Dear Members of the 两性色午夜 University Community,
This is the fourth annual budget update of my presidency. My goal each year is to provide a transparent and informative report on the financial health of 两性色午夜 and to do so in language that is accessible to someone, say, like me, who has no formal training in budgeting nor accounting. By the end of this report, if we accomplish what we set out to do, you should have as good an understanding of 两性色午夜鈥檚 annual budget and performance as I do. And starting this year, we will supplement this written report with a live broadcast discussion of this same information to be delivered by me on Nov. 3 as part of our 鈥淭alking With Todd鈥 initiative.
This report is not an annual report of the university writ large. We have plenty to brag on, lots of successes to report and much to be proud in the accomplishments of our students, faculty and staff. For this report, however, we will stick to presenting financial data and what it tells us about the fiscal health of our university.
As with every year, our goal is to finish the fiscal year with a surplus equal to roughly 1% of the university鈥檚 budget, meaning somewhere around $6.5 million on a total budget of $650 million. Ending the fiscal year (July 1-June 30) with less than 1% means we are exposing the university to potential problems and budget cuts down the road, especially if we are spending reserves to balance our budget, a practice that has created desperate problems for institutions of higher education in Ohio and nationwide for the past several years. It also would mean the absence of savings to expend in an emergency, such as to repair unexpected damage to one or more of our campuses from violent storms, which are becoming more and more prevalent of late.
On the other hand, generating a surplus well in excess of 1% can signal that we are not investing strategically enough to move the university forward as guided by our strategic plan. Unspent funds are monies that could have gone to fund more financial support for our students with the highest levels of need, or that could have gone to pay for more generous raises for our employees, or that could have launched new academic and student success programs. In short, we need to invest continually to get better continually, and annual balances dramatically above the 1% goal are a sign of missed opportunities.
We concluded Fiscal Year 2022, the fiscal year completed on June 30, 2022, with a surplus of $7.9 million, which amounts to 1.2 % of our overall budget. On the positive side, this performance reflects much better than budgeted revenues from our so-called auxiliary enterprises (think residence halls, dining and the like), which occurred because on the Kent Campus, enrollment declined less than we predicted, and more students lived on campus and purchased meal plans than we expected.
On the negative side, we missed our budgeted expectation of generating $12 million in interest earned on investments by $12 million (meaning we generated no income this year from these investments given the dramatic downturn in markets). Our Kent Campus generated a surplus of $2.0 million, while our Regional Campuses and the College of Podiatric Medicine also generated modest surpluses
The goal to generate 1% surplus seemed easier to meet before the pandemic. Since then, wide swings in state funding (first a 20% cut in state support at the beginning of the pandemic followed by a restoration of state support more quickly than we expected) combined with federal emergency relief funds drove annual fund balances nearly double our goal of 1% ($6.5 million). The dollars in these surpluses are being put to very good use, particularly to help us complete construction and other improvement projects during a moment of high inflation and vexing supply shortages. To give two examples, larger than 1% surpluses for Fiscal Year 2021 and Fiscal Year 2022 came at exactly the right time to address rising prices for the addition to the College of Aeronautics and Engineering building, as well as for the Ambassador Crawford College of Business and Entrepreneurship building project.
Dusting Off My Crystal Ball
Honestly, it doesn鈥檛 take a crystal ball to understand that inflation is increasing our costs well beyond any actual increases in state funding, which sometimes is nil, and which amounted to less than 1% each of the last two years. We can add to this challenge our continued decline in enrollment, amounting to roughly 2.4% this fall for the Kent Campus (-532 students) and 12.3% down (-775 students) on our Regional Campuses when looking at full-time equivalent (FTE) enrollment. Fewer students generate less state support and fewer tuition and fee dollars. So far, we have managed these declines through various cost control measures and through voluntary employee separation plans. By and large, we have avoided the kinds of large budget cuts across academic colleges that other universities have experienced. In the next few years, however, a potentially potent brew of less than desired increases (or a freeze) in state support combined with enrollment declines will make it more difficult to balance budgets, a situation that inflation will aggravate if it continues.
