Decline in enrollment has implications for PSU budget

Thu, Nov 14, 2019

Dear Colleagues:

As Interim President, I am committed to providing the campus community with key information about the university budget. 

Next week, PSU expects to report our Fall enrollment to the state. Institutional enrollment is very closely linked with university finances, as student tuition accounts for almost 70 percent of our annual general fund budget. Unfortunately, enrollment this year is lower than expected, which impacts the 2019-20 budget. 

In crafting the budget, we anticipated an enrollment decline and planned accordingly. However, actual Summer and Fall enrollments fell below forecasts and are not expected to recover in subsequent terms. The lower than expected enrollment creates an estimated gross tuition revenue shortfall of over $7.5 million — approximately 3 percent of the general fund operating budget.

We must now move forward with a thoughtful plan that addresses the shortfall. I am committed to the following principles:

Be transparent about the processes and factors that influence the budget.

Minimize, whenever possible, the impact on core initiatives such as Student Success.

Empower each division to make decisions about budget reductions.

Explore and implement initiatives that draw additional resources to campus.

With these principles in mind, we are approaching the challenge in two ways. First, with fewer students enrolling there will be savings in tuition remission expenditures of about $2 million dollars. These savings alleviate some of the shortfall. Second, each campus division will be asked to underspend their 2019-2020 general fund budgets by up to 2 percent, a savings of as much as $6 million. The exact amount will be determined as the year progresses and our budget picture becomes clearer.

I know this is disappointing news, particularly in light of our recent years of budget austerity. You, our staff and faculty, have worked diligently over many years to build high-quality programs and services in the face of tight budgets. We must protect our academic investments. I am confident that each division can identify savings that protect core programs and initiatives.

Retaining and graduating students is a moral and financial imperative for our institution. In recognition of that, we will continue steadfastly our student success initiative led by Provost Susan Jeffords. I look forward to sharing more about this critical work as the year goes on.

We are investing in a two-year marketing campaign to share our compelling story, sharpen our brand, and better compete for students in a more crowded local market. We are doing exceptional work and, as so many of you have told me since I became interim president, we must shine a brighter light on our accomplishments.

Finally, our new Vice President for Enrollment Management, Chuck Knepfle, will build on the marketing campaign with the implementation of a long-term, comprehensive strategic enrollment management plan and a range of short-term initiatives to immediately bolster recruitment.

I commit to keeping the campus informed about enrollment and the budget as the year goes on. In the meantime, I offer you my encouragement, my partnership, and as always, my gratitude for your dedication to our students, our campus and our community.

Sincerely,

Stephen Percy
Interim President