Budget Update from Interim Chancellor Scott Menke

Dear Campus Community:

I would like to provide you with a financial update regarding UW-Parkside’s budget realignment. I know that this has been a difficult start to the academic year and wish it could have been otherwise.

Background

Some of you noted that decisions on our budget situation could have been communicated in a timelier manner. Here is a quick summary of what transpired:

• A detailed overview of our financial situation shared with campus near the end of the Spring ’23 semester was largely accurate and signaled that further actions would be necessary.
• There was some expectation the state budget approved this summer would turn out more favorably than it has, but in late August an additional $32 million cut connected with DEI programming for the University System was approved by the State Legislature.
• In hindsight, we could have acted sooner despite multiple factors playing a role in our efforts to address the budget situation, including UW System’s timeline for making decisions due to the release of information on system-wide structural budget deficits at the special Board of Regent meeting August 22.

Prior to our current budget situation, UW-Parkside was in sound financial condition; however, a perfect storm of factors converged, namely:

• COVID-induced enrollment declines that disproportionately affected the populations we serve;
• declining higher education participation rates in Wisconsin and particularly in Southeastern Wisconsin;
• declining state support placing the UW System and our campuses as the 8th most poorly funded publicly-funded university system in the country;
• increasing reliance on tuition revenue, exacerbated by a decade-long tuition freeze, which caused us to consume our financial reserves; and
• sharply increased costs in the post-pandemic, inflationary world.

Due to all these factors, we face a structural deficit and estimate we need to reduce current-year spending by $5 million. To date, we have reduced the deficit by approximately $4.4 million with the implementation of furloughs, reducing PR balances, reducing open positions, and additional reduced spending of supplies and expenses. The remaining approximately $600,000 will come from our Reserve Funds.

A Path Forward

The above steps are necessary short-term adjustments to obtain immediate savings in the current fiscal year. However, even with significant increases in new student enrollments and the small increase in overall fall enrollments, we anticipate our tuition collections may only be marginally greater next year.

We must therefore refocus on a path forward that will put us in a sustainable financial position by Fiscal Year 2028, by which time and according to the UW Strategic Plan, all campuses must eliminate their structural deficits. This path includes: 

• Short- and long-term fiscal recovery plans.  With support from the UW System, engagements with two consultants to assist us in these efforts; Huron Consulting Group and Deloitte Education Consulting.
• Later this month, Huron will work with us on developing a short-term fiscal recovery plan. They’ll be with us for two to four weeks and will meet with governance leaders, faculty, staff, students, deans, and administrators in workshop formats to help us develop plans based on our mission, goals, and fiscal realities.
• Deloitte’s engagement with all UW campuses is underway and will begin in late November for UW-Parkside and will focus on evaluating our longer-term financial health and viability, processes, and data to support decision-making, and opportunities to improve our performance.  Deloitte will convene a local leadership team on campus, as well as conduct interviews and focus groups including students and a variety of stakeholders from all employment types. This project will take seven weeks and we will receive their recommendations in early 2024.
• Better Communication. To keep our campus community better informed, I will continue to provide updates as we move through the process, and we will create a website with all relevant planning and process information, as well as a schedule of meetings and campus briefings.
• Employee Support. I know these are stressful times for our campus community. As a reminder, the Employee Assistance Program, Kepro, is available to support employees, including those who may need financial advice. They can be reached at 833-539-7285 or via their website: Kepro (passcode: SOWI).

Thank you for your commitment to the University of Wisconsin-Parkside, especially during this challenging time. I believe these steps need to be taken to help support staff and create a better financial outlook, as well as ensure we preserve our mission of academic excellence and student success for the future.

Scott Menke
UW-Parkside Interim Chancellor