Fiscal Year 2020-21 - Executive Summary

The Budget Process

Western’s state operating budget is a plan for resource use approved annually by the Board of Trustees, incorporating legislative outcomes and university decisions. More detail on the state budget process is available on Budget and Financial Planning's State Budget webpage.

State revenue collections fell sharply in 2020 due to the significant economic impacts of the coronavirus response. The first step in adjusting the university’s fiscal year budget for 2020-2021 (July 1 through June 30) was to put a preliminary, or continuation budget in place so that operations could continue in parallel with planning.

In June 2020, the Board of Trustees approved a continuation budget for fiscal year 2020-2021 (FY 2021) based on the previous fiscal year's budget as a starting point. As more information became available during the summer, a consultation group comprised of faculty, staff, and student leadership engaged in two-way communications on the budget environment, guiding principles, engagement plans, and other related topics, and a working group of budget officers coordinated across divisions. Review and comment on the budget itself remained with UPRC and the Budget Forum.

Western’s Board of Trustees adopted a final FY 2021 state operating budget at their October meeting, based on updated information on enrollments, state forecasts, and federal stimulus funding. Chapter 1 includes additional information about Western's budgeting process and FY 2021 operating budget.

FY 2021 Budget Overview

Western Washington University’s FY 2020 (2019-20) budget was approximately $190.3 million. In addition to that starting point, the continuation budget proposal included $0.8 million in new state funding to lower tuition rates at Western on the Peninsulas, a 2.5% tuition increase, and $1.2 million for collectively bargained and legislatively approved compensation increases for classified staff.

In October, the FY 2021 budget recommendations included an expenditure budget of $193.2 million backed up by three different revenue scenarios to reflect the remaining uncertainty for FY 2021, while providing a path forward for expenditure plans. That uncertainty was primarily absorbed using reserves. Because our approach to FY 2021 was primarily to use one-time and bridging strategies, the structural deficit was projected to remain in future years without an increase in revenues and/or more permanent reductions.

Uncertainty was driven by enrollments and associated tuition revenues, possible state funding reductions, and the potential for further federal stimulus support.

To balance the need for flexibility given the potential for further revenue reductions in FY 2021 and the next biennium with the need to advance our strategic plan and the moral imperative of advancing diversity, equity, and inclusion at Western, the FY 2021 operating budget recommendation included a temporary 3 percent reduction to divisional and presidential budgets on a one-time, non-recurring basis. The reduction was implemented by continuing the freeze on hiring, purchasing, and travel, with an exception process for those positions and purchases that are critical to operations and to advancing the strategic plan. In applying the reduction, divisions continued following the FY 2021 budget planning principles.

New Budget Items and Strategic Investments

The FY 2021 operating budget included $91.5 million in state appropriations for:

  • Increases to retirement benefits
  • Collectively bargained and legislatively approved compensation increases
  • Tuition reduction for the Western on the Peninsulas program
  • Opioid Overdose Medication (HB 1039)
  • Addressing Sexual Misconduct at Postsecondary Institutions (ES HB 2327)

Additionally, Western's FY 2021 budget included new institutional investments to provide Academic Affairs with $2 million in bridge funding for the preexisting deficit and $285,000 in recurring funding as part of the strategy to address the structural budget gap in that division. The University also added $500,000 in recurring funding to support IT operations and $100,000 for Teaching Assistant stipends as part of multi-year incremental commitments.

In partnership with the Foundation, Western invested $225,000 towards advancing diversity, equity and inclusion. Specifically, the FY 2021 operating budget included funding for an African-American Student Retention Counselor, anti-racism and anti-Black racism training for faculty and staff, support for wellness initiatives for BIPOC employees, and funding to support Ethnic Studies curriculum development and delivery.

FY 2021 Actuals Summary

Compared to our FY 2020 budget, recurring revenue sources for FY 2021 state operating funds (state appropriations and tuition) were down $11.7 million, or 6.1 percent. Western used temporary federal stimulus funding to make up the difference between budgeted FY 2021 expenditures ($193.2M) and actual state operating revenues ($179.6M), with the recognition that this would not be a permanent solution. FY 2021 revenues and expenditures are discussed in more detail in Chapter 2 and 3, respectively.

FY 2021 Revenues

FY 2021 Expenditures

COVID-19 Pandemic

Since the start of the pandemic, Western received stimulus funding for institutional support through the Higher Education Emergency Relief Fund (HEERF) program and the Governors’ Emergency Education Relief (GEER) fund originally authorized by the CARES Act. After FY 2020 and FY 2021 use, we expect approximately $24.5 million available for support in the FY 2021-23 biennium. These funds may be used to support both the state operating budget and self-sustaining/auxiliary areas. The FY 2021 budget recommendation used a stimulus placeholder to temporarily bridge COVID-related enrollment impacts on revenues and fund pandemic response.

Additionally, Western received and distributed direct student aid under the HEERF program, distinct from the institutional support funds. As those funds are provided directly to students, they do not appear in our operating budget.

The impact of the coronavirus on enrollments is an ongoing challenge that will likely take years to fully surmount; in FY 2021, this impact was approximately $9 million in reduced tuition revenue and 5.9 percent in enrollments.

FY 2022 Planning and Outlook

Given the relative uncertainty of recurring revenues over the biennium, the FY 2022 operating budget recommendation includes a discussion of risk: both the financial risk of overcommitting resources, and the strategic and operational risks of not moving forward with critical investments in Western’s capacity to advance the strategic plan and support core functions. Ultimately the items included in the FY 2022 recommendation are those where the risk of inaction is greater than the risk of potential budget adjustments in FY 2023.

While uncertainty on revenues is likely to remain for FY 2021-23, the FY 2022 operating budget will be developed to provide a path forward for expenditure plans. That uncertainty will primarily be reduced through the use of one-time stimulus funding while we monitor and assess the gap between recurring revenues and recurring expenditures, with particular attention to enrollment growth.

While there are several positive indicators on enrollment at this time, the current best-case scenario maintains student headcount at the FY 2021 level in FY 2022, where reduced numbers of returning students may be partially offset by growth in first-year students. The pandemic has also disrupted the ability to project enrollments in the spring, leaving a range of uncertainty for the coming fiscal year.