UW Oshkosh is at a crossroads, and the institution needs to transform. By acting now to stabilize and reshape our university, we will build ourselves new opportunities in the future.
For over 150 years, UWO has been a bedrock of our community and region as a place of teaching, learning, research and service. UWO’s history is distinguished, a story of triumphs and setbacks. From the 1916 fire that destroyed the normal school building to the depopulation of the campus during World War II to the surge in growth among baby boomers to the COVID-19 pandemic, this institution has marched on with a commitment to the student and student learning.
Our student outcomes continue to define our success. Graduates of our university are succeeding and improving their lives and the lives of those around them. We are helping meet workforce needs in our community and our region, and what we do in developing talent is more important than ever. Yet, we are facing a perfect storm that requires us to focus on our present fiduciary responsibilities, namely:
- Declining higher education participation rates in Wisconsin and an aging demographic in the state have trimmed enrollment.
- Declining state support, which has made us more reliant on tuition revenue, forcing greater dependance on enrollment.
- The increased reliance on tuition revenue, further exacerbated by a decade-long tuition freeze, which caused us to consume precious reserves.
- And, while enduring all of these impacts, rising costs in the post-pandemic, inflationary world.
These factors leave UWO in a challenging financial position that must be reversed. We project a structural deficit of up to $18 million in the current fiscal year. That challenge is unprecedented for the institution.
For years, we have adjusted and made investments to address the enrollment trends. Regrettably, they have not reversed the course of declines, even though preliminary indications portend some potential for stabilization in fall 2023.
Additionally, our UWO fund balances that can be applied to address our deficits are about to be depleted. UWO is expected to finish the coming fiscal year in the red even after we apply our remaining available reserves. It is no longer sustainable for us to operate without dramatic reduction in expenses.
The steps I am announcing and outlining today seek to preserve UWO’s academic excellence. We will continue to be that place of teaching, learning, research and service our community, our region and the state needs; but we must operate differently than we have in the past. Our approach will face this new reality head on, reorganizing and reducing our payroll and operational expenses, and shielding our classrooms and student experiences to the fullest extent possible.
We are taking three steps now to deal with our financial realities:
To start to alleviate our costs, intermittent furloughs will commence with September 2023 pay periods and will be planned to remain in effect through the June 2024 pay periods.
The number of furlough days required for each employee will be tied to their salary level; higher earners would be subject to more furlough time, as an example. Any employee who enrolled in our Voluntary Retirement Incentive Options Program (VRIOP) will be exempt from furloughs until their retirement, no later than January 2024.
Unfortunately, furloughs alone will not cover the deficit this year. Yet they will help close the gap by providing immediate financial relief. More specific details on this element of our plan will come from human resources over the next few weeks.
We also need to examine our UWO workforce levels. Hard decisions are ahead. Layoffs and nonrenewals are unavoidable, with notifications coming later this fall semester.
We require more analysis, with a continued focus on the balance between the changing size of our student body on campuses and our employee numbers. Scrutinization of UWO and peer institutions’ data will continue into the next several weeks to inform the decisions ahead.
Early analysis indicates UWO’s faculty ranks are in alignment with current student enrollments. While that lessens the need for faculty workforce reductions, we do still plan on the average teaching load of faculty members increasing. We will also need to suspend curriculum modifications to guarantee sufficient classes for students. Faculty acceptance of the VRIOP will be a big part of our initial efforts to reduce payroll.
Additional budget reductions, restructuring opportunities
An additional GPR budget reduction in FY2024 is likely, while redirecting cost recovery balances to meet our fiscal year 2024 tuition target. We will review and possibly discontinue any self-supporting programs that do not recover costs. And we will review all centrally-funded commitments for FY2024 which may lead to hibernating some programs for a time.
Restructuring offers further promise. It is imperative that we look into university divisions, units and departments. Over the last several years, faculty and staff helped us examine academic offerings, study the restructuring of our largest college, the College of Letters and Science, and review the efficacy of the University Studies Program. Some efforts led to modest changes. Yet, our enrollment and financial challenges remain. So, with data in hand, it’s time to act aggressively. UWO’s future depends on it. Provost Martini will lead these efforts. Everyone’s participation in planning will be helpful during this time.
In closing, the quicker and more collaboratively we move will better position us to soften the impacts of these changes. We know this requires constant engagement and communication with stakeholders.
In the weeks and months to come, we will continue working with shared governance leaders, faculty and staff members, students, deans and administrators to outline new developments and implement our plan. I will prioritize that you all have good and timely information.
We will use the August 31 Convocation to provide more detailed updates from Provost Martini and myself. This academic year’s Chancellor’s Town Halls will provide additional forums for engagement. Meanwhile, we are developing a web resource for the latest updates and helpful background.
We know these are unprecedented changes. We wish we did not have to make these decisions. It will be extremely difficult, both personally and professionally.
However, our charge to learners, their families and the broader community is of utmost importance. This way forward requires diligent work, difficult decisions and, despite the hardships ahead, selfless stewardship. I believe those we serve will see our actions as evidence of a commitment to a viable and durable UWO for decades to come.
This information was shared Aug. 3 with our UW Oshkosh community.