Faculty Prepares For $5.5M Projected Budget Shortfall

Olivia Allery, news editor

Photo of Augsburg entrance at Twentieth Avenue and Eighth Street taken by Olivia Allery on Jan. 26 

The recent budget projections for the fiscal year of 2023 (FY2023), which were presented to the Augsburg Faculty Senate a couple of weeks ago, seem to indicate a challenging year ahead for the university. Augsburg is projected to have a $5.5 million shortfall next year, and the 2023 expenditures are estimated to outweigh the university’s generated revenue. In the face of the daunting year that lies ahead, the administrative staff are working to create a plan to maintain the Augsburg student experience – but it remains to be seen whether these plans may necessitate layoffs or changes to classes, which have been concerns since 2019.

“It’s hard to give detailed estimates at this point, with so many variables,” said Faculty Senate President Andrew Aoki to the Echo regarding budget projections for FY23. “What we can say is that some significant areas of expenditure will increase while revenue increases will probably be modest. A key goal of planning is to avoid having a budget shortfall in fiscal year 2023 (FY23).” 

With expected expenditures for 2023 being higher than generated revenue, there will have to be a plan of how to accommodate this projection. This plan’s effects on Augsburg will not be apparent until 2023.

“We will need to look for areas to reduce expenditures for FY23,” Aoki continued. “The forecasting budget pressures are for FY23, not for the current fiscal year, so the forecast doesn’t have a great deal of direct bearing on current operations, which are funded under the FY22 budget.” 

In addition, there are concerns about Augsburg’s growing debt. According to faculty and staff members consulted by the Echo, at a meeting in mid-January, administration informed staff and faculty that the university is projected to be $5.5 million short for next year. In 2019, administration reported to staff and faculty that the university would be $3 million short. According to a staff member who asked to remain anonymous, this shortage resulted in many layoffs and staff cuts. 

“There is no detailed plan yet,” said Aoki of the projected shortfall. “In the last few days we received the data needed for a good assessment of the current year, providing a much firmer basis for modeling the budget for next year. With this information, we will be starting intensive work on plans for FY23. This planning will involve a very wide range of parties, so it’s going to take a little while to develop it fully.”

While the FY23 budget proposal is still in development, there are already some foreshadowings of what changes could be coming for courses, faculty, and staff. In the current spring semester, some courses have been cancelled and changed to independent studies. 

Registrar Tom Kelsey has expressed that changes to courses and academic departments is mostly connected to Augsburg’s financial situation. “As with all institutions, Augsburg needs to be mindful of financial sustainability while trying to ensure students are able to make progress toward degree completion,” Kelsey said to the Echo. 

This has mostly affected the students and faculty of smaller departments such as theater, history and music. To some, this may not affect schedules at all, however, classes being dropped or converted can seriously affect a person’s academic progress towards graduation.

“In rare cases an entire class might be switched to an independent study,” Kelsey explained. “It is more common for a course to be canceled and for independent study registration requests to come into our office in the days to follow as departments have time to work with students and figure out a plan.” 

According to Kelsey, cancellations and conversions happen on a case-by-case basis, with there being no specific number of students required to prevent a class from being cancelled. “It is certainly not common [for a class to be converted], and I can say that the faculty do not make these decisions lightly,” Kelsey said. “They make every effort to ensure that students affected by course cancellation are able to continue progressing toward graduation.”

One student who was affected by a course conversion was fourth-year theater student Danny Reinan, whose required Scenic Design class was cancelled before the Spring semester had even begun. “Scenic Design, which had been on the course list since late last year, was suddenly canceled just last December,” they said. “This course is required for my theater major, so I was rather concerned about it. Fortunately, I was able to rejoin the class when it was converted to an independent study, but doing so required me to write a petition to the registrar’s office requesting that they waive the eight credit independent study cap, because I had already earned eight credits from previous independent studies.”

These changes have also had an effect on faculty of these classes as well. Sarah Bahr, instructor of the aforementioned Scenic Design class, was also affected by the shift to an independent study. “One of the positives of shifting the class to an Independent Study, meant that the course was not canceled,” Bahr told the Echo. “This benefited 4 out of the 5 students who need the course to graduate, 1 of them graduating this spring.”

Although the shift has benefitted the students who needed the class to fill their major requirements, it came at the cost of Bahr’s pay. “The biggest negative is my compensation and how it relates to the amount of time I can commit to teaching the course,” she said. “I am being paid per student, which equals to about half the amount I would normally make teaching this course. Since the compensation is lower, I am not able to put in as much time creating the course and meeting with my students.”  

Because of the reduction in Bahr’s pay, she can only convene the students once a week, and serves in a mentoring role that is less direct than a traditional class setup. Although this format is true to what is expected of an independent study, Bahr is all too aware that this is not what the students signed up for. “I’ve struggled with the morality of giving the students the education they signed up for and are paying for, but I need to stay realistic in regards to what I’m being compensated for,” she said.

With previous semesters seeing overwhelmingly negative effects of a budget deficit, this projection for 2023 is looking to be working with another large budget deficit as well. While it may not be possible to see the true effects of this projection until 2023, this 2022 spring semester could have potentially given us a look into what a further budget deficit could do. 

The Echo reached out to Chief Financial Officer John Coskran and President Paul Pribbenow for confirmation or comment on the subjects in this article and did not receive direct comments in time for publication. 

Any comments received from their offices confirming, debunking or commenting on what is stated in this article will be included in the online version of this article.

Editor’s Note: This article responds to early projections for FY2023 that take into account the impacts of Covid-19 without relief funds. The FY 2023 Budget is not finalized or approved.

Updates as of the 2/7/22 issue of the article can be found here.