University at Albany officials are looking for ways to cut nearly $40 million out of the college’s budget in an effort to close a long-term deficit exacerbated by the pandemic.
College officials have already closed about half of their deficit through hiring freezes, closing vacant positions and cutting discretionary spending, but they also enlisted every department at the college to develop plans to reduce department budgets by 15 percent. That will include the academic affairs department and could include cuts to staff and academic programs.
No final decisions have been made about what further budget cuts may be necessary, and college officials said they expected more clarity by April or May, after state lawmakers have finalized the state budget.
“The first half was the easy half, the second half gets a little harder,” said Todd Foreman, UAlbany vice president for finance and administration.
The college’s budget shortfall is partly the result of impacts from the pandemic but is largely a function of longer term – so-called “structural” – issues like contractual salary increases, the scrapping of a proposed tuition increase and growing costs in providing student financial aid.
The pandemic resulted in a loss of nearly $30 million in housing revenue and about $8.7 million in tuition revenue compared to what college officials projected prior to the pandemic. Distancing requirements and other health precautions limited how many students could live in dorms, and while the college’s enrollment was essentially flat in the fall, fewer out-of-state and international students, who pay higher tuition rates, registered for classes. Foreman said the college has spent another estimated $3 million directly on COVID-19 testing, protective equipment and other direct pandemic-related expenses.
Federal stimulus aid has already flowed to help cover the losses at UAlbany and other colleges around the state, and federal lawmakers stand poised to approve another round of funding, some of which would eventually make its way to UAlbany. The college has already received about $8 million for student aid and $8 million for institutional expenses in the first round of stimulus; the college expects another $24 million from the second round of already-approved stimulus, $8 million of which will go directly to student aid. The latest stimulus, which is on the verge of enactment, could result in even more aid for UAlbany. But ultimately college officials do not see the federal aid as the solution to the underlying problems that predated the pandemic.
Foreman said the federal aid, which would primarily be used to cover the costs of one-time pandemic costs, would give the college more flexibility in managing its broader budget challenges and make investments that could eventually grow revenue in the future.
“We welcome any more money we can get from the federal government to deal with our losses,” Foreman said. “It buys us a little more runway to deal with structural problems we have and maybe invest in some things that generate more revenue and help us close the gap.”
UAlbany’s overall annual budget totals about $568 million, with an operational budget of around $350 million. The college’s fiscal outlook will continue to take more definite shape in the coming months as the state and federal governments finalize the specifics of how much aid they will provide the college and over what timeframes.
UAlbany Provost Carol Kim has been working for the past three months on a series of metrics that will be used to determine what, if any, academic programs will be cut or altered in the upcoming budget. Foreman said it was too early to say whether program or staff cuts would be necessary but suggested more would be known by April or May.
If college officials find the $39 million total in savings and lawmakers approve a budget that includes at least the levels of aid proposed by Gov. Andrew Cuomo, Foreman said UAlbany would close its deficit by the end of the 2021-2022 academic year.
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