Short-term campus cashflow issues could set the stage for a fiscal crunch

Copy: Grad rates and demographics, 2019
Infogram

It didn’t take long for the coronavirus pandemic to cut into cashflow on Idaho’s campuses.

Colleges and universities are incurring some unexpected expenses — as they move classes online and deep-clean and sanitize buildings that now stand empty.

On the other end of the equation, the colleges are losing revenue as they refund room and board payments to students, shutter cafeterias and bookstores and cancel lucrative campus events.

Idaho’s plight is hardly unique. “Every college in the country is facing an immediate cashflow crisis,” said Terry Hartle, senior vice president of the American Council on Education, a Washington, D.C.-based membership organization that represents colleges and universities across the country.

But in Idaho, the sudden money crunch exacerbates other financial problems — such as longstanding budget shortfalls and state-ordered spending cuts. And the short-term cashflow issues could set the stage for even bigger problems.

This week, the state’s three four-year universities didn’t provide an estimate for their immediate coronavirus-related losses. In Lewiston, Lewis-Clark State College has started giving students prorated refunds on their spring semester room and board, while anticipating the loss of a big moneymaker — the NAIA baseball national championships, an event the college had hosted for 20 consecutive years. All told, the outbreak has left about a $2 million hole in Lewis-Clark’s $37 million annual budget.

Idaho’s community colleges report similar budget challenges.

Coeur d’Alene’s North Idaho College has refunded about $218,000 in student room and board, said Chris Martin, NIC’s vice president for finance and business affairs.
The College of Western Idaho has spent about $75,000 cleaning buildings, and using fogging equipment to sanitize facilities, said Mark Browning, CWI’s vice president of college relations.
Idaho Falls’ College of Eastern Idaho doesn’t have dorms or meal service, but CEI has incurred similar cleaning costs. The rapid transition to online learning has been costly, as CEI has had to purchase or acquire loaner laptops for staff and students, cleaning buildings and fogging them has come to about $75,000, purchasing additional Zoom licenses and installing a WiFi access spot in a campus parking lot. CEI will take about a $500,000 hit this budget year, vice president of finance Byron Miles said, but he said the biggest impact could come in the next budget year, which begins July 1.

For two- and four-year institutions and public and private institutions alike, the long term looks daunting as well.

At The College of Idaho, a private institution in Caldwell, coronavirus has affected cashflow and cut into the value of the school’s endowment fund, said spokesman Joe Hughes. The college’s long-term outlook hinges on how quickly the nation overcomes the pandemic, he said, “and then how the broader economy rebounds.”

The coronavirus outbreak is already playing short- and long-term havoc with Idaho’s colleges and universities. Idaho State University is gearing for a potential $17 million shortfall.

In the face of hard realities — a preexisting deficit, state budget cuts and a potential drop in enrollment — Idaho State University is gearing up for a $17 million shortfall.

“From a financial perspective, this won’t be an easy storm to weather,” said Dani Dunstan, chief of staff for ISU President Kevin Satterlee, during a State Board of Education meeting Monday.