A Final Thought Before Presenting the Report
Speaking frankly, our challenges, particularly in terms of enrollment and state support, risk overshadowing the great things happening at 两性色午夜. Our Kent Campus freshman class is the eighth largest in history, and within 100 students of being our all-time largest class. International enrollments are also up, suggesting that we are moving beyond the dramatic declines in international enrollments of the past few years. Look for us to update the community on these successes and positive trends throughout the year. In the meantime, I thank each one of you reading this message for doing what you do to make ours the great university that it is. Numbers and data are important, for paying attention to them helps ensure the long-term health of the university. Yet these same numbers and raw data will never capture by themselves the greatness that is 两性色午夜. Each of you makes 两性色午夜 great, and I thank you for your contributions. Go Flashes!
Fiscal Year 2022 Performance Results
Executive Summary. In September 2021, the Board-approved budget for Fiscal Year 2022 projected revenues of $646.9 million and expenses of $646.9 million 鈥 a $39 million, or 6.4%, increase from the prior year. We ended Fiscal Year 2022 (July 1, 2021, through June 30, 2022) with an estimated $7.9 million university-wide operating budget surplus (funds not spent). Our actual revenue fell short of projections by $1.4 million. However, our expenses were $9.3 million less than projected, primarily due to significant staffing vacancies in culinary services and facilities management. The surplus is equivalent to 1.2% of the total university budget, which is just slightly larger than our annual goal of generating a 1% surplus.
两性色午夜 ended Fiscal Year 2022 (July 1, 2021, through June 30, 2022) with an operating surplus of $7.9 million (or 1.2%) on a total budget of $646.9 million. This includes a deficit of $3.9 million at the Kent Campus and surpluses of $5.9 million in the Kent Campus auxiliaries (housing, dining, athletics, parking, student center, recreation center and others), $2.4 million at the College of Podiatric Medicine and $3.5 million at the Regional Campuses.
As per standard accounting practice, this $7.9 million is now savings that are available for one-time expenditures but not for balancing annual budgets going forward. These funds will be used by the respective areas 鈥 colleges, vice presidencies, Regional Campuses, auxiliaries 鈥 for one-time expenses aligned with their respective strategic priorities.
Revenue Summary: Total revenues were $645.5 million, $1.4 million less than the $646.9 million for which we budgeted. Actual tuition and fees, which account for 59% of the university鈥檚 operating revenue, were $385.7 million (tuition) and $4.6 million (fees), 1.2% better than the budget of $381.1 million because of higher-than-budgeted enrollment on the Kent Campus offset by lower than budgeted enrollment at the Regional Campuses. Total enrollment declined for the ninth consecutive year 鈥 from a headcount of 42,513 in fall 2012 to 34,761 in fall 2021 (down 18.2% for that period).
Tuition: In response to the extreme difficulty students and families were experiencing financially because of the pandemic, the only tuition increase approved by the Board of Trustees for academic year 2021-2022 was a 2.9% increase in the Tuition Guarantee Model for the incoming freshman cohort, which will remain constant during their four years at 两性色午夜. This increase was nearly a full percentage point lower than the maximum allowable by the state cohort tuition increase formula, although most of our peer institutions increased their tuition guarantees by the full allowable amount of 3.8%. All other tuition rates for continuing undergraduate and graduate students stayed the same, including the nonresident surcharge.
State Share of Instruction (SSI): The state鈥檚 subsidy of public higher education constitutes nearly 25% of our university operating budget and is awarded entirely based on student outcomes (courses passed and degrees awarded). Therefore, our commitment to student success pays huge dividends in the form of additional state funding when we outpace our peer universities in Ohio. As a matter of fact, we have increased our share of the total statewide subsidy pool from 9.79% in Fiscal Year 2015 to 10.09% in Fiscal Year 2022, which translates to nearly $4.8 million in additional funding. The good news is that we received exactly the amount of SSI that we budgeted 鈥 $159.6 million 鈥 in Fiscal Year 2022.
