University Leadership Assembly Dr. Denise Trauth, President April 9, 2020
Implications of COVID-19 Crisis for FY 2021 FY 2021 runs from September 1, 2020, through August 31, 2021 Two main sources of revenue that could be impacted due to COVID-19 are Appropriations and Enrollment. These estimates only include the Primary Fund Group, not auxiliaries or fee-funded activities. v Best Case - $13.1 million in recurring revenue loss – Appropriations do not decline – Enrollment declines 5% v Worst Case - $36.6 million in recurring revenue loss – Appropriation decline of 10% – Enrollment declines 10% 2
What Steps Has Texas State Taken? v Cancelled Non-Essential Travel – Expected Savings - $1.3 million in one-time funds v Hiring Freeze – Expected Savings - $1.4 million in one-time funds v Budget “Savings Accounts” – Deferred Spending - $8.9 million in one-time funds v Delay Facilities Projects – Deferred Costs - $150 million in one-time funds 3
What Are Other Universities Talking About Doing? v Deferment of Projects/Initiatives v Budget Reductions v Hiring Freezes v Permanent Salary Reductions v Furloughs/Layoffs v Fundraising Efforts 4
What is the CARES Act? v A nationwide stimulus package, the CARES Act provides approximately $14 billion for higher education funding. v Texas State is anticipated to receive $31.8 million. v 50% of the funding received must be given directly to students. 5
Future Impacts v We expect the financial impacts to last at least five years. v State of Texas Revenue Streams – Oil and gas tax revenue funds a significant portion of the State of Texas budget v 2020 is a Base Year for Formula Funding – Our enrollment this year sets our formula funding for the following two years regardless of our enrollment changes v Multi-year Impacts – Enrollment declines travel through the enrollment pipeline and can take up to four years to correct 6
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