University of Mississippi preparing for budget cuts due to the impact of COVID-19
The University of Mississippi is preparing for potentially large budget cuts due to the financial effects of COVID-19.
On Thursday, Chancellor Glenn Boyce provided an update on the University’s budget, stating the school was able to get through the current fiscal year without implementing any budget reductions, but the 2021 fiscal year will not fare as well.
“The impact of the COVID-19 pandemic has forced us to rethink almost every aspect of our campus operations, including finances,” Boyce’s statement read. “The financial impact of the pandemic has already been significant for us as we provided millions in refunds from the spring semester, invested in new ways to deliver courses remotely, incurred added costs to implement new protocols for the Fall 2020 semester and more.”
Boyce stated many of the University’s pandemic-related expenses may be eligible for reimbursement through the CARES Act funding, but other expenses are not eligible for reimbursement.
Due to the campus being shutdown during the second half of the spring semester and uncertainties from the pandemic, planning for the FY2021 budget was delayed. The University is expected to receive 2.5 percent less in appropriations from the state than they received last year. Since 2016, the decline in state appropriations to the University is 10.6 percent.
Final enrollment figures for the 2020-21 school year will determine the size of the budget cut for FY21, but Boyce announced they are asking Vice Chancellors to prepare plans for a 4.95 percent cut in permanent funds, which are based on expense and revenue predictions. The Vice Chancellors were also warned that the cut could grow to as large as 7.5 percent if enrollment declines again at predicted rates.
“Due to the unpredictable nature of the pandemic, we will not know the size of the cut until the first day of classes on Monday, August 24,” Boyce stated. “Traditional enrollment forecasting methods are not as reliable in the midst of the pandemic, so we must confirm our actual enrollment once classes begin before we make appropriate adjustments to our core operating budgets.”
The University’s enrollment was down for a third straight year with a reported 22,273 students enrolled at an Ole Miss campus throughout Mississippi for the 2019-20 academic year. The number was a 3.5 percent decrease, or 815 students, from the year prior.
“We know this is difficult news,” Boyce continued. “It must be noted that we don’t know the full depth and duration of the pandemic’s impact on our finances, so it is vital that all of us make very prudent use of any FY2021 budget authority.”
Boyce concluded by stating the University would provide a more detailed update regarding the budget cuts shortly after the start of the upcoming fall semester next month.