We are learning more about the range and magnitude of the budget challenges we will face in the next fiscal year, President LeBlanc writes.
To the George Washington University Community:
With the last few days of the academic year upon us, I have been reflecting on the strong showing of care, resilience, and perseverance each of you has demonstrated during this incredibly difficult situation. Through it all, I have been grateful for everything you have done to support one another and to ensure GW fulfills our core mission, even in these unprecedented times.
Our ongoing response to COVID-19 has focused foremost on the safety and care of our community. Transitioning to virtual education for the spring and summer semesters, directing additional resources to our health and safety efforts, packing and storing students’ belongings, providing prorated account credits for room costs, and not offering summer housing or programs—these were all necessary steps, and they were absolutely the right decisions based on our priorities of safety and care.
But these and other decisions come with increased costs and decreased revenues estimated in the tens of millions of dollars. We have been working hard to manage this unexpected and significant financial impact. When I wrote to you in April, I explained the strain on the university’s budget to date, and I outlined some of the actions we were taking to help us mitigate the impact. I also noted the uncertainty of the future, with the biggest questions around the spread of the virus and how it would affect fall operations and, in particular, enrollment and revenue.
While we are still working on our fall planning, we are learning more about the range and magnitude of the budget challenges we will face in the next fiscal year. Unfortunately, under any fall operating scenario we will experience a significant gap between expected revenue and expenses. For example, even under a best-case scenario where we have returned to relatively “normal” on-campus operations in the fall, we still expect this gap to be on the order of $100 million. Other scenarios project figures much higher. Although this is difficult news to hear, it is important that I be transparent with you. We all must come to grips with the severity of our situation in order to ensure the long-term financial sustainability of our university.
We will need to make tough choices and face difficult decisions. During the coming weeks, Provost Blake will be working with the Deans on school-based cost-saving plans, and I will be working with the Vice Presidents on administrative unit plans and engaging in appropriate consultations with faculty and others in our community. We are approaching this planning with a holistic review of the budget. The reality is, because a significant share of our budget is compensation, we will need to make personnel decisions that affect all of us. That could include a range of actions, such as pay or benefit reductions, early retirement options, furloughs, or layoffs; reorganizations; and reductions in purchased services, travel, and training, among others.
We will continue to listen to our staff and students, consult with faculty on matters of shared governance, and communicate with you regularly about any new budget decisions. I want your ideas, and if you have suggestions for cost reductions and/or ways to increase revenues, I encourage you to email [email protected]. We will consider all ideas.
I know this is not the update you wanted, and it is certainly not an update I ever wanted to send to the GW community. But as we move forward, I assure you that our guiding principles will remain the same: We will look comprehensively at our options, and we will make decisions always through the lenses of safety, care, and our university values. As I noted last month, our world needs GW’s core mission of teaching and research, perhaps now more than ever, and I thank you for helping us ensure our university’s success far into the future.
Thomas J. LeBlanc