Wright State University’s summer tuition revenue is down by around $1 million this year, possibly sinking one of the school’s last best hopes at avoiding state fiscal watch.
Summer classes started at Wright State on May 7 and although about two-thirds of tuition from those classes will be applied to this year’s budget, it was not what administrators hoped for, said chief business officer Walt Branson.
The university started slashing more than $30.8 million from the school’s budget nearly a year ago to keep it falling below a state-required ratio for its reserves funds. The cuts were made in an attempt to begin correcting years of overspending at Wright State that decreased reserve funds from $162 million in 2012 to a projected $31 million in 2017.
In an attempt to better track summer revenue this year, Wright State kicked students out of classes before they started if students had not paid their bill instead of three weeks into the summer session. The change in policy, Branson said, allowed WSU to see the revenue loss right away instead of at the end of the month.
“This gives us an opportunity to react much quicker,” Branson said. “Otherwise, we’d be sitting here until the end of May and crossing our fingers.”
The state measures every public college’s fiscal health with something called a “Senate Bill 6 score,” an annual rating of 0 to 5. Any school that falls below a 1.75 two years in a row is put on notice. Wright State projected its score last year was a .8, meaning one more year below a 1.75 would put the school on fiscal watch.
Under fiscal watch status, WSU trustees and administration would have to adopt a financial recovery plan with an eye toward ending the status of fiscal watch within three years, according to state law. They would be required to produce forecasts and plans for getting the school’s finances back on track, and if the administration did not do this the chancellor of the Ohio Department of Higher Education could appoint someone to make those decisions for the university.
The summer revenue dip is just the latest development in Wright State’s ongoing budget crisis.
Since then, health care costs have come in around $5.5 million over budget this year and have fluctuated by hundreds of thousands of dollars from week to week.
At one point in April, WSU’s medical claims totaled more than $631,000 for just one week, according to the university. Since then, those costs appear to have declined to around $337,000 a week. The higher than projected health claims came as a surprise, as did millions in scholarship and fellow ship costs earlier this year.
“We’ve been surprised all year,” said board chairman Doug Fecher. “I don’t know how hopeful to be at this point, I just dont know.”
Despite the volatile revenues and costs, WSU administrators hope their recent $10 million in additional budget cuts will keep the school from going on fiscal watch, though Branson has said it may be unavoidable at this point. Trustee Sean Fitzpatrick has also said the school appears to be “on trajectory” for fiscal watch.
As they are doing with health care costs, administrators are keeping a weekly record of non-compensation spending.
In the last month, weekly spending peaked at nearly $950,000 during the week ending on April 22 and declined to just over $471,000 as of the first week of May, according to data provided by WSU. With spring classes and and commencement completed, that number should remain low until the fall, Branson said.
At the end of April, Wright State had slashed its spending by $43 million compared to the same time the year before, according to the university.
The budget cuts and the constant public spending updates have put “the university behind the 8-ball,” this year, Fecher said. But, everyone on campus has been understanding about what needs to be done to help the university, both Fecher and Branson said.
“There’s no doubt the campus community is kind of all in on making sure we finish the year as strong as possible,” Fecher said. “We’re hoping for the best but we’re watching the numbers.”
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