Since my last update to you on August 5, we have adjusted the current fiscal year’s operating budget and are actively engaged in addressing budget challenges for future years. I greatly appreciate the thoughtful and collaborative work of the University Budget Advisory Committee (UBAC), the Division of Administration and Finance, and all of you as we work together to make sure IUP continues to be a great university.
For this year (Fiscal Year 2013–2014), we had projected 14,800 students and an operating budget shortfall of $1,077,383. When the final numbers came in, our enrollment was a bit lower than projected, at 14,728. However, when we calculated our actual tuition and fee revenue, IUP did better than projected. The additional tuition and fee revenue, combined with a significant reduction in utility expenses, erased the projected $1,077,383 deficit. I am very pleased to say that IUP has a balanced budget this year. We should celebrate this important victory, with the understanding that we must continue to be vigilant in our work and planning. The FY 2013–14 budget is shown in more detail in a document distributed at the November 1 UBAC meeting.
We then turned our attention to the next three fiscal years. The divisions of Enrollment Management and Communications and Administration and Finance and the Office of Institutional Research, Planning, and Assessment worked over the summer to develop a tool that projects three-year budgets under a variety of assumptions. We started with a “do-nothing” option, which uses our best estimates of cost increases and assumes that our new freshman class stays at the same size as this fall and that our graduate enrollment stays flat. We shared the do-nothing projection with the UBAC in mid-September. It showed a $7.7-million deficit for FY 2014–15, growing to cumulative deficits of $14.1 million in FY 2015–16 and $19.5 million in FY 2016–17.
Of course, we do not intend to “do nothing” and have been working hard to identify additional revenue to reduce the projected shortfall. At the November 1 UBAC meeting, we discussed a revised projection based on three significant actions:
Implementing these three steps reduces our projected deficit to $2.6 million in FY 2014–15, with cumulative deficits of $9.0 million in FY 2015–16 and $14.4 million in FY 2016–17.
While much remains to be done, we have made significant progress. The details of the three projections are given in documents shared with the UBAC on November 1.
In the weeks and months ahead, we will work to identify additional revenues and relatively modest budget reductions to balance the operating budget for FY 2014–15, and we will continue to work on longer-term strategies to address FY 2015–16, FY 2016–17, and beyond.
While the projected deficits are large, IUP is in good shape and is well positioned for the future. I firmly believe that we can solve our problems if we work together now to design and implement strategic solutions.