Dear University Community,
The content of this message is not what I had hoped nor expected to be among my first communications with the EIU community. It has personally been difficult to write. However, the severity of the financial situation and its effect on our institution’s well-being requires urgent attention.
Just one month ago, I began serving our university as its 12th president. It has been a whirlwind month of greeting and meeting with university staff, faculty and administrators; state legislators and city government officials; alums, donors and friends of the university; and our Board of Trustees. In every case I have been immensely gratified by the friendly welcome I have received. The passion for Eastern that I witnessed during the presidential search, and which was instrumental in my decision to join the Eastern community, is evident in every conversation I’ve had.
Eastern has an enviable history. Since 1895, the university has worked diligently to achieve its mission of providing an academically excellent learning environment in which students succeed. We are a catalyst for economic and workforce development, a major contributing agent in developing ethical citizenry for the state, and we serve as a magnet for intellectual, cultural and athletic events for the region. I will aggressively promote that message at every opportunity.
Over the past several years, EIU has experienced increasing budgetary challenges. These challenges are primarily the result of a substantial decline in revenue due to decreasing enrollments. Unfortunately, this has been exacerbated by concurrent and significant declines in appropriated funding for higher education from the state. Total enrollments at EIU have declined 27.8 percent from 12,349 in FY2007 to 8,913 in FY2015. Declines in state appropriated funding over the same period have been reduced by 11 percent or $5.3 million.
The university has worked diligently and collaboratively to deal with the loss in annual revenue by working to reverse the declining enrollments of our freshman class, transfer student population and graduate programs. Additional initiatives have been implemented to reduce personnel costs through attrition. Operating budgets have been tightened across the university to reduce expenses. Although all of these efforts have helped the university’s financial position, they have not been nearly sufficient for us to match annual expenses with our revenues, leaving a deficit at the end of the fiscal year for the past several years. To balance these deficit budgets, the university used supplemental funding from reserve accounts. This is a financial strategy that is not sustainable. In fact, we have now expended virtually all remaining reserve funds to balance the fiscal year that just ended (FY15). This means there are minimal supplemental funds to draw upon to be used for FY16.
Preparing the FY16 budget and subsequent planning has been further complicated as we have yet to be informed as to our state appropriation. The governor’s budget plan calls for a 31.5 percent decrease in funding, whereas the legislature has recommended a decrease of 6.5 percent. This provides an appropriation decrease for EIU of between $12.9 million and $2.7 million. Conversely, we have made progress with our recruitment efforts for our Fall 2016 freshman class and it appears that it will be similar in size to our class last fall. This is a promising indicator that we may have begun to stabilize our freshman enrollment. Nevertheless, our total enrollment will continue to see an overall decline as our larger junior and senior classes graduate.
It has become critically important that EIU right-size itself to the level of its lower student enrollment. This will allow for both holding tuition at an affordable rate necessary for student recruitment and having resources available to focus on building EIU's academic strength and fiscal sustainability. If no changes in university expenses are made this year over last year’s expenditures, we estimate the difference between our revenue projections and our expenses for FY16 would be a deficit of between $12 and $14 million (based on a 6.5 percent appropriation decrease). The deficit could become substantially higher depending upon the final appropriation level. With virtually no reserve funds to call upon as we balance this year’s budget, we have no alternative but to identify actions to enhance revenues and implement expense-cutting initiatives, including layoffs. Although the number of layoffs has not been identified nor a list of names developed at this time, notification to individuals by their supervisors will begin in July.
I have been meeting with leaders of our shared governance groups and other constituents describing the university’s financial position. I have also expressed my confidence that we can use this challenge to right the course of EIU’s business plan and create a pathway of success and sustainability that will ensure that our future is as enviable as our past.
I have begun working with the vice presidents and they, in turn, with their unit leaders, to begin reviewing budgets and developing immediate strategies to collaboratively manage our FY16 budget through expense cuts and entrepreneurial revenue-producing plans. Decisions will also be informed by the CUPB-prepared Program Analysis submitted to the President’s Office in April 2014. The university will be unified in meeting the financial challenge and all divisions will be responsible for its solution. I will continue to meet and collaborate with EIU’s shared governance leadership and keep the university community updated through timely campus-wide messages.
EIU is a community that extols great passion, intellect and creativity. I am certain that together we will meet our financial challenge with the university emerging much stronger and more adaptable to new opportunities. During this period of financial adjustment, we will continue to be ever cognizant of our core educational mission and shared values of academic excellence, student success and a positive student experience.
I am very grateful for the opportunity to serve as Eastern’s 12th president and you can trust that I will work tirelessly to ensure that our university moves proudly and successfully forward.
David M. Glassman
President, Eastern Illinois University