photo by: Mike Yoder/Journal-World File Photo

University of Kansas students visit and pass between classes outside of Wescoe Hall and across Jayhawk Boulevard from Strong Hall on Friday, Feb. 6, 2015.

The University of Kansas over the next fiscal year has budgeted for base tuition losses totaling more than $41.7 million as the COVID-19 pandemic continues to upend the landscape of higher education.

A Journal-World analysis of the university’s budget for Fiscal Year 2021, which runs through June 30, revealed that in addition to budgeted tuition losses, KU has cut tens of millions of dollars from its operating expenditures and the individual expense budgets of numerous departments to make up the possible $120 million shortfall it faces due to the pandemic.

The clearest indicator of KU’s uncertain financial situation, however, is demonstrated by the fact that the university’s budgeted expenditures come in $70.8 million, or 9.8%, lower than the listed overall budget of $723,547,073.

That overall budget would actually be a 1.5%, $10.6 million increase from the previous fiscal year, but in Fiscal Year 2020, KU’s expenditures matched its overall budget total — which means the university cut its spending by $60.2 million for 2021.

KU has said it would face financial ramifications from the COVID-19 pandemic for years to come. But in future years, it may not have the reserve funds available that it used to plug some holes in the 2021 budget.

For example, the largest reduction between Fiscal Year 2020 and Fiscal Year 2021 came from $54.3 million in “general use” expenditure budgets for KU’s individual departments. However, the 2021 budget shows that the university used $34.8 million from an academic reserve fund that usually accumulates money instead to fill in some gaps.

In the previous budget, that reserve fund had around $38 million available, which means in Fiscal Year 2022 it would ostensibly have only $3.2 million remaining.

Here are some other notable findings from the executive summary of KU’s current budget:

• The 2021 budget did not allow for 2.5% merit salary increases for eligible employees.

KU was able to uphold bonuses of $5,000 to each assistant professor promoted to associate professor and $10,000 to each associate professor promoted to full professor because of funds available through the new budgeting model introduced in 2018.

• In its annual budget request to the state of Kansas, KU was awarded $430,433.

The university saw $2.86 million allocated to it in block grant funding from Gov. Laura Kelly’s budget recommendations.

• $3.5 million of state funding that was going to KU was replaced with money from the CARES Act stimulus package, which placed on it many more restrictions for how KU could use it.

• KU was able to eliminate a $2.49 million debt service related to the School of Pharmacy and have it become an obligation of the state of Kansas, rather than the university, to finish paying off.

On Thursday, KU Provost Barbara Bichelmeyer and CFO Diane Goddard sent an email to the faculty and staff members breaking down the specific losses that have accounted for the potential $120 million shortfall facing the university.

Over the coming year, KU has projected an $87 million hit to its core operations, which includes $62 million in lost tuition revenue, $5 million in lost revenue from course fees and a $20 million loss in appropriations from the state of Kansas.

In addition, the university expects to lose $19 million in revenue from services such as student housing, student recreation services, student health care and parking.

And to round out the $120 million figure, KU officials have also calculated losses of $14 million from affiliates such as Kansas Athletics, the Memorial Union on campus, the Hilltop Child Development Center and the university’s Office of Research.

Those figures remain current, but could grow even further if the severity of the pandemic worsens and again forces the closure of campus, the two leaders said. And even if total losses stay near $120 million, that is a hit KU will feel for a while.

“…It is important to recognize that the $120 million shortfall is not a one-year challenge. Given the magnitude of our financial situation, we will need to continue making difficult decisions for the foreseeable future,” Bichelmeyer and Goddard said. “The reality is that the university will continue to be in a vulnerable financial situation as we navigate this unprecedented crisis.”

KU also announced it suffered $35 million in confirmed losses during fiscal year 2020, when the pandemic first forced the campus to close. Those losses were primarily from shortfalls in parking, student housing and dining packages — which KU refunded on a prorated basis.

KU also said it expected to spend an additional $30 million on various safety measures — such as personal protective equipment, COVID-19 testing and contact tracing, and enhanced sanitation — in preparation for the fall semester. Some of those expenses may be eligible for federal funding, the message said, but many will not be.

In response to questions for this article, KU spokesperson Erinn Barcomb-Peterson said that fall semester enrollment numbers wouldn’t be available until the Kansas Board of Regents releases them in the fall (usually after the 20th day of classes), and did not say if KU was internally projecting a certain enrollment decrease.

“We believe that the fallout from the pandemic will alter enrollment patterns for years to come,” she said in an email.

Barcomb-Peterson did not answer questions about how many KU employees have enrolled in a voluntary separation incentive program announced in early June to cut salary costs, nor did she answer a question of whether Chancellor Douglas Girod had asked KU Endowment to “unrestrict” donor funds to help mitigate the financial issues.

“We will share further information as available,” Barcomb-Peterson said.

KU’s fall semester is scheduled to begin on Aug. 24.