KEY

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New Budget Models

To Meet a Crisis

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BUDGETING & TUITION

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COMMITMENT S LONG-RANGE
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“ I can’t say enough good things about Axiom software. I love it, and I use it every day.
Now that I understand its power, I think about all the other things we can do in the future.”
Megan Lasso, Director, University Budget Office, Montana State University

syntellis.com/higher-education
 L
ike every other industry that centers around large numbers
of people getting together, higher education is eagerly
awaiting the rollout of a coronavirus vaccine that will
ideally allow some return to normalcy next year. In the
meantime, while the virus surges across the country, colleges are
struggling financially. Enrollments are down, many students are
paying reduced rates, and a hoped-for second stimulus package
hasn’t materialized. Colleges are being forced to make tough
decisions. What are they cutting? What are they trying to save?
How are they setting themselves up for success after the pandemic
is over?

To help colleges navigate a suddenly changed financial landscape,

The Chronicle of Higher Education recently hosted a virtual forum,
with support from Syntellis Performance Solutions, called “New
Budget Models to Meet a Crisis.” The forum, moderated by Eric
Kelderman, a senior reporter at The Chronicle, included Rhonda
Gibler, vice chancellor for finance at the University of Missouri; Eric Kelderman
Ralph W. Johnson, vice president and chief financial officer at senior reporter,
Dillard University; and Ken Kaiser, vice president, chief financial The Chronicle
officer, and treasurer at Temple University.

The following comments, which have been edited for clarity and
length, represent key takeaways from the forum. To hear the full
discussion, access the archived version here.

Eric Kelderman: Most of you have had to make some kind of budget
cuts in this environment. But there are things that are central to
your mission. How do you prevent cutting in ways that can cause
long-term damage to the university?

Ken Kaiser: Unfortunately, cutting the budget is something we’ve

gotten pretty good at, beginning in fiscal 2010 with the Great
Recession. About five years ago, we moved to a decentralized
model that puts a lot of the decision-making ability in the hands of
the folks that know the academic operation: the deans. If we have
to cut, the cut flows through the budget model. So if enrollment
is down, it will filter into the schools, and then those schools are
responsible for balancing their budget by cutting. The deans will
cut those programs or those services they can afford to cut. We also
implemented a robust benchmarking program a few years ago.
We’re able to see as we enter cuts, especially on the administrative
Ken Kaiser
side, how our expenses compare to our peers. It at least provides a vice president, CFO,
clue where we may be overspending or even areas in a crisis where and treasurer,
we may have to make investments. Temple University

Rhonda Gibler: One of the key things is having a clear

understanding of what your vision and mission for the university is.
Some of it is just being clear that even in uncertainty, you do have
to keep investing in some priorities. Folks will ask questions like,
“How can we possibly be putting new money in something like our
NextGen Precision Health facility at a time when there’s so much
going on elsewhere?” Well, that’s how you build the university for

new budget models to meet a crisis 3

 the future. You have to keep investing in the things that are the
hallmark of who you are. The decisions are hard, but if you sit down
and wait for things to get better, you won’t be doing your university
a service.

Kelderman: Are there new avenues for revenue that you think
universities should be pursuing right now that would help balance
their revenue streams to some extent?

Ralph W. Johnson: Before the pandemic, we were actually having

discussions about building a new residence hall here on campus.
So even with the pandemic, we as an administration still felt it was
important to continue. We’ve been doing the research about the
possibility of students returning to campus. And even though we
do have a higher percentage of students who are online with us
right now, we’re still pretty positive that we are going to be moving
back to a face-to-face mode of instruction. So we’re moving forward
with some of those high capital cost plans. One of the ways that we Rhonda Gibler
do that could be a public-private partnership. Other streams will vice chancellor for finance,
probably come from increasing programs that are strengths for us University of Missouri
while moving away from some other programs and projects. We just
can’t be all things to everyone.

Kaiser: Even though we’re a public university, we look very

much like a private. We only get 10 percent of our funding from
the commonwealth of Pennsylvania. So the other 90 percent is
tuition. It’s really about making sure that enrollment stays strong,
especially undergraduate enrollment. We’ve put boots on the
ground, recruiters in areas of the country that are growing, and in
some areas where Temple has a presence, mainly through athletics.
So Florida, Texas, and we just recently hired folks in California,
given all the challenges they face with having enough seats for
students. We bring a lot of high-school counselors from those
states and around the country to campus for tours. We’re always
pursuing other possible revenue sources, but sadly they don’t make
a meaningful difference for us.

Kelderman: As for communication, who do you make sure you

talk to about what the university is facing right now? The faculty,
governance groups, board members, other senior leadership,
department heads, deans?
Ralph W. Johnson
Johnson: Yes, all of those groups really. Beyond the executive vice president and CFO,
cabinet, we have a larger group called the Executive Council that Dillard University
includes the deans, assistant vice presidents, people of that nature.
I’m able to give it to them as it exists. We’re not trying to create a
black hole among the finance area because everybody plays a key
part in finances going forward for the university. It’s very helpful for
me to have those conversations and to hear the feedback from that
group so that when I’m making my recommendations or plans, I
know those things that are coming up that may be important to the
direction of the university. I try to share as much information to as
wide a group as possible.

new budget models to meet a crisis 4

 Gibler: I try to make sure to have a good relationship with the
staff advisory council leadership as well as the faculty council
and make sure they always know I’m available. The fiscal-affairs
subcommittee of our faculty council has been taking advantage of This “Key Takeaways”
that, particularly in the last number of months. They meet with me was produced by
monthly to ask all the questions they’re hearing from members of Chronicle Intelligence.
the faculty. I find that to be incredibly helpful. It gives me a sense
of the broader feeling across the campus and what sorts of things Please contact
we may need to be communicating more about. If a few people [email protected]
are asking me those questions, then there are probably quite a few with questions or comments.
more people who have them.

Kelderman: Should the pandemic make everybody rethink the

capital needs of campus? Do we still need the kinds of amenities
that we have now and continue to build?

Gibler: The lifeblood of universities is people. It’s about the

students, it’s about the faculty, it’s about the staff, all these folks
who come together trying to further knowledge. And so part of what
we’ve got to think about is what is it that supports students in their
learning and what are they really interested in having access to?
What are faculty members looking for in order to feel like they can
make a contribution in their field that is meaningful? Our campus
has been here for more than 180 years, and we have some really old
buildings. We have to think carefully about what we do to make
sure that the footprint is appropriate for the future, that we take
care of the facilities that are the most important to where we’re
headed. But we also need to hold onto the legacy so that folks still
can see the span of what we’ve contributed over time.

Kelderman: What advice do you have for your colleagues who are
new on the job and worried right now?

Kaiser: This too shall pass. Don’t do anything that you’re going
to regret from an investment perspective or make decisions that
in the long term don’t make the most sense. Make sure you’re
collaborating with everyone at the university and getting their input
so you can make the best decisions ultimately for the students and
for the long term of the university. We’re 140-something years old,
and hopefully we’ll be here in another 140 years. Just don’t panic.

Gibler: Focus each day on what you have, not what you have not,
or what you’re afraid of losing. Spend a little time reflecting on how
much good is being done already, how much more of the university
is still going on. If you spend too much time looking constantly at
what you have to cut, it can be more depressing than is necessary.

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