Wednesday, May 27, 2020
May 27, 2020

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In Our View: University-Level Thought

WSU’s new head points out that wise spending requires long-term planning

The Columbian
Published:

It didn’t take Kirk Schulz long to make a splash as president of Washington State University. And while his call for fiscal responsibility is a prudent one, it brings into focus some of the issues facing major colleges these days.

Schulz, who officially assumed office on June 13, grabbed a bit of attention by taking a pointed look at WSU’s finances. “In short,” he wrote in an open letter, “we have been spending more money annually over the past couple of years than has been brought in, which is simply not sustainable. As a University we are spending down central reserves at a significant rate and will need to make some adjustments as to how we budget future building projects and new University initiatives.”

The spending is easy to pinpoint. WSU, enjoying a time of record enrollment and rapid development, recently funneled $132 million into capital projects. According to the Associated Press, the university also has projects worth $212 million under construction, and another $240 million worth of projects are in the design or planning stage. Schulz noted that school officials have not identified funding sources for many of those projects, and that some were approved by regents “without a robust financial analysis.”

State universities are unique entities. They are a business, which must follow the best practices of private enterprise, but also are charged to serve the public good. A majority of financing comes from a combination of student tuition and funding from the state Legislature, and the goal is to keep a top-flight education within reach of the state’s brightest students. Higher education is an investment that can pay benefits for all of a state’s residents. Capital projects can help attract worthy students and can enhance their educational experience.

But Schulz is correct in calling into question the spending habits of university officials. As part of a four-pronged approach, he wrote: “First, we will be re-instituting a formalized budget development process for the University. It has been a number of years since a formalized process has been used internally at WSU,” and “Second, we can no longer build new buildings without a comprehensive funding plan in place, and we cannot rely on University reserves to ‘make up’ for funds that haven’t been clearly identified.”

While Schulz’s initiative focuses on large spending projects, one of its most important aspects is the attention paid to intercollegiate athletics. The fun and games at major universities often are treated as though they have little connection to the educational mission and are used as a public-relations arm. At Washington State, the athletic department is operating at a deficit of $13 million a year, and fundraising has lagged expectations.

A successful athletic program can boost morale on campus, generate national attention for a school, and serve as a point of pride for alumni and supporters — but few schools are willing to conduct a genuine cost-benefit analysis of big-time sports programs.

At WSU, athletics represent a small portion of the total budget, but they are symbolic of the financial issues facing the university. Other large state-funded schools would be wise to follow Schulz’s lead in treating athletics as a part of the university’s mission rather than a separate enterprise.

In the long run, fiscal responsibility and attention to financial details will go a long way toward making Washington State University a world-class institution. Schulz is off to a strong start in this regard.

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