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UMKC expecting to lose $10 to $15 million in revenue due to pandemic, restructuring

Lukas Kenney and Sam Bellefy

The coronavirus pandemic is bludgeoning UMKC’s finances. 

“[We are] experiencing significant financial issues right now,” Chancellor Mauli Agrawal told U-News. 

In an April 15 email to faculty and staff, the chancellor anticipated a net revenue loss of $10 to $15 million for the remainder of fiscal year 2020, which ends on June 30.

According to university spokesperson John Martellaro, UMKC expects the loss because of several factors: refunds to students for housing, dining and other service fees, a withhold in state funding, cancellations of revenue-generating events, conferences, and activities on campus and additional costs to safeguard the campus during the pandemic. 

As a consequence of the financial loss, university officials have directed each academic unit and administrative department to cut budgets for the remainder of the fiscal year. 

The university has frozen new hiring and most pay raises, and the chancellor’s cabinet and the deans have agreed to take a 10% pay reduction.

University officials are still determining the impact of the pandemic on the budget for fiscal year 2021, which runs from July 1 2020 to June 30 2021.

“Many FY21 variables are uncertain,” wrote the chancellor in an April 20 email. “Nonetheless, we anticipate that revenues will be significantly reduced.”

As a result of the expected revenue reduction, leaders at UMKC have asked all administrative and academic units to cut their budgets by 12.5% to 17.5% for fiscal year 2021. Each unit will create its own budget reduction proposal which will be reviewed by the chancellor’s office. Those figures could be adjusted quarterly depending on changes to the financial situation.

Agrawal indicated that achieving targeted budget cuts would likely require furloughs, layoffs, a reduction of adjunct and non-tenure-track faculty, increased teaching loads for current professors and halting any new stipends for graduate students. 

He added that cuts would also lead to “significant reductions” of non-compensation expenses, which includes food and business costs, as well as a continued freeze on travel that uses school funds.

To handle the ongoing budget troubles, Agrawal has announced UMKC Forward, a process designed to reduce the university’s permanent operating budget by 15%. According to its webpage, UMKC Forward will be composed of two teams of students, faculty and staff. The first team will look at options to restructure and downsize the university, while the second time will determine new sources of investment and revenue.

“The coronavirus crisis has brought into sharp focus a long-standing issue for UMKC,” said the website. “In recent years, the campus financial landscape has been one of tight budgets, narrow margins and low reserves. UMKC has it in its power to determine how the university will emerge from this dark period and evolve into a much more dynamic place—one that will better serve future generations in what is certain to be a very different higher education landscape after COVID-19.”

By July 10, the teams will give their recommendations to the chancellor. On July 24, the chancellor will announce the final decisions. These will be implemented from August to December. 

“Other changes will occur over the next two to three years,” Agrawal said.

Despite the planned restructuring, university officials have not mentioned cuts to the budget for student organizations. According to Zane Hefflin, the 2019-2020 comptroller for the Student Government Organization, little is expected to change. 

“I believe the projected budget for next year will be similar to that of this year,” he said.

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