across the university, Foisy said. The various campus departments are responsible for making appropriate cuts based on their share of the budget in efforts to balance the books.
“Everybody is participating in this process,” Foisy said. “Nobody was held harmless — president’s office, athletics, literally everybody is participating in this process. So through the vice presidents, we push these cuts out on a prorated basis to each area of responsibility. From there, we didn’t make any effort to say, here’s how you must implement the cuts in your area.”
Foisy said one of the common ways the university and its departments tighten budgets is leaving vacant positions across campus open. These decisions are made in accordance with the university’s Strategic Faculty Hiring Plan, Provost John Wiencek’s plan, which focuses on best addressing how and when to fill vacant positions.
“The whole idea behind the strategic faculty hiring plan is if enrollment is dropping in mechanical engineering, and it’s surging in sociology, take some of that money and move it over there,” Foisy said. “And then you’re meeting student demand, and ideally, not hurting the students over there because they’ve got plenty of faculty positions to meet that demand.”
Throughout discussions of addressing the gap, there has been no conversation within the administration of raising tuition to cover gaps from the WUE transition, Foisy said.
Other cost-cutting procedures may include limitations on travel to the utmost necessary and delaying minor infrastructure changes, Foisy said.
“The idea here is no stone unturned,” Foisy said. “Scott (Green’s) pretty well charged us to investigate every possible avenue to make sure that we’re managing institutional funds prudently.”
Changes to university employee benefits
UI Faculty Senate Chair Terry Grieb said by the end of Fiscal Year 2019, the state of Idaho reduced its support for UI health insurance plans by $1.2 million. This figure, combined with approximately $5.9 million of increasing healthcare costs, added to the projected $7 million healthcare deficit.
The UI Faculty Senate passed a motion Tuesday to continue providing health insurance coverage for Other Eligible Adult (OEA) plans, specifically for the life-partners and families of unmarried couples. Retention costs for this benefit will cause insurance rates for faculty and staff to increase anywhere between $38 and $108 annually, depending on how many family members or other eligible adults are covered in their respective plans.
This increase is part of a much larger package of proposals to address insurance the insurance budget deficit, Grieb said. Separate from the costs for retaining OEA benefits, the overall cost-increase for employees with a Preferred Provider Organization plan is 8.3 percent, and for employees with a high deductible plan, is 37.4 percent.
Moving forward
ASUI President Jacob Lockhart said he was briefed on the university’s financial challenges early on in summer 2019, before ASUI as a whole was looped in early August. Lockhart is a part of a university working group, created to discuss and establish a more sustainable financial model and comprised of 16 people from across campus, Lockhart said.
The message, from administrators down to students, is the budget challenges facing the university should not impact the students on the day-to-day basis. Foisy said the plan to tackle the issue is designed to minimize the overall impact on the student experience. It is a topic Lockhart said students should be aware of, but not one he has seen impacting students at this point.
“I haven’t seen students impacted yet, is what I’ll say,” Lockhart said. “Because I do think that everyone is doing their absolute best to look at anything that doesn’t impact the student experience here first. If budget challenges continue, then I can’t say that students won’t be impacted, because, I mean, we’ll all be impacted. There’s only so long we can go without impacting student life.”
Meredith Spelbring and Ellen Dennis can be reached at [email protected]