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Dear colleagues,

I'm delighted to announce a bit of good news today and the hope for brighter days it signals. For nearly a year, this pandemic has tested our patience and resilience, requiring us to take on new tasks or operate in different ways and deal with personal and professional hurdles while extending grace to others in the face of frustration and, at times, fear. Because of your efforts, our University had a safe and successful fall semester, and we are off to a strong start this semester. Our new student undergraduate applications are up 15% over last year and admitted students are trending close behind. Alumni giving is up 10% compared to last year. These many months later, our constituents are demonstrating they believe in �������� and our vision for the future.

The pandemic is not over, and our economy still faces substantial challenges, so we continue to keep long-term fiscal prudence front of mind as we operate in this dynamic environment. However, recent positive financial developments at the federal and state levels allow us to end early the 2020-21 fiscal year pay reductions for participating faculty, benefits-eligible/non-bargaining staff and senior leaders. We will take this action effective Monday, Feb. 1, so that those who are paid biweekly will see the new pay rate in their Feb. 16 payroll and those paid semimonthly in their Feb. 19 payroll.

The wage reductions that we are ending early were to be in effect through June 30, 2021. They were taken in order to conserve sufficient cash-on-hand as we rode out the most trying year in the University’s history. That short-term measure was paired with a 2020-21 budget that accounted for a $76 million shortfall in the wake of COVID-19’s economic toll. To date, COVID-19 has resulted in a negative impact of $21 million for last fiscal year (2019-20) and $61 million this fiscal year (2020-21), with about half the year to go.

In May, the state projected multi-billion-dollar deficits for last fiscal year and this current fiscal year, and national research was pointing to the potential for higher education to experience double-digit enrollment drops. When we set our formal budget this past September, the outlook had improved a little so that our 2020-21 shortfall was $9 million less than initially anticipated in May. This difference was returned to divisions with the budget passage in September.

The state recently updated its revenue forecast and now officials project a multi-billion-dollar surplus for this year. Consequently, we no longer anticipate a budget cut from the state this fiscal year. This turnaround for revenues at the state both last year and this year are the result of one-time injections of revenue from the federal stimulus efforts. These efforts are likely to end this year. Consequently, just as the state’s budget forecasters are, I am keeping my eye on what they identified as a structural state revenue shortfall that starts October 2022 due to a change in tax law. Some national forecasters also see the economy in 2021 as caught in a race between new more-contagious variants of COVID-19 and the pace of vaccine rollouts.

So, as welcome as I hope this salary restoration is, we also must be mindful not to prematurely declare “mission accomplished.” While we should be pleased that we continue to rebound and are making progress, we are still navigating in a sea of unknowns. As the pandemic wears on, we are starting to experience some good news, mixed with the challenges of mitigated but still very real uncertainty. As I’ve noted before, budgeting is a dynamic enterprise and when conditions change, we adapt to our environment. That said, I am committed to getting us to a position where we can avoid the all-too-common fall and mid-year budget cuts we have endured over the past decade.

This crisis is making us an even stronger University. I am convinced that universities that will be thriving in the next five years will be those making prudent forward-looking decisions today. The “new” normal probably will not look like the “old” normal because change seems to be a constant. That �������� continues to advance is undeniable evidence that your work matters and is making a difference, and for that I am deeply grateful.

Thank you,

Edward Montgomery
President