Income on Our Investments: Consistent with general market trends, which does not include funds managed by the 两性色午夜 University Foundation, this area performed poorly this fiscal year. We started the year off with strong investment performance. Then, beginning in January 2022, investment returns began to decline dramatically because of escalating inflation and recession concerns, and we ended the year with a $17.4 million investment loss. Therefore, although we budgeted $12 million for the year, there was no investment income to support operations in Fiscal Year 2022.
University Auxiliary Revenues: (housing, dining, athletics, parking, student center, recreation center and others) rebounded significantly as students returned to campus after the pandemic. Residence hall occupancy grew from 5,181 students in 2021 to 5,641 in 2022, generating $5.1 million in revenue above budget while we still dedicated nearly 350 beds to isolation/quarantine and continued not offering triple and quadruple occupancy rooms as a result of the pandemic. Effective July 1, 2021, we successfully transitioned from a contracted dining services model with Aramark and relaunched this important auxiliary as University Culinary Services under a self-operated model. This strategic shift is just one example of how our university decision-making is guided by what is best for our students in the most fiscally responsible way. Increased occupancy drove dining and catering revenue; more than 6,229 meal plans sold generated $1.7 million in revenue above budget. Student presence was not the only noticeable change in our auxiliaries: A return to normal athletic competition was also welcomed, and stronger ticket sales and sponsorship revenues pushed the Department of Intercollegiate Athletics over its conservative revenue budget by $1.6 million.
We entered academic year 2021-2022 with the understanding that the pandemic would continue to impact our operations and university life. The efforts of the Pandemic Leadership Committee and the guidance of the Pandemic Institutionalization Effort led by Manfred van Dulmen, Ph.D., Julie Volcheck and Melissa Zullo, Ph.D., served us impeccably as we spent pandemic relief funds awarded to the university in a careful and thoughtful manner. During Fiscal Year 2022, 两性色午夜 received a total of $67.9 million to cover health-related expenses, lost revenues and student emergency grants 鈥 these pandemic relief funds continued to be managed separately from the university operating budget. At the end of the fiscal year, we had a total of $23.1 million allocated for internal one-time funding priorities as well as $2.7 million yet to be spent. Overall, the university has received $90.7 million in pandemic relief funds for institutional needs (healthcare supplies, supplies for operations, information technology enhancements, space reconfiguration and lost revenues/student refunds) and $51.6 million for emergency grants awarded directly to students. We know that without these valuable funding resources, navigating through the pandemic would have been next to impossible, and we are grateful for the support of our federal and state leaders.
Expense Summary. Our expenses for Fiscal Year 2022 were less than projected primarily due to the difficulty in hiring a full contingent of employees in dining and facilities management.
Salaries and Wages: This expense category totaled $287.7 million, $8 million (or 2.8%) below the budget of $295.7 million. This directly reflects our challenges in retaining and hiring staff and significant position vacancies 鈥 most notably in facilities management and culinary services 鈥 during the societal phenomenon referred to as the Great Resignation. Through the dedicated efforts of our faculty and staff, we are able to maintain service levels. Delivering on our philosophy of working lean 鈥 while treating our staff well with competitive wages, benefits and work-life balance/enhancements 鈥 will continue to be a strategic priority. Staffing vacancies also resulted in benefit costs below projections as retirement, healthcare, compensated absences and other fringe benefits totaled $112.0 million, $1.8 million (or 1.6%) below the budget of $113.8 million. 两性色午夜 now has 661 (13%) fewer employees than we did before the pandemic.
Financial Aid: Merit scholarships and need-based aid grew 285% over the last decade and totaled $85.4 million, or 13.4% of total expenses. We continued to adjust the balance between merit and need-based scholarships to better reflect our history of access and affordability. We underscored our focus and commitment to student access and success when we announced the Flashes Go Further Scholarship Program in July 2021. This massive, need-based student aid program is focused on getting even more Golden Flashes to graduation by covering the cost of in-state tuition for students with the highest levels of financial need. The program benefits entering 两性色午夜 freshmen through graduating seniors from the state of Ohio whose Expected Family Contribution (EFC) is $10,000 or less. These recipients receive aid to cover the full cost of tuition, general fees and up to $1,200 a year for books so they can graduate free of debt from tuition, general fees and books. When fully implemented, annual funding for the program will reach $20 million by Fiscal Year 2025.
