FY 2022 Current Projection vs. FY 2022 Revised Budget

Despite the anticipated increase in retirement payouts, general wage increases and no increase in tuition and fee rates, we are expecting to break-even. The ability to do so is largely due in part to the $12.4 million in federal funds and the additional $8.6 million in state funds we received this fiscal year.

Our overall enrollment declined 5.6% from the prior year, but when compared to the Revised Budget we submitted back in October, our spring enrollment was slightly better, resulting in a $1.0 million combined increase in tuition, fees and auxiliary revenues. Our All Other Revenue line is slightly down by $0.2 million. Not part of the Revised Budget, were the $3.7 million in Additional State Appropriations and an additional $1.7 million in Fringe Benefits Paid by State. As a result, our projected revenue is now $6.1 million higher than the revised budget.

Total full-time personnel services are $2.7 million higher than budgeted, which reflects the $2,500 lump sum collective bargaining payouts, savings from turnover on higher than normal retirements, and a $0.2 million reimbursement from Corona Relief Funds (CRF) for public health employee costs related to Covid-19. At this time, we are expecting a significant number of retirements in this fiscal year, most occurring at the end of the year when it is too late to capture any savings. We expect savings in part-time positions of $0.5 million, while Overtime will decrease slightly. Also, due to the increase in retirements this year and the retro adjustments to longevity and other payouts, we projected a significant increase of $1.2 million in All Other Personnel Services and $1.3 million in Fringe Benefits expense.

All Other expenses are projected to be $0.3 million lower than budget reflecting the savings identified in each division, offset by an increase of $0.8 million in institutional financial aid. Approved FY 2022 Covid-19 expenses of $0.2 were reclassified from the operating funds to the Corona Relief Funds (CRF).

Other Designated Fund Requests decreased by $3.0 million, the net of the incoming $1.0 million ARPA allocation to support hiring adjunct faculty to provide adequate course availability and the $3.9 million Reserves for FY23 Salary Cost. We provided the additional $3.9 million for the impact of retro salary adjustments and related fringe benefits that were earned in FY 22 but will not be paid until FY 23. The total projected incoming transfers of $11.9 million includes the $4.8 million carry forward of HEERF II funds, $6.1 million from HEERF III funds, and the additional $1.0 million from ARPA.

Overall, we maintained a balanced budget, but it is important to understand that this would not have been possible without the $12.4 million in federal funds we received in transfers and reimbursements. Currently, we expect to exceed our approved expenditure cap by $3.2 million because of the projected lump sum payouts and the increase in retirement payouts and fringes.

It is important to understand our University remains on strong financial footing and we will use reserves as necessary to maintain the level of support required to meet the needs of our students, faculty, and staff. We continue to make every effort not to directly impact our student population with cost saving measures.

FY 2023 Spending Plan vs. FY 2022 Current Projection

The Preliminary FY 2023 Spending Plan for Eastern Connecticut State University is a balanced budget because of the one-time federal and state funds totaling $19.5 million, a use of reserves of $3.9 million that were established in FY 22 for the payment of retro salary adjustment and related fringe benefits that were earned in FY 22, a $1.0 million contingency for potential enrollment shortfall, and many reductions in both full-time and part-time staffing, and all other expenses where possible.

After holding tuition, student fees, housing, and food service rates flat for FY22, the approved 5% increase in rates for FY23 are nearly negated by the projected 3.8% decrease in enrollment, resulting in $0.5 million increase. Also, beginning in Fall 2022, Out-of-State students will pay the lower NEBHE rate to attend Eastern, a strategy that will have a greater impact for the 2023-2024 recruiting season. The driver behind the $16.8 million increase in revenue is the Additional State Appropriations and the Fringe Benefits Paid by State, for a total increase of $16.5 million over FY22.

Personal Services and fringe benefits are expected to increase by $10.1 million. With the union contract negotiations settled and the net effect of the savings on the expected retirements and the strategic refills, Total Full-Time salaries is expected to increase by $4.7 million, reflecting the FY22 retroactive general wage increases paid in FY23, the $1,000 lump sum payments, and the FY23 general wage increases. The Part time Lecturers line is reduced to reflect the decreased need due to lower enrollment. However, Student Labor will increase $0.8 million given the 7.9% increase in minimum wage, the reopening of two residence halls, and to support objective 3 of our strategic plan to expand integrative learning on campus and in the community. The All Other Personal Services line will decrease by $1.6 million as a return to our normal retirement payout experience. The biggest increase is the $6.1 million in Fringe Benefits expense, based on the 5% budgeted increase in rates provided by the System Office and the effect of a 10.2% increase in Total Full Time Salaries.

The significant rise in inflation has caused increases in many areas of Total Other Expenses, specifically utilities, gasoline, travel and repairs. Savings were included where possible, but the inflationary increases along with a $0.6 million order for IT switches, resulted in an increase of $0.8 million. The reopening of two residence halls will require 11 more Resident Assistants and Office Assistants to staff the buildings, which will increase Waivers by $0.2 million.

Our Total Designated Set Aside Funds will increase by $1.0 million, the result of the loss of the one-time credit we received in FY22 for debt service. The Total Other Designated Fund Requests reflects the net result of the discontinuation of the $11.4 million in federal HEERF and ARPA funds we received in FY22 and the use of $3.9 million from reserves to support the FY22 retroactive general wage increases paid in FY23 and the one-time 27th payroll. As a contingency, $1.0 million for potential enrollment shortfall.