Budget Office

Budget Reduction and Efficiency Actions

Budget Reduction and Efficiency Actions
2008-2011

Over the past three years, Washington State University has managed its way through a succession of budget reductions imposed by the State of Washington.

In May 2007, Washington Governor Chris Gregoire signed the 2007-2009 biennial budget, which had been passed by the Washington State Legislature in April.

That budget included funds for increases in Washington State University's student enrollment; added research funding for agriculture and biofuels; provided for salary increases averaging 3.2 percent for WSU employees; called for tuition increases of up to 7 percent in each of the two years of the biennium.

While that budget was widely seen to be a positive one - both for higher education and for the state in general - it marked a high water mark in state funding, as a result of the impending contraction in the economy.

In retrospect, the National Bureau of Economic Research now designates December 2007 as the starting point for the economic downturn, referred to as the Great Recession.

Early Steps

As indications of the recession became apparent in early 2008, WSU acted to restrain expenses.

In April 2008, President Elson S. Floyd instituted a slowdown in hiring by the university. Floyd directed that WSU's Budget Office should be consulted before filling uncommitted vacant positions or awarding promotions. He imposed a moratorium on new academic programs, degrees, and courses pending completion of an ongoing Academic Affairs Prioritization Process.

The Academic Affairs Prioritization Process (known as A2P2) was initiated shortly after President Floyd took over as WSU's 10th president in May 2007. The goal of the process was to identify academic areas of the university that would be targeted for increased investment. Given the budgetary reverses, however, it instead provided guidance to the university as decisions were made on course and program eliminations.

In August, 2008, the WSU Board of Regents delegated authority to President Floyd to implement the A2P2 task force recommendations.

In December 2008, a list of 954 courses that WSU proposed to cut from its catalog was posted on-line for review, as a result of the A2P2 process. That total represented 18 percent of the 5,314 courses in the WSU catalog. Enrollment levels served as the principal criteria for placing courses on the elimination list.

The list of course eliminations and program changes developed through A2P2 went to the Faculty Senate, which approved the changes in April 2009.

The First Round of State Cuts

Washington State University was required to return $10.5 million of the 2007-2009 biennial appropriation to the Office of Financial Management (the governor's office) by June 30, 2009.

The steps ordered by President Floyd in April 2008 saved about $3 million by the end of the 2008-09 fiscal year, savings that were used to offset a portion of the state cuts.

In achieving the balance of the cuts, academic instruction, the libraries, the regional campuses, and the new Murrow College were protected from the full brunt of the reduction. Overall, administrative areas, which hold about 33 percent of the university's permanent funds, were assessed 58 percent of the reductions. Academic areas, including the regional campuses, which hold about 67 percent of the university's permanent funds, were assessed 42 percent of the cut.

Also, in December 2008, President Floyd and Warwick M. Bayly, provost and executive vice president, convened the University Budget Committee, consisting of representatives from across the university, to discuss possible university responses to budget cuts expected in the next biennial budget.

In February 2009, the WSU Board of Regents approved a Voluntary Early Retirement Incentive Program for employees in the Washington State University Retirement Plan. Eventually, 47 employees took advantage of the 2009 WSU Voluntary Early Retirement Incentive: 30 faculty, 16 administrative professional, and one civil service.

The 2009-2011 Biennial Budget

The 2009-2011 biennial budget approved by the Washington Legislature, and sent to Governor Gregoire for her signature, included a net operating budget reduction of $54.2 million or 10.38 percent for WSU in 2009-2011. This budget was developed using federal stimulus dollars, which are not expected to be available beyond the 2009-11 biennium, and a 14 percent increase in tuition for resident undergraduate students for each of the two years.

The budget plan that the university enacted in response to these reductions drew upon the work of many members of the university community who worked on the Academic Affairs Prioritization Process and the University Budget Committee. It also included the savings achieved as a result of the April 2008 hiring freeze and the Voluntary Early Retirement Incentive.

