Ohio State University Suffers $300 Million Budget Loss From Shutdown

One of the biggest public universities in the world reports a huge loss from the voluntary shutdown over the virus.

For 2021, the university may have to cut the budget by an additional 20%.

The Ohio State University announced new efforts to confront the budget challenges caused by the COVID-19 pandemic. President Michael V. Drake addressed the Ohio State community with an interim budget plan and measures that will give the university more flexibility moving forward.

In FY2020, ending June 30, 2020, we estimate that we will experience a loss of $300 million in revenue sources across the university and Wexner Medical Center. This significant shortfall has been addressed through several actions, including: a hiring pause with exceptions for essential services and key faculty and research positions; a pause to some capital projects; a pause in off-cycle salary increases; a restriction on university travel; greater stringency around non-essential procurement and other operating expenditures; and the use of limited strategic cash reserves and the availability of federal stimulus funds via the CARES Act.

This week, we will present to the Board of Trustees for consideration an interim operating budget for the first two months of fiscal year 2021: July and August. Based on the continued uncertainty related to COVID-19, we will need to realize $58 million in cost savings in those first two months on our general campuses while the Wexner Medical Center is projecting needed cost savings of an additional $45 million for the same time period. Due to the uncertainty, we are unable at this time to present a budget for the full fiscal year or project additional needed cost savings beyond July and August.

Overall, we anticipate that the upcoming fiscal year will present further budgetary challenges due to COVID-19. We are planning for multiple scenarios while working to maintain and advance teaching, research and patient care. As shared, we have asked all colleges and support units to prepare a range of budget projection scenarios for FY21, including potential 5%, 10% and 20% reductions in spending. Individual units across the university are being given the flexibility to manage these budget reductions in a way that meets their goals and objectives.

Source: Ohio State University

Published by Hoosier Econ

Located out of Central Indiana. Blogger of economics, politics and societal trends.

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