State of Ohio announces State Share of Instruction cuts for FY21

The following message was shared with faculty and staff on July 9, 2020.

Dear Colleagues,

Earlier this week, Ohio Department of Higher Education Chancellor Randy Gardner shared the encouraging news that the state plans to fund the State Share of Instruction (SSI) line item for FY21 at $1,950,089,467. While this reflects a reduction of 4.38 percent, the news is a significant improvement from earlier guidance requesting that universities plan for 20% state cuts in FY21. 

We are sharing this information in the interest of transparency but also with great caution as Chancellor Gardner was clear that the state could still make additional FY21 SSI funding reductions if revenues do not meet current forecasts. Based on the latest assumption of a 4.38 percent reduction, we can plan for a reduction in state support of between $8 and $9 million.

We know you likely have questions about what this means for Ohio University. Here is what we can share at this time:

1. The smaller cut in state aid will reduce but not eliminate our reliance on reserves in FY21. SSI is only one of many categories of expected lost revenue as a result of the pandemic, and we continue to anticipate temporary revenue reductions in areas such as housing and dining as well as significant one-time costs associated with the implementation of our Fall Planning recommendations. Also, this reduction is in addition to the $6.65 million FY20 SSI cut as well as the $18 million in unexpected housing and dining refunds this spring.
   
   Nonetheless, this less-than-expected reduction in SSI impact will allow us to come closer to covering short-term FY21 losses through our University-wide furlough plan. We are working to re-evaluate planned reserve use based on this new information and will post updates as they are available on our budget website.
2. While this is encouraging news, it does not alleviate our longer-term budget challenges. After being one of the most rapidly growing institutions in the United States leading up to 2016, we have seen a significant increase in our 3-year and 4-year graduation rates and a decline in the size of our incoming freshman class, leading to a decrease in University-wide enrollment from 36,867 in Fall of 2016 to 33,044 in Fall of 2019. This enrollment change resulted in a decrease in annual tuition and fee revenue of approximately $30 million prior to COVID-related impacts.
   
   Although we were on track to achieve enrollment targets prior to the start of the pandemic, we are now anticipating a decline in the incoming Fall 2020 freshman class, which will have further negative financial impacts for the next four years. Given the economic pressures on students and families, we are proud to be the only public university in the state to have made a commitment to support student affordability by not increasing tuition in FY21, which will also impact revenues.

As we continue to navigate challenges that are amplified by the pandemic, we appreciate the leadership of Gov. Mike DeWine, Chancellor Gardner, and legislative leaders in these unprecedented times.  We look forward to partnering with them as we prepare for the fall semester.

Sincerely,

M. Duane Nellis
President

Elizabeth Sayrs
Executive Vice President and Provost

Deborah J. Shaffer
Senior Vice President for Finance and Administration