While the University of Wyoming Board of Trustees approved the fiscal year 2017 budget, administrators still have a long way before nailing down the particulars — all while FY 2018 looms overhead.
Reductions in FY 2017’s budget have been thoroughly explained, such as eliminating 70 vacant positions, creating a standardized teaching load to reduce adjunct faculty costs and creating retirement incentives. Reduction plans for the FY 2018 budget are still broad, although two large areas are being reviewed, Nichols said.
“Universities do put most of their money into personnel,” she said.
“I think the two overarching strategies are program reviews — and that’s academic and non-academic — with the goal of eliminating less-productive programs. That’s a big strategy. That’s why I declared the financial crisis, so we could move into this planning very aggressively.
“Then, organizational and structural changes. So, just looking at the organization with the goal of reducing administrative overhead,” she continued. “Those are the two largest driving forces for lowering the FY 2018 budget.”
The program reviews, some set for completion by the end of summer, will show areas where consolidation and possible elimination are available, mostly aimed at reducing personnel costs, through the FY 2018 budget, which normally make up more than 70 percent of the UW’s expenditures, Nichols explained.
“We will have eliminated $41 million from our Section 1, state budget,” she said. “We’ll have less staffing — our personnel will be down. I can’t tell you a definite amount, but given the fact we’ve eliminated 70 (vacant positions) and we’re not there at all yet. I would imagine we’re in the 150-200 positions, including the 70.
“We start with that and keep building, because we’re not done,” Nichols continued. “We’ve got $10 million to go (in FY 2018). And I’ve done the low-hanging fruit — I grabbed that right away. Faculty work load, that’s low-hanging fruit because I don’t have to eliminate people, I just try to become more efficient. So anywhere we can drive efficiencies, we will, because you don’t have to eliminate people. But I won’t be able to use that strategy forever.”
Nichols is in a very difficult position, stepping up to a presidential position only days after learning a $35 million budget reduction is needed. Nichols accepted the president’s job in December and was not aware of the looming budget reductions’ severity.
“When I applied for the job, no one was talking about (the cuts),” she said. “Remember, the Penny Plan was enacted in February. I accepted the job in December. So, the budget cut was not on the horizon.”
The Penny Plan, requiring about $3 million in cuts for FY 2017, was fairly simple to handle, Nichols explained, and a strategy to find the funds was created. However, the large $35 million dictated by Gov. Matt Mead was presented less than a week from Nichols’ first day May 16.
“Was it surprising? Of course it was,” she said. “But is it manageable? Well, it’s big. We’re cutting a huge part of the budget right now. It’s a huge budget cut, almost 10 percent of our state budget. Is it going to be painful? Yes, it is. Can we manage through it? I’m sure we can, but it’s not going to be without some real hurt as we move forward. People are going to really feel this budget cut in a way they might not have in the past.”
Nichols’ made creating a realistic budget her number one priority.
“I started on Monday, I was briefed on it and had meetings, but on Monday night, I stayed in my office until midnight and I started pounding out the budget cut for the University of Wyoming on my first day,” she said.
The most difficult part of figuring out this budget was her lack of knowledge of specifics — where exactly money was allocated to different units and how much money was actually used in previous years.
“I’ve done budget cuts before,” Nichols said. “It’s not like I haven’t done it. But I also know the kinds of information I had access to in order to do a good job with it. Of course, I did budget cuts at those places after I’d been there for a long time, so I just inherently knew this stuff. The hard part here was I just didn’t know it. I relied on my experience a lot. What I’m throwing out is not stuff I hadn’t done before. It’s very much based on my experience.”
Program reviews are one of these strategies which will narrow the focus of UW, Nichols explained, which can end up being positive in the long run.
“Whether you do it by accident or purposely, you do become more strategic in that you are focusing more on the programs you want to hold on to and you want them to be really high quality,” she said.
Reductions aren’t the only way of finding money, Nichols emphasized. New revenue streams will be identified in the coming months, with some initial ideas placed on fully utilizing endowments and gifts from the UW Foundation, developing a new, streamlined plan for program fees and possible differentiated tuitions for high-cost programs and increased out-of-state enrollment.
However, while UW and the state face tough economic times, many other universities have been through similar situations, Nichols said.
“Universities survive budget cuts,” she said. “You can look around the country and see literally hundreds that have been through this, and they still exist today, and they’re pretty strong universities. We do have a year of really hard work, and we’ve got to get through it. Then, once we’re through it, I hope we can put it behind us and really move forward in a very aggressive way to chart the future of the university, and I think it’s going to be a very positive one.”