NEWSLETTER, PSU-AAUP, HIGHER ED FACULTY

PSU’s Budget Surplus

January 18, 2022 / PSU-AAUP

During the Faculty Senate Budget Forum in November, we learned that PSU ended the 2020-21 fiscal year with a $32 million surplus. The $62 million windfall – the University had budgeted for a $30 million deficit – arrived in the form of Higher Education Emergency Relief Funds (HEERF) to help with losses brought on by the pandemic. Of the $62 million in HEERF awards to the institution (i.e., not earmarked for students), PSU spent $36 million to cover lost revenue (mostly tuition and auxiliary losses), leaving $26 million in reserve. Hooray! That could go some way to make university employees whole after having suffered real declines in their salaries due to inflation.
 
Not so fast, we’re told. At its January meeting, President Percy informed the Faculty Senate that half of that amount, $13.5 million, will be new expenditures – the President's Strategic Investment Plan. Seemingly anticipating some debate over how all the extra money ought to be used, the President emphasized that “these funds in central reserves are one-time only, not recurring funds… used to support ongoing budgets and expenditures.” So, by the sounds of it, even the remaining $13 million in HEERF relief put into central reserves will not be used to recover any of the repeated budget cuts affecting our members of late.

Dollars are fungible. If reserves can be used for large one-time investments, those same amounts can take the form of smaller but recurring expenditures – if not forever, then for several years. And with the uncertainty characterizing university budgets in the age of COVID, that’s pretty much the same thing. This should not end the discussion of what can and cannot be done with the windfall created by pandemic relief from the federal government.

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