June 18, 2009

WMU budget outlook

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Members of the Campus Community:

We are closing the 2008-09 fiscal year at the end of this month, and our focus is now squarely on Western Michigan University’s budget outlook for the 2009-10 fiscal year, which begins July 1.

I know you are watching the state economic situation with concern. Many of you have posed thoughtful questions about our status and some of you have even reported feeling like "the other shoe is about to drop." I want to reassure you, answer your questions and give you the most current information available.

Deficit prediction has become reality

In March, I shared with you the possibility that we would enter the new fiscal year facing a significant deficit for 2009-10. That is indeed now the reality we face. The deficit is attributed to:

• further reductions in funding from the state,
• salary and benefit increases,
• increases in operating costs, and
• the possibility of a slight decline in enrollment, as our forecast committee predicts an overall enrollment change in the range of plus or minus 1 percent over last year’s figure.

Even with a moderate projected tuition increase, a deficit of approximately $5 million will remain.

We have identified budget reduction goals across the University—in the presidential area and in each of the areas that report to our vice presidents. Those budget reduction goals define a specific dollar amount for reduction in each area. Each amount is in proportion to the area’s overall part of WMU’s annual budget. The overall reduction amount is approximately 2.3 percent of our nonexempt budget.

No hiring freeze, unit leadership will guide process

We have not implemented a hiring freeze, but rather instructed the vice presidents and deans to use their judgment in identifying where and how to meet their budget reduction targets. In addition, each vice president has been instructed to differentiate reductions among the units within his or her organization.

The leaders in individual colleges, departments and offices are the most knowledgeable and best equipped to make decisions about how those reductions will be implemented. We will rely on their judgment and count on your assistance and cooperation to help us accomplish our budget reduction goals in a way that allows us to continue carrying out our core mission, while meeting the needs of our students.

Student employment is a priority

I do ask that as your unit determines how to meet its budget reduction target, you remember to be sensitive to the extreme economic stress many of our students and their families face. This week we learned that already stretched college budgets may be further eroded by the loss of Michigan Promise Scholarships and other state funds. With that in mind, please place a high priority on preserving student employment opportunities. Having a campus job may be the only way some of our students are able to continue their studies and realize their academic goals. Their goals are, ultimately, our goals.

Some of you have asked if WMU and other public universities will be part of the state worker furloughs recently ordered by the governor. University employees are not included in that order, and do not fall into the general category of state employees.

This year’s problems are daunting, but I remain personally convinced that our resiliency is such that we will find a way to meet and overcome the challenges we face. Please do not hesitate to voice your concerns or pose questions. We all work best in an environment in which we can be candid and in which we move forward with a common understanding and commitment.

Best regards,

John M. Dunn
President