Other Expenses: Supplies, utilities, maintenance and repairs, travel, print and postage totaled $109.3 million, approximately $1.1 million (or 1%) below the budget of $110.4 million and $22.8 million more than the prior year鈥檚 actual expense because of the significant increase in on-campus operations and activity.
Construction and Capital Projects: As you venture across our campuses, you see a variety of construction projects underway: Crawford Hall (the new home for our Ambassador Crawford College of Business and Entrepreneurship); the College of Aeronautics and Engineering building addition; White Hall building renovation; Terrace Drive realignment; Henderson Hall heating, ventilating and air conditioning (HVAC); Tuscarawas Campus Founders Hall; College of Podiatric Medicine energy conservation; parking lot maintenance; and the list goes on. This fiscal year, the university spent $25 million on construction and renovation projects funded by several sources, such as university facility funds, previously appropriated funding from the state, bond proceeds and donations. Every two years, the state of Ohio typically funds a portion of building renovation costs on public university campuses. For this year, the state increased this funding for 两性色午夜 projects by $3.6 million as a result of an allocation change that recognized more recent enrollment figures among the 14 Ohio public universities. Projects funded by these state capital funds include the Front Campus chilled water loop, Beall Hall design studio space renovation, Cunningham Hall deferred maintenance (cage washer), campus American With Disabilities Act (ADA) improvements, Geauga Campus nursing skills lab renovation, Stark Campus Fine Arts Building roof, Salem Campus classroom rooftop, Trumbull Library and Theater roof, and several others.
Debt Service Payments: Debt service payments are a considerable expense to the university, totaling $43.2 million last year ($27.1 million in principal and $16.1 million in interest payments). Because paying this debt is a considerable expense, we continually focus on reducing financing costs when opportunities arise. In fact, over the past five years, we have successfully delivered four bond refinancings of our existing debt, translating to an average of $2.6 million less in annual costs.
Improving efficiencies over the past six years has continued to help us manage the decline in revenues in the wake of decreasing enrollment. Strategies such as employee separation plans, continued strategic hiring and position control, investment management, healthcare plan redesign, the reduction of energy costs through performance contracting and sustainability measures, and innovative sourcing strategies like group purchasing have led the way. In December 2021, 两性色午夜 reported more than $30.9 million in efficiency savings for Fiscal Year 2021 compared to the original estimate of $25.6 million. Our strategic focus on cost-saving measures has prevented the need for harsh and abrupt budget cuts even though enrollments have steadily decreased.
Our careful fiscal stewardship yielded a state of Ohio financial health score of 3.9 on a 0-5 scale, positioning 两性色午夜 in the upper half of Ohio鈥檚 public universities. This financial score is a statutory measure of financial health comprising three key ratios: primary reserve, viability and net income. Our score for Fiscal Year 2022 shows that our reserves are sound, outstanding debt is reasonable and we must continue to align expenses with declining tuition and fee and flat SSI revenues.
Other independent, external measures of our university鈥檚 financial health are provided by the Moody鈥檚 and Standard & Poor鈥檚 ratings agencies. While many institutions have experienced ratings downgrades and negative outlooks as of late, our most recent bond ratings were affirmed in May 2022 at Aa3/Stable Outlook (Moody鈥檚) and A+/Stable Outlook (Standard & Poor鈥檚). Both ratings agencies cited our leadership, solid management and governance, the university鈥檚 reserves, manageable debt and our decisive steps to balance the annual budgets while reinforcing that our challenges continue to be declining enrollment, thinning operating margins and challenging demographics (a projected 20% or more decline in the number of high school graduates in Northeast Ohio over the next decade). We anticipate that a review of our ratings will occur again this year with similar results.