In the final plan, put in place on July 1, 2009, the university cut approximately 360 vacant and filled jobs university-wide, eliminated three academic programs and employed a number of administrative cost-cutting measures across the university to reduce spending.

This budget plan:

* Phased out the Department of Theater and Dance

* Phased out the Department of Community and Rural Sociology

* Eliminated the major in German, effective July 2011

* Closed the IMPACT Center

* Reduced university advertising expenditures significantly

* Closed nine community learning centers (Yakima Center was later reopened)

* Consolidated travel services and accounts payable offices

* Reduced general custodial and maintenance services

The president, provost, deans, chancellors and vice presidents agreed to participate in and contribute to WSU excellence funds at an aggregate level of 5 percent of base salary. (For the president, this was in addition to his voluntary salary reduction of $100,000.)

Colleges and departments across the university phased out a variety of programs and majors, largely in keeping with A2P2 recommendations.

In January 2010, the Board of Regents approved a Voluntary Retirement Incentive Plan for eligible WSU employees who are members of a State of Washington administered retirement system. In March 2010, the Board of Regents approved a second Voluntary Early Retirement Incentive Program for employees in the Washington State University Retirement Plan, similar to the plan offered in 2009.

In 2010, WSU had 25 people retire through the VERI (the early retirement incentive for WSURP participants), and 42 people retire through the VRIP (the PERS retirement incentive).

April 2010, the university began the process to consolidate two areas within Business and Finance -- Facilities Operations and Capital Planning and Development - as of July 1, 2010. The move was made to save money, to eliminate duplication, to create a sense of "one-stop shopping" for the customers who work with these offices.

The 2010 Supplemental Cuts

In May 2010, the Legislature approved and the governor signed a supplemental budget, reducing WSU's allocation by an additional $13.5 million for the 2011 fiscal year, bringing the total reduction for the biennium to about $68 million.

The university announced that, when positions became vacant -- either through retirement or attrition - they would come under the authority of the provost's office. There, the decision would be made which positions could be eliminated, which could be consolidated and which would be filled. The money from positions that were not filled went back into the central budget to offset $13.5 million reduction.

In August 2010, WSU announced that it was restricting the size of the incoming Pullman freshman class in recognition of a shortage of available resources.

That same month, President Floyd announced an administrative reorganization, reducing the number of vice presidencies from nine to six and combining several administrative units to attain economies of scale and to reduce costs. The university also launched a study of how IT resources across the university might be reorganized to deliver services in the most cost-efficient manner.

In December 2010, the president and provost accepted plans submitted by vice presidents and academic deans to finish addressing the $13.5 million permanent cut that had been enacted by the Legislature for the 2010-11 fiscal year.

Under the plans, about 32 currently filled positions were eliminated. An additional 126 vacant positions were also eliminated. The average permanent budget reduction for academic colleges was 4.4 percent. The average permanent reduction for vice presidential and chancellor areas was 7 percent.

During the December 11, 2010 special session, the Legislature approved an additional $7.48 million temporary budget cut on the university for the 2011 fiscal year.

The colleges, administrative units and urban campuses submitted plans that called for a variety of steps to achieve these one-time savings - including holding positions open, reductions in travel and equipment purchases, transfer of some positions to grant funding, and increased use of temporary instructional faculty.

Cumulative Impacts Over Three Years

* 16 degrees or program options phased out

* 8 degrees consolidated or reduced

* 7 academic units consolidated, reduced or phased out

* 3 academic program areas eliminated

* 9 administrative units consolidated to 6

* 1,080 courses removed from catalog

* 517 jobs (FTEs) eliminated

WSU has lost approximately 30 percent of its operating budget as allocated by the Legislature. The reductions have been devastating for the university threatening both excellence and access throughout the multi-campus system.

The 2011 Legislative Session has begun with even more significant cuts under discussion in Olympia. Cuts of the magnitude being contemplated would force further fundamental changes in how the university operates, what programs it can offer and how accessible it will be to today's students and tomorrow's.

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