For the past couple of years, the new financial updates from the university have seemed grim, with the university’s 2020 State of the Budget stating that in Fiscal Year 20 alone, it experienced $22.8 million in COVID-19 revenue losses.
At the January 2021 Board of Trustees meeting, the Board explained what exactly the pandemic demanded from a financial standpoint. In Fiscal Year, or FY21, the university spent a total of $28,069,601 on personal protective equipment, protective barriers and signage, cleaning, athletics, dining halls, residence halls, testing and contact tracing, policies and procedures and more, according to OU’s summary of COVID-19 impact sheet.
As the pandemic continues, a more recent budget report presented at the January Board of Trustees meeting indicates that, overall, the university is expected to lose a total of about $44.4 million in revenue due to COVID-19 between FY20 and FY22.
According to a previous Post report, OU President Hugh Sherman said that although the university is expected to break even for FY22, it is anticipating a $35 million to $38 million deficit for FY23.
Even with the losses, Interim Vice President for Finance and Administration Joe Trubacz said the university is in a strong financial position because its reserve levels are high. That provides it with flexibility and time to adjust to any impacts to its operations, he said.
Trubacz also said part of the university’s ability to balance the budget is a result of the support it received from federal and state funds during the pandemic. The state of Ohio and the CARES Act from the U.S. Department of Treasury provided it with nearly $80 million, according to a previous Post report.
While financially burdening, the pandemic itself did not start any of the university’s issues, Richard Vedder, distinguished professor of economics emeritus, said. The university had started seeing declining enrollment back in 2016, he said, even while simultaneously increasing staff and constructing buildings. At the January 2020 Board of Trustees meeting, The Post reported that total enrollment for 2019 was down 5% from the year before.
“Our spending did not really dramatically slow down. And so, we started running budget deficits in that period,” Vedder said. “So, by the time the pandemic started, we were still in pretty decent financial shape because we had started all this with so much money. We just didn’t have as much as before.”
When Sherman took office in May 2021, Vedder said his focus seemed to be on seriously reducing the amounts of money the university spends and downsizing to reflect the declining enrollment.
Cortney Rodet, assistant professor of economics, said he believes it’s too early for optimism about enrollment given uncertainty surrounding COVID-19 and the state of the economy.
Currently, the state of Ohio is experiencing a decrease in the in-state number of eligible students while having a large number of public universities, and future students will need to be convinced that the opportunities available by coming to OU will be better than those available if they were to study at other colleges and universities in the state, he said.
At the same January 2020 Board of Trustees meeting, Deb Shaffer, former chief financial officer and current special consultant to Sherman, attributed budget crises to irresponsible fiscal management.
Vedder said the university has an ongoing staffing problem and unless the university solves that, it will have trouble with getting back to the position of “financial strength” it was once experiencing.
“The bigger staffing problem we have had is that we have allowed our non-academic staff just to grow like crazy,” he said. “The faculty are kind of sitting on pins and needles because no announcements have been made. How many staff are we gonna let go for next year?”