Fiscal Year 2023 Approved Budget
Executive Summary. We prepared a balanced budget of $661.3 million, an increase of $14.4 million, or 2.2% from the prior year鈥檚 approved budget. Our work continues to be marked by a series of uncertainties, such as COVID-19, inflation, low unemployment levels and supply chain instability.
In December 2021, we began our customary budget planning activities in anticipation of a May 2022 Board review and approval, understanding that uncertainties would continue related to enrollment management (both recruiting new students and retaining current students) and the economic aftereffects of the COVID-19 pandemic, specifically inflation, investment market volatility, availability of goods and materials, and difficulties in retaining and hiring employees.
An important strategy we implemented early in this budget planning process was our newly adopted annual five-year financial forecasting model. Based on conservative yet realistic assumptions (flat enrollment, flat or slightly increased state subsidy, slight increases in tuition for non-Tuition Guarantee students, 5% healthcare inflation, maintaining current staffing levels, competitive wage increases, fully funding the Flashes Go Further Scholarship Program and no new debt issued), we can expect that annual deficits may accumulate to nearly $30 million if we do not act to increase revenues and concurrently reduce expenses. However, we can develop proactive annual budget-balancing actions and afford ourselves the time to engage stakeholders meaningfully and deliberately in solutions rather than reactively and abruptly cut budgets in an uninformed and nonstrategic manner. We all recognize that without careful judgment and management of our financial resources, our university can quickly fall victim to an accelerated structural budget deficit.
In February 2022, we initiated the Fiscal Year 2023 budget development process with the following objectives:
- Focus on core activities: access/completion/research and creative activities/employee well-being.
- Limit new hires so that we can provide raises to non-represented employees.
- Continue to limit administrative and non-academic expenditures through reorganization, shared services and the like.
- Preserve our sound financial position (budget expenses to projected operating revenues).
On May 25, 2022, the Board of Trustees approved a balanced budget of $661.3 million in revenues and $661.3 million in expenses, which is $14.4 million higher than the Fiscal Year 2022 approved budget.
Revenue Summary. Tuition and fee revenue, based on a conservatively projected 2% decrease in enrollment at the Kent Campus and 12% decrease across the Regional Campuses, coupled with tuition and fee rates authorized by the Board, is budgeted at $385.5 million, nearly $4.5 million higher than last fiscal year. Tuition increases of 4.6% for new freshman Tuition Guarantee students (which is then frozen for four years), 2.0% for continuing undergraduate non-Tuition Guarantee students (the first increase these students have experienced since entering the university in 2018 or prior) and 2.6% for graduate students and non-resident surcharge were implemented for the 2022 Fall Semester. For the 10th consecutive year, we are experiencing a year-over-year enrollment decline and, as a result, tuition and fee revenue continues to be our biggest revenue challenge.
Our strategic enrollment management efforts continue, and all of us are engaged in the work of stabilizing enrollment at 两性色午夜. Our retention rate (the percentage of freshmen who return for the sophomore year) declined noticeably during the pandemic, and we continue to work with these students to help them recover academically as well as provide them with the support services they need to persist and graduate. The decline in retention accounted for much of the 2.5% decline in enrollment on the Kent Campus. On the other hand, we welcomed 4,251 new freshmen in fall 2022, the eighth-highest number in Kent Campus history and within 100 students of our all-time record for freshman enrollment. The fall 2022 entering class also boasts additional distinctions: 19% from traditionally underrepresented groups, an average high school GPA of 3.51 and an average ACT score of 21.64. We also continue to double down on need-based student aid by fully funding year two of the Flashes Go Further Scholarship Program, in which we cover the unmet tuition and fee financial need of those students and families with an expected family contribution of $10,000 or less. More than 24% of the entering freshmen benefited from this highly valuable program that resonates with our university鈥檚 mission of access and affordability.
For Fiscal Year 2023, we project we will receive $700,000 less from SSI than the previous year due to enrollment and retention declines. This is a reminder that embracing our efforts to increase student success will pay off not only in meeting our mission of educating and graduating more students, it also will generate increasing amounts of state support if we continue to outperform our peer Inter-University Council of Ohio (IUC) institutions in terms of course and degree completions.
