By Jillian Poland
Interim Asst. News Editor
The University is still in a “pretty strong” financial position despite a projected budget deficit for the coming years, said Dale Hamel, executive vice president, at the All University meeting on Nov. 2.
The University projects a $400,000 deficit for the 2017 fiscal year and a $200,000 deficit for the 2018 fiscal year, according to Hamel. FSU is projected to break even for the 2019 and 2020 fiscal years, meaning the annual income will match the University’s expenses.
The deficit is the result of a decrease in student enrollment and state appropriations, said Hamel.
Lorretta Holloway, vice president for enrollment and student development, said student enrollment in colleges is down across Massachusetts and nearby states. There has been a 9-to-16 percent decline in Massachusetts public high school graduates and a 15 percent decline in private high school graduates. The number of high school graduates is expected to continue declining in the coming years.
This decline ultimately shrinks the pool of students entering college each year.
Holloway said, “When you think about the lowering in enrollment … it’s basically $10,000 out of the budget for every student that we don’t have. That’s $10,000 for each student that we could be working on Crocker, that we could be hiring more SI students, that we could be developing different programs.”
A shortfall of 70 new resident students has created a deficit in the Residence Hall Trust Fund, ranging between $530,000 and $670,000, according to Holloway. FSU would need approximately 40 to 45 additional new resident students next year to offset this impact.
The University is looking for solutions to compensate for the impact of declining enrollment. FSU administrators are looking into the feasibility of using on-campus housing for conferences or for year-round housing. Another tactic includes expanding international enrollment, said Holloway.
“We have been in talks with various constituencies about doing recruitment, particularly in China. … Additionally, we are going to have a presence at the Bermuda College Fair,” said Holloway.
The University is also working to create more targeted recruiting plans with more user-friendly student resources, Holloway said.
For now, the financial deficit will be covered by reserve funds, according to Hamel.
“Institutions – as well as families – build reserves to be utilized for various purposes, including to address short-term shortfalls. So, while we are projecting a deficit for this fiscal year, we are prepared to address it,” Hamel said in an email.
Despite the deficit, “the underlying financial condition of the University is very sound,” according to Hamel.
“There are periods where the University is under more fiscal constraint than at other times. We are currently in one of those periods. … As a result, we have instituted expenditure reductions and have scheduled use of a small portion of reserves for this fiscal year,” Hamel said.
FSU used a similar tactic in 2008 and 2009 to deal with the financial fall out of the recession, according to Hamel.
As a result of the current financial situation, the University has pushed back the planned start dates for projects at the Mayhew Facility, Athletic Field, Crocker Hall and the library, said Hamel.