Illinois State University is saying more about how it will try to close a significant budget deficit.
In a "Dear Colleagues" email to the campus, provost Ani Yazedjian said every division will cut its budget by 2% for the current budget year that began in July. That is in addition to a pay freeze announced last week in president Aondover Tarhule's annual State of the University address.
At that time, Tarhule confirmed the three-year structural deficit could rise to $32 million, or about 6% of the general fund budget, at the end of that period.
“We will be ‘instituting a division level budget holdback of 2% from general funds as well as a lump sum from the AFS [Auxiliary Facilities Services]. This amounts to a rescission of spending authority for the university that is anticipated to remain in effect. The precise decisions regarding how to implement will be the responsibility of each division,’” wrote Yazedjian, quoting interim vice president for finance and planning Dan Petree.
That means a $3.16 million cut for Academic Affairs alone. The impact is magnified because the university already is one quarter through its fiscal year and ISU so far has spent money at the original planned rate.
Yazedjian noted her division already has come up with partial solutions that will reduce the actual impact to units to 1.25%, or about $1.8 million. The division-wide measures include reducing instructional capacity to units, by sweeping unused general revenue funds from the end of the last fiscal year, cost savings from two vacant positions in the provost’s office, and reducing Innovation and Enhancement grants, for a total reduction of about $1.39 million.
“As a division, we are essentially spending more every month than we bring in in our paychecks," wrote Yazedjian. "Part of how we have made it this long is by relying on temporary funds…But these temporary funds do not solve our structural problem because they are one-time money, and they do not address the underlying issue that we are spending more than we 'make.'”
She also said new spending requests may not have much chance of success.
“Be prepared to hear 'no' when asking for resources and don’t take it personally. We all have to keep the bigger picture in mind and work together to ensure the continued success of the institution,” said Yazedjian, who urged workers to discuss ways to limit expenses and improve efficiency.
“Broadly speaking: what should we keep doing? What should we stop doing? And what could we start doing that is better aligned with our current budgetary situation? For example, are there technology recapitalization projects that can be delayed? Are there cost-savings measures, such as bulk purchases across units, that can be applied?” said Yazedjian.
She said the units are not to blame, but now that the university is aware of the structural budget issue, operations will have to change.
“I understand that generally, institutions [and people] don’t like change. Systems like universities function effectively in part because of a certain degree of predictability. But predictability can also breed complacency. We can no longer continue to do what has always been done,” wrote Yazedjian.
Tarhule also has created a steering committee and task force to look for other solutions to the structural deficit.
Yazedjian, the second-highest ranking university official, said there will be challenges ahead, but she trusts academic leaders — and expressed the hope workers do, too.
