WWU trustees approve operating and capital budgets

Western Today staff

June 10, 2011

The Western Washington University Board of Trustees today approved the university’s 2011-12 operating budget, tuition rates for 2011-13, and the university’s 2011-13 capital budget.

The 2012-13 operating budget will be reviewed during the course of the coming year and offered to the trustees for their approval next June.

Operating budget

The biennial operating budget plan, under development since last fall, responds to a continued sharp drop in state funding. Western’s operating expenditures have been historically supported by a combination of state appropriations and tuition. In 2008-09, state appropriations represented 60 percent of Western’s operating budget with tuition paying about 40 percent. However, following several years of severe state budget reductions, state appropriations will represent only 31 percent by 2012-13.

“In response to substantial state funding cuts, the campus community has worked collaboratively to make strategic choices to preserve investment in outstanding academic quality, which is a hallmark of Western,” said board Chair Dennis Madsen.

During the next biennium, Western will be implementing budget priorities, based on a bottom-up budget process on campus over the past year, that will best ensure continued strong academic programs that meet the needs of the state.

“We are committed to meeting the highest priority needs on campus to protect Western’s excellence and our students’ access to it. Budget decisions made by our campus and trustees ensure that Western goes forward in the strongest possible ways,” said WWU President Bruce Shepard.

A few operating budget highlights:

  • The trustees approved the 2011-12 budget, based on the conference budget passed during the recent special session of the Legislature. Western’s 2011-12 operating budget totals $127.9 million, including $40.3 million in state appropriations and $77.8 million in tuition. The state funding cut to Western totals $38.5 million for the biennium. When partially offset by tuition increases totaling $31.4 million, the net reduction is $7.1 million.
  • Due to significant and unprecedented reductions in state support, the Legislature provided Western, along with the University of Washington and Washington State University, with guidelines for 16 percent resident undergraduate tuition increases in 2011-13. Under the provisions of the state Higher Education Opportunity Act, Western’s trustees may exceed the 16 percent per year tuition guideline for resident undergraduate students. However, increases above 16 percent would require that additional financial aid mandates are followed by Western.
  • The trustees approved increases in resident undergraduate tuition by $857 in 2011-12 and $994 in 2012-13, an increase of 16 percent per year. Even with the increases, Western’s resident undergraduate tuition will remain significantly below the national average. Eighty nine percent of Western students are resident, or in-state, undergraduate students. Four percent of all tuition revenue will be set aside for WWU student financial aid. Washington’s State Need Grant – a major source of financial aid for many Western students – remains among the best in the nation.
  • Western’s trustees have the authority to set rates for other student categories. Tuition increases of $857 a year in 2011-12 and $994 a year in 2012-13 were approved for each of the following student categories: non-resident undergraduate students; resident graduate students, and non-resident graduate students.
  • Under new authority granted to the trustees by the Legislature to set differential tuition rates for academic programs, tuition rate increases were approved for both resident and non-resident MBA students both years. Analysis shows that Western’s MBA program is underpriced.
  • As part of the university’s rebasing budget process and in order to ensure continued high quality academic and student access, $7.3 million was reallocated to increase institutional need-based financial aid, substantially backfill cuts to state work study, resume hiring tenure-track faculty after a three-year hiatus, address course bottlenecks impacting time to degree and increase course availability for higher- and growing-demand areas.
  • As part of Western’s bottom-up budget process to ensure a sustainable academic foundation of high quality – cuts are strategic and not across-the-board. Due to state funding cuts, university division budgets will be reduced by $3.3 million, following careful consideration by the campus of the impacts of reductions and the net effect of both reductions and recommended additional funding to support high priority needs.
  • The operating budget is based on maintaining current student enrollment for the next two years.
  • The budget includes a $5 million cut for the biennium that is equivalent to a state-mandated 3 percent salary reduction for all university employees. To date, specifics of how this one-time reduction at Western will be implemented remain under consideration. Until the legislative intent is better understood, university fund balances will cover this reduction.

For more information about the operating budget, see Proposed 2011-13 Operating Budget.

Capital Budget

The trustees also approved the $28.3 million capital budget for the 2011-13 biennium, which includes $6.8 million for design of the Carver Academic Renovation project and $4.5 million for a comprehensive interior/exterior renovation of Fraser Hall, including the addition of an exterior elevator to improve lecture hall accessibility. Also funded in the capital budget are: $8.3 million for minor works preservation projects; $4.8 million for classroom and lab upgrades throughout campus and $350,000 to implement a predesign study for a proposed new facility to address critical academic and academic support functions.

Western has both an operating budget – which keeps the university going on a day-to-day basis, paying salaries, utilities, supplies, etc. – and a capital budget, which is used for building projects such as renovation or new construction of campus buildings. The money for these comes from two different funding sources: operating money comes from state operating appropriations and tuition; the capital budget is primarily financed by long term state-issued bonds, a financing mechanism similar to a home mortgage. The state does not allow capital appropriations to be used for operating expenses.