KU estimating $120 million shortfall in coming fiscal year as a result of COVID-19 pandemic

photo by: Chris Conde/Journal-World File Photo

Strong Hall on the University of Kansas campus is shown on Sept. 13, 2018.

Story updated at 2:54 p.m. Thursday

The University of Kansas is facing a budget shortfall that amounts to nearly 26% of its general operating budget — or $120 million — for fiscal year 2021, Chancellor Douglas Girod said Thursday.

The staggering figure is attributed to direct losses in research dollars, event fees and student housing and dining revenue after the COVID-19 pandemic forced KU to essentially shutter its campuses in mid-March.

Girod, in a written message to the KU campus, said the figure could grow significantly higher if the university isn’t able to resume in-person classes in the fall semester.

And even if KU is able to resume on-campus operations without another COVID-19 outbreak, the shortfall isn’t something that will go away once the pandemic is resolved, Girod said.

“The fallout from this pandemic will alter enrollment patterns, state funding and all of our revenue streams for years to come,” he wrote.

In the early weeks of the pandemic, Girod had estimated that the university’s losses would be in the range of “tens of millions of dollars” but never publicly speculated a figure as large as $120 million.

Thursday’s announcement came less than a week after the Journal-World reported that much of KU’s financial situation was a mystery, and university officials had for weeks dodged the newspaper’s questions about the specific monetary challenges KU was facing.

The Journal-World on Thursday asked whether there was an itemized list of the university’s losses, but KU officials did not immediately respond.

Girod’s announcement did not delve into specifics about how much money the university and its various departments have in reserve funds, and the chancellor acknowledged that there were still many unknowns about the crisis.

For example, the state of Kansas may still have to reduce funding for higher education in its fiscal year 2021 budget. And it’s not yet known whether higher education may be given more funding in future COVID-19 stimulus packages at the federal level.

Kansas Gov. Laura Kelly said last week in response to a question from the Journal-World that the state wanted to wait before making any concrete changes to the 2021 budget. Her office also was not immediately available for comment Thursday.

When reached about possible funding from federal stimulus packages, Jack Cline, who serves as KU’s lobbyist in Washington, D.C., directed the Journal-World to university spokesperson Erinn Barcomb-Peterson.

Going forward, Girod said options to mitigate KU’s sizable losses include sweeping vacant position budgets, utilizing central and unit reserve funds and maintaining the hiring freeze KU implemented in April for the foreseeable future.

“I share this sobering assessment to contextualize the hard decisions we need to make. With a budget shortfall of this magnitude, KU needs to adopt new business models, reorganize and restructure, streamline and cut programs, and implement long-term cost reductions to address historic financial challenges,” Girod said. “As I have said before, all options must be on the table for KU to manage through this.”

Though KU wants to protect as many of its employees as possible, Girod hinted that furloughs and layoffs — what he called “painful cost-savings measures” — are likely on the horizon for the state’s flagship university after Kansas’ new fiscal year begins July 1.

KU said more information about future plans would be communicated to the campus community by the middle of June.

Girod’s announcement was forwarded to the Journal-World via an email from Barcomb-Peterson. When she sent the message, it also captured an email from Joe Monaco, KU’s director of strategic communications, that perhaps best illustrated the magnitude of what the university is facing in the coming years.

“Hold onto your hats,” the message said simply.

Contact Conner Mitchell

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