Update: May 14, 2020, 9:00 a.m.
Over the past two months, I have been heartened and uplifted by Buffalo State College’s collective response to the COVID-19 pandemic and our incredible transition to remote instruction. The tireless work of our faculty and staff advanced our unwavering dedication to keep students safe and on track toward completing their degrees. This student-first approach has long been a hallmark of Buffalo State, and thanks to you—through our transition to a virtual campus this semester—we have not only preserved that caring approach but also enhanced our commitment to students and their success. Many of you have shared with me stories of extraordinary efforts to serve our students and the Buffalo State community. Every member of our talented and valued workforce should be proud of all they have accomplished this semester to support our students and keep our institution moving forward.
The pandemic has created significant budgetary challenges. Today, I am writing you to outline the fiscal shortfalls that we face now and in the months ahead. Our campus budget forecast for 2020–2021 seems a cruel reward for the work we have done to respond to this terrible crisis. But it is a reality we must face—together.
As you know, the pandemic has wreaked havoc on the economy of New York State. As tax revenues have declined, the state Division of the Budget has forecast at least a $13 billion state budget deficit during the 2020–2021 fiscal year. SUNY System Administration has advised campuses to prepare for a 10 to 25 percent cut to direct state aid next year. At Buffalo State, our roughly $20 million in state funding allocations would be subject to these possible reductions, which would translate to a loss of between $2.1 million (10 percent cut) and $5.2 million (25 percent cut). While we remain hopeful that the next round of federal stimulus bills may mitigate funding reductions to state agencies, there are no guarantees, and therefore we must plan accordingly.
The anticipated cuts to direct state funding are just one aspect of the negative financial picture that is looming not only at Buffalo State but also at campuses across the country. The pandemic has also created a great deal of uncertainty regarding enrollment this fall for both new and returning students. Again, we are not alone in this predicament, but we must prepare for various scenarios. Additionally, in February I shared that although we were making progress to meet our three-year $7 million budget rebalancing goal, we had much more work to do to address our pre-COVID-19 fiscal challenges. While we are still on target to meet our fiscal goal to close out the rebalancing effort in 2019–2020, the previous challenges of declining enrollment and retention and the unfunded negotiated salary increases remain.
At the College Senate meeting on May 8, Vice President for Finance and Management Laura Barnum outlined our anticipated best- and worst-case operating budget scenarios for 2020–2021. In our best-case scenario, we anticipate that our enrollment would decline modestly by about 9 percent this fall, which would be similar to the decline we might have experienced before the pandemic. The best-case scenario also assumes that SUNY campuses will be permitted to increase undergraduate tuition by $200 (and graduate tuition by $230) in 2020–2021, that broad-based fees are increased by the previously planned 2.6 percent, and that negotiated salary increases are enacted and remain unfunded. The best case also anticipates a 10 percent decrease in direct state aid. With all these variables in place, we could expect an $11 million deficit in 2020–2021.
Our worst-case planning scenario assumes a significant drop in enrollment (50 percent), a 50 percent decline in residence hall revenue, no increase to tuition or fees, and a 25 percent reduction in direct state aid. This model projects a deficit of more than $27 million in 2020–2021. While I am hopeful that we will trend toward the best-case scenario, we need to be realistic about factors beyond our control that will have a significant impact on our budget situation.
Some of you may wonder about our reserves and how those funds may help us weather the storm. We are projecting a balance of approximately $8.4 million in central reserves at the end of the 2019–2020 fiscal year on June 30. That projection takes into account our initiated spending constraints, as well as more than $5 million in room, board, and fee refunds resulting from the shift to remote instruction, which will be distributed to students this month. Buffalo State did receive $5.2 million in CARES Act institutional funding to help mitigate the impact and costs related to COVID-19. We are hopeful those funds may lessen the strain on our reserves this year from the refunds, but we may be limited in how CARES institutional funding can be used.
The hardest reality we face with the anticipated deficit of $11 to $27 million is that personnel costs makes up 89 percent of our more than $130 million budget. The spending controls and hiring freeze will be important to lower our costs in the coming year, but it is unlikely that those measures—along with retirements, attrition, and cuts to OTPS budgets—will be enough to close our budget gaps.
So where do we go from here? And how can you help? We must come together to engage in cross-divisional planning and align our limited resources to ensure that our core mission of educating students is preserved. We must identify new efficiencies and embrace opportunities to generate new revenues. Staff members in Undergraduate Admissions and the Graduate School are working tirelessly to recruit new first-year, transfer, and graduate students. Academic Affairs is also preparing plans to contact all returning students this summer to check in, provide connections to emergency funding and financial aid resources (if needed), and encourage students to stay on track and resume their coursework in the fall.
As a social psychologist, I recognize that the uncertainty of what lies ahead weighs heavily on all of us. Just as we have worked together to successfully overcome the challenges of the spring semester, we must remain united in the difficult months ahead. Many of you are already involved in critical discussions to plan institutionally, within your department or division, for the realities we face. We must all realize the difficult path before us, but with innovation and creativity in our toolbox, we will come through this situation with new skills, insights, and renewed commitment. We must all ignite our best innovative selves as we meet today’s challenges. We are, and will continue to be, Buff State Strong.
I promise to keep you informed as we learn more about our anticipated budget and enrollment scenarios this summer. Thank you for your patience and for all you do for Buffalo State College.
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