Despite the challenges posed by the COVID-19 pandemic, Plattsburgh State plans to continue to support students by carefully budgeting, planning for worst-case scenarios and offering refunds for unused services.
COVID-19 Financial Effects
The New York State budget that passed April 2 gives PSU approximately $150,000 in one-time funding to partially offset the retro salary increase of the University Police union along with critical maintenance funding of $3.799 million. Funding in regard to the State and the Educational Opportunity Program has been left untouched. The fiscal year 2020-21 budget included a significant expansion of authority to the state budget director, which allows for potential reductions to state spending for the entirety of the fiscal year given the projected $10 to $15 million deficit and pandemic at hand.
Vice President for Administration and Finance Josee Larochelle said the college, along with the 64 other SUNY campuses, will partake in only critical spending. Expenses toward health and safety services, spring or summer course delivery and student enrollment recruitment fall within this category.
SUNY instructed all campuses to undergo short and long term spending constraints at the beginning of April. PSU is pausing all recruitments and hiring until May 30, a constraint that will be evaluated by NYS throughout the fiscal year, enforcing the critical-purchases-only rule until June 30 and implementing a new hiring and salary program.
Coronavirus Aid, Relief and Economic Security Act
The NYS CARES act was signed into law March 27 and provides additional financial relief to those affected by COVID-19. PSU has submitted an application for the CARES act and estimates receiving approximately $5.2 million.
However, when it’ll receive that aid is not known. In addition, there will be no certain timeline when the other half of the aid will be awarded. Larochelle said at least 50% of the aid must be used toward student emergency grants pertaining to food, housing, course materials, technology, healthcare and child care. PSU is currently awaiting guidance from SUNY.
Student Refunds
The pandemic left many students in a state of uncertainty when New York Gov. Andrew Cuomo decided to shut campuses down. With the number of COVID-19 cases in New York State rapidly increasing over the course of the college’s spring break, PSU was unable to provide students with housing, food, parking, recreation, athletic and Student Association services, so the college will be refunding unused services to students. The refunds will cost PSU about $7.69 million, which creates a deeper budget deficit for the college.
Budget Update
Given the spending constraints surrounding COVID-19, PSU anticipates contractual expenses to be $200,000 under budget. Travel will be $280,000 under budget, and utilities will be approximately $100,000 under budget. Additionally, the institutional gift aid program and TAP gap is estimated to be approximately $1.1 million under budget. Larochelle said PSU had anticipated a $6.5 million end-year operating deficit when creating the 2019-20 fiscal year budget but has now projected an improved number of $1.7 million given the reduction in the revenue offset by the reduction of expenses.
“This is an improvement of over $4.7 million from when we started this fiscal year,” Larochelle said in the Zoom budget meeting. “When we developed our 2019-20 budget, we had projected a $3.2 million operating reserve. Following year-end close for the fiscal year 2018-19, the amount of reserves grew to $8.4 million. Our campus accomplished significant financial gain throughout fiscal year 2018-19.”
She said PSU collected $2.3 million more in tuition revenue than projected because of higher enrollment in fiscal year 2018-19 and the collection of Excelsior and TAP grant funding of the prior years. In addition to meeting its 2018-19 permanent expenditure target reduction, PSU had $1.5 million in unspent balance in the state fund. The college also received $1.6 million from NYS as reimbursement for the UUP retroactive salary payments.
“These factors contributed to beginning fiscal year 2019-20 with an $8.4 million balance in our unrestricted cash-operating reserves, which was over $5 million,” Larochelle said. “As we accomplished savings about our planned, short-term strategies to balance the budget, we are now anticipating utilizing approximately $1 million of our operating cash reserves at the end of [2019-20] fiscal year to balance the budget instead of originally $3.2 million as planned.”
Larochelle said PSU should continue to look forward and beyond despite the uncertainty of COVID-19. She said the college utilized a new budget software that took a more hands-on approach in developing the departmental budget. The results were presented to President Alexander Enyedi’s cabinet April 14.
The net reduction in PSU’s operating budget is approximately $1.6 million given last year’s budget expenditures compared to the present. Larochelle said academic affairs achieved more than $870,000 in permanent reductions in part of the 2017-18 budget reduction plan. Administration and finance was permanently reduced by more than $200,000 primarily because changes in the methodology surrounded recharges. Enrollment and student success was permanently reduced more than $100,000 related to recreation categorixed as a mandatory fee. The campus category includes a reduction of more than $380,000 in institutional aid along with a $1.8 million reduction in the college’s salary provisional account related to the UUP retroactive payments, which is built into each employee’s base salary.
Enrollment
PSU’s original December enrollment, which kicked off the budget process, according to Larochelle, was 4,933 students. The enrollment projections, however, do not include possible effects of COVID-19. The projections were updated in April after the spring 2020 head-count data. The 2020-21 fiscal year fall head count of 4,904 students including 1,614 new students and 3,290 continuing students, which is a 6.6% decline. The decrease has an impact of more than $2.6 million fewer in revenue
Scenarios
PSU has created two budget scenarios called base and low. The base scenario assumes COVID-19 will have little effect in enrollment and includes a 10% reduction in state support. The low scenario assumes the worst outcome at the time of COVID-19 with significant effects on enrollment.
These scenarios are only hypothetical situations that PSU is currently planning for. The low scenario estimates that 50% of incoming students will not attend PSU in the fall and 25% of current students will not return. The occurrence of the base scenario would leave PSU with 4,904 enrolled students with a final operating deficit of $373.18. The low scenario would leave the college with a total enrollment of 3,503 students with a much larger $14,071.66 final operating deficit.
“Both of these scenarios result in the college not having enough in the cash reserves to balance the 2020-21 budget,” Larochelle said.
Larochelle told faculty that PSU can’t invent the future, but it can shape it. The college will continue to support students and plan for the fall semester.
“I truly hope the low scenario doesn’t come into play,” she said. “If it does, it won’t just be for Plattsburgh. It will be a SUNY-wide and state-wide issue.”
Email Mataeo Smith at cp@cardinalpointsonline.com
