Members of the campus community,
I continue to be amazed by the speed and creativity exhibited by so many across our campus community as we have adjusted to the COVID-19 pandemic. The changes necessitated by this crisis have been difficult, but we have adapted with understanding, flexibility, compassion and Warrior spirit. Thank you.
While our highest concern during this pandemic must remain the health and safety of our people, there are many other challenges we are addressing as we strive to serve our mission. Important among these is stabilizing our finances. As I have noted in prior communications, we continue to assess our financial impact in real time. We already see some negative impact, and we must plan accordingly, both in the immediate and longer terms.
In the short term, I informed higher-paid, non-represented employees last week of the need to suspend their merit increases. This week, we are taking further action. Effective immediately:
For the longer term, the Fiscal Year 2021 budget is being developed in consideration of the pandemic impact. This is a complex undertaking, as there remain significant unknowns and factors over which we have limited or no control. Among these are the progress on the fight against COVID-19 and its impact on state finances. And while we remain confident in the value of a Wayne State education, fall enrollment may be affected, depending on the pandemic’s impact to students and families.
With this in mind, we are currently analyzing an array of budget scenarios using various assumptions for revenue generation, primarily changes in enrollment and tuition rates. Based on these models, our estimates range from a best-case scenario that would require a budget reduction of 5% and a worst-case scenario of 15% or more. Potential cuts in state funding could require additional budget reductions.
In previous communications, I noted that our decisions during this crisis have been guided by three principles: 1) the safety of our community, 2) holding people “harmless” to the extent possible (i.e., mitigating the impact on students, faculty and employees) and 3) continuing our academic mission. Our FY 2021 budget recommendations will seek to balance these principles with today’s realities, but we will have to make difficult decisions.
We understand that people are concerned. Students have been asking about tuition. Faculty and staff have questions about budget cuts and the potential for layoffs, reductions in pay and furloughs. I believe it is best to be as transparent as possible with regard to these possibilities, even in the face of uncertainty.
Our financial models suggest the following:
The above scenarios appear stark, but I am cautiously optimistic. My personal opinion is that Wayne State is a very desirable university and that fall enrollment will be robust. Also, Wayne State is in a better financial position than many universities. Our cash position is strong, and our credit agencies consider our liquidity position to be excellent. Nonetheless, this pandemic will financially impact all universities, including ours, and we need to be prepared for all possibilities.
Over the coming weeks and months, the administration will work with the Academic Senate, Student Senate and collective bargaining units to further refine our scenario planning and recommend a budget to the Board of Governors that best meets the needs of our entire campus community.
As our world has shifted, I have watched the Wayne State community rise to the daunting challenges of this pandemic in extraordinary fashion, across all levels of the organization. In a time when one might expect fear, discord or a rigid adherence to the status quo, I have seen innovation, collaboration and even heroism. I couldn’t be prouder. This is undoubtedly difficult, but I remain confident that by working together, we will emerge a stronger, more resilient institution.
M. Roy Wilson