Editor’s note: This is the first story in a series highlighting the financial state of Wright State University.
FAIRBORN — Wright State University is in-process of tightening its financial belt to avoid being placed on fiscal watch in the coming years. Officials hosted a forum Jan. 24 to explain its current financial status — but not without hearing feedback from faculty, staff and students.
“It’s becoming more likely that we will not go onto state fiscal watch,” Wright State President Cheryl Schrader said during the forum. “… This will not be easy. We continue to make difficult decisions for long-term viability.”
According to Chief Business Officer Walt Branson, Wright State’s three major sources of income include tuition and fees, state appropriations and other income. He pointed out that as state funding decreased in 2004, tuition and fees became the university’s largest source of income. As a result, the school became more dependent on enrollment. Branson highlighted that tuition and fees provide approximately 60 percent of Wright State’s income, or $172 million. Meanwhile, state funding gives 30 percent and “everything else,” such as grants, contracts, sales and services, makes up the remaining 10 percent of the budget.
Branson explained that lower-level courses provide more money per credit hour compared to higher-level, graduate and doctoral courses. Part of the challenge Wright State faces, Branson said, is that a number of its students will take lower-level courses at a community college or while they are still in high school.
“As we lose lower-division, our big challenge is figuring out how to make that up to continue to support higher-division, graduate and doctoral programs,” Branson said.
Wright State spends 65 percent of its income on compensation for employees; 33 percent goes toward other expenses, or non-compensation expenses, and 2 percent is placed in the university’s return reserves.
“We’ve come a long way in our budget remediation and our budget savings — but one of the things we really have to be cognizant about is that we still have a little ways to go,” Branson said. “To achieve the goal, to make this budget, we still have to realize savings of about $5 million this year. We believe we’re on track to do that. Primarily it’s going to come from vacant positions that are opening, will continue to open or will remain open.”
He also highlighted that medical claims are exceeding what the medical benefit charge rate generates. As a result, Wright State officials will consider making adjustments of $2 million or more as this year concludes.
“We would really like to have the university community understand that cost savings measures we’ve taken already — the reductions in spending, the [holding back] on non-personnel expenses — we really need to continue in order to be able to not overspend on our budget this year.” Branson added.
Looking ahead, Wright State is anticipating a 2 percent reduction in enrollment in 2019, which will cost the university $3.5 million or take “roughly $2-3 million” out of tuition and fees available for next year. At the same time, Wright State has requested that the state approve the implementation of the guaranteed tuition program, which includes a rate increase that will generate $1.2 million.
“What we end up with is about $2.3 million less revenue to work with as a starting point to work with next year in the [2019 budget] model,” Branson said, adding that the forecasted 2019 budget is expected to change “… If I had to summarize where we are now in terms of what we know and what we’re anticipating, we’ve got to save $5 million out of this year’s budget. We’re on our way to do that. We have another $2 million we have to account for somewhere for the medical coverage that’s exceeding what the charge rate is generating — around another $5 million next year.”
Moving forward, Wright State is looking toward emphasizing enrollment and tuition for fall, spring and summer semesters.
Contact Whitney Vickers at 937-502-4532.