For the second year in a row, our biggest revenue recovery this budget year is in the auxiliaries, with nearly $8.6 million (a 10.7% increase) in additional revenue compared to last year as a result of more normal on-campus student residency, dining plan participation and a return to normal mode of intercollegiate athletic competition. For fall 2022, we welcomed 5,713 students into our residence halls, nearly 413 more than last year, with a similar increase in the number of students participating in dining plans. The Department of Intercollegiate Athletics also expects to continue toward a more normal year of competition and operations with expected normalized NCAA and Mid-American Conference (MAC) revenues and a slight increase in the general fee allocation.
Investment income dedicated to supporting operating activities is budgeted at $12 million, the same amount as the prior year. We recognize that the negative investment performance for the last six months of Fiscal Year 2022 yielded an investment loss last year, and the investment market continues to deliver uncertain and choppy results almost daily. The reassuring point is that our investment portfolio is structured and managed well, is highly diversified and over the long term, is positioned to deliver a reasonable return.
Expense Summary. As we grow out of the pandemic, we continue balancing expenses to projected revenues as we focus resources to our core activities (access, completion and research), maintain current staffing levels while concurrently increasing wages and continue to revamp the university operating cost structure.
We truly value our faculty and staff, and just one small, yet meaningful, example of that is providing a 3% wage increase for all non-represented staff during these challenging economic times. For 两性色午夜鈥檚 bargaining units, wage increases will follow the respective contracts.
We also know that healthcare costs drive our expenses. We continue to emphasize quality and affordable healthcare benefits while, at the same time, combatting inflationary factors that could render this vital benefit financially unsustainable. As announced during the kickoff for Benefits Open Enrollment for the calendar year 2023, the only change we will be implementing in our healthcare plan design for the upcoming year is a working spouse fee for non-represented staff. The approach is simple: If a non-represented staff member鈥檚 spouse or domestic partner is on the university鈥檚 healthcare plan and they are offered medical benefits by their respective employer, they will have the choice of either (1) the spouse or domestic partner opting for their employer鈥檚 healthcare plan or (2) the spouse or domestic partner continuing on the university鈥檚 healthcare plan with the employee paying a fee to help offset claims costs. The working spouse fee will be on a tiered scale ($30, $45 or $60 per pay period) based on salary. Making these changes is not easy, but it is a fair and equitable approach to maintaining a competitive and affordable healthcare benefit for all employees.
Inflation presents a very real challenge for this budget year. For example, the cost of property and casualty insurance for the university has grown 300% over the past six years 鈥 from $900,000 per year in Fiscal Year 2018 to $2.8 million in Fiscal Year 2023. The cost of electricity, which last year cost the university 3.3 cents per kilowatt hour, now costs 7 cents per kilowatt hour, a nearly $2 million increase for this year鈥檚 budget. Taking all of this into consideration, we continued to reallocate and realign budgets to absorb these increases.
We recognize that access and affordability are in our institutional DNA and that this commitment to access and student success drives our recently updated strategic plan, Flashes Together: A Strategic Roadmap to a Distinctive 两性色午夜. Therefore, we budgeted an additional $5 million in base funding this year to fully fund the second year of the Flashes Go Further Scholarship Program with an additional $10 million of additional funding expected over the next two years to achieve our strategic priority of a $20 million Flashes Go Further Scholarship Program budget. This continues to be a heavy lift, but increasing need-based scholarships is the right thing to do for access and degree completion.
The general fee, which represents about 16% of tuition revenue collected, is used to fund various activities, such as noninstructional student support and success services, mental health, intercollegiate athletics, facility needs and distance learning. The total projected budget for these purposes is $40 million, an increase of $2.9 million from last year.
Finally, one of the areas hit hardest by inflation is the cost of construction, which includes the cost of materials, labor shortages, professional services fees, lack of availability of machinery, equipment, furniture/fixtures and surcharges on fuel. All projects either currently in design or under construction have experienced cost increases of 15% to 20%, which we are funding through savings (one reason we budget a 1% budget surplus each year) and by reallocating state funds available for projects. Examples include Crawford Hall ($9.5 million budget amendment); Front Campus chilled water loop ($1.5 million budget amendment); Beall Hall design studio space renovation ($1.3 million budget amendment); and Cunningham Hall lab space renovation ($600,000 budget amendment). Unfortunately, it appears that these issues will continue through the remainder of this fiscal year and into the next.
Fiscal Year 2024: Looking Ahead
Executive Summary. Pandemic uncertainties continue to loom even while we continue to respond to ongoing enrollment challenges, severe economic headwinds (inflation, supply chain and volatile investment market) and the beginning of the biennium state budget development process, all of which will have a bearing on how we sustain our university鈥檚 financial viability.
As we look ahead to next fiscal year, we recognize that enrollment challenges will continue as we draw closer to the demographic cliff (the drop in college enrollments due to falling birthrates in the aftermath of the 2008 Great Recession and slowing immigration) in the year 2025, which according to the Western Interstate Commission on Higher Education, translates to an 11% decline in the size of the Ohio high school graduating class in 2037 when compared to 2019. In a proactive manner, in October 2021, we released our Strategic Enrollment Management Plan that will enable 两性色午夜 to better manage the entire student life cycle. Instead of simply providing enrollment services, we will embrace comprehensive strategic planning focused on identifying, recruiting, enrolling, retaining and graduating a student body in accordance with our mission while maintaining fiscal sustainability.
Enrollment will be a key revenue driver as we update our five-year financial forecast. Equally as important will be the results of the state budget development process for Fiscal Years 2024-2025, which begins this fall. The state budget is a critical component of our university鈥檚 operating budget and provides significant resources related to SSI, tuition and fee caps, and need-based funding in the form of the Ohio College Opportunity Grant (OCOG). Considering the ongoing economic challenges, we will engage with officials in Columbus to support significant increases in SSI to offset the impact of continued inflation, modest tuition increases and increased funding for the statewide OCOG program of scholarships to those with high financial need. We will also seek state funding for workforce development programs, particularly on our Regional Campuses, as well as funds to demolish functionally obsolete buildings across all of our campuses. On the Kent Campus, the latter would help fund the planned demolition of Verder Hall and the Business Administration Building (the current Ambassador Crawford College of Business and Entrepreneurship building) and create savings of more than $25 million in reduced maintenance and operations.
The economic challenges brought on by historically high, prolonged inflation are felt by all of our students, faculty and staff and directly affect their livelihood and well-being. It鈥檚 critical to continue to provide competitive wages and benefits through managing staffing levels and gains in operating efficiencies. Our mantra must continue to be focused on retaining current faculty and staff, treating them well and maintaining our stature in the community as a 鈥淕reat College to Work For,鈥 a designation 两性色午夜 has received for the 11th time, and as a top employer (No. 3 in Ohio).
We will face additional financial headwinds within the Department of Intercollegiate Athletics as a result of reforms proposed by the NCAA Transformation Committee and the Supreme Court ruling on the Alston case. We await further guidance from both the NCAA and the MAC on how these changes could affect our budget and financial commitments to student-athletes and how to fund them in the most appropriate manner.
As we continue to emerge from the pre-vaccine phase of the pandemic, we must continue to take stock of where we are and what lies ahead and emphasize scenario planning and our five-year financial forecasting model, which will allow us to develop strategies for revenue growth, revamping our operating cost structure and understanding the physical spaces and virtual environments we must maintain in order to meet our university mission. We must be strategically focused, data-informed, and results-oriented because in the words of renowned author and venture capitalist John Doerr: 鈥淚deas are easy. Execution is everything. It takes a team to win.鈥 In this manner, we will continue to achieve and deliver our university鈥檚 commitment to teaching, learning and research in a fiscally responsible manner.
Sincerely,
Todd Diacon
President