As the coronavirus races across the world, the higher education system is suffering its own losses — especially in its financial departments — and JMU hasn't been left behind.
Federal and state agencies requested at the beginning of the COVID-19 crisis that JMU leadership estimate the financial impact the pandemic would have on the university. Charles King, senior vice president for administration and finance, said he estimated that the pandemic will cost JMU around $33 million across the university in both direct costs and missed-out-on revenue. That number was later confirmed by Caitlyn Read, JMU’s spokesperson and director of communications.
An official accounting hasn’t yet been conducted by the university to measure the real outcome, but JMU leadership has acknowledged the effects of the pandemic on the university’s operations.
“Every division of the university has stepped up to figure out ways to help us manage the fiscal challenges even as we seek to maintain our core academic mission and plan for the future,” President Alger said in a letter to the JMU community. “We don’t yet know what the budget will look like for this coming academic year, so we’re making multiple contingency plans to prepare for the possible scenarios we might face.”
As the university closed its on-campus learning environments and transitioned to online delivery of course material following spring break, the JMU community took up the call for refunds — for housing costs, meal plans and parking passes — and the university consented, giving out just under $13 million in refunds for housing, dining plans and parking pass costs. JMU has also spent $400,000 solely on the transition to online instruction itself, including equipment, software and other online instruction needs.
“Ordinarily at this time of year, the Governor and General Assembly are completing their work on the state budget, and our Board of Visitors is preparing to vote on tuition and the budget for the upcoming academic year,” Alger said in a letter to JMU faculty and staff. “Obviously, circumstances have changed dramatically in recent weeks, and we are all striving together to make good decisions that will protect the university, its people and its mission.”
The university was able to recoup some of those costs with money provided by the federal Coronavirus Aid, Relief and Economic Security (CARES) Act, but the $12 million JMU received fell short of covering the entirety of its costs. Six million of the funding, specified for institutional support, was able to cover about half of the cost of refunds issued by the university, but JMU was left with a $5 million bill, resolved with funds from JMU’s reserves. The other $6 million in federal funding, not directly funneling into the university’s account, went to student support, allowing JMU to offer aid to just over 6,000 students.
"We need to get this money in the hands of students, and we need to do it as quickly as possible," Brad Barnett, JMU’s director of financial aid, said when JMU was strategizing how to allocate the emergency aid. "There are students in need, and we want to help."
Also among questions about the pandemic’s economic effects on JMU was tuition pricing. When the Board of Visitors (BOV) met May 15, it ultimately decided to freeze tuition and increase comprehensive and housing fees following a public comment meeting April 28. However, while tuition remains the same, comprehensive fees will increase by $124, and room and board fees will increase by $384 this year.
Over the summer, the JMU Board of Visitors met virtually three times and made several large decisions about the university's response to the coronavirus.
All JMU departments have either made decisions because of fiscal insecurity or have so far avoided making decisions at all. Despite messaging from senior administration that JMU is doing its best to avoid any impact on its people, across the university’s academic units, all department heads were asked to cut their staff budgets by 25%, English department head Dabney Bankert said, putting increasing pressure on adjunct faculty as classes have been cut and reassigned to tenured professors to save money.
“Those of you who have worked at the university for many years know that we have managed past budget challenges while avoiding layoffs and furloughs by taking prudent actions,” Alger said in the same letter to JMU faculty and staff. “That is certainly our goal and intent again in this crisis, and we will do everything possible in pursuit of these guiding principles.”
In the athletics department, all budgetary decisions are on hold, Assistant Athletics Director for Communications Kevin Warner said, until the department staff has time to fully examine reports from the fiscal year that ended June 30 for JMU. While a strict department-wide spending freeze has been in place since March, JMU Athletics has yet to take a full accounting of the pandemic’s fiscal toll. The department also hasn’t released any concrete guidance on what sporting events may look like.
As the fall season approaches, JMU Athletics has yet to make any large-scale budgetary decisions, citing a pending review of 2019-20 fiscal end-of-year reports to be completed early in the fall.
“We’re working through a number of different scenarios, but I don’t think anybody knows exactly what the status of the pandemic is gonna be come September,” Warner said. “We just prepare for as many different possible scenarios as we can.”
Though $33 million comprises only about 5% of the university’s total operating budget, which is about $628.4 million, the blow will continue to impact decision-making by senior administration. As the university moves toward the fall semester, many fiscal questions still remain unanswered as assessments of the end-of-year fiscal reports are being drawn up and analyzed.
“Uncertainty with regard to the state budget is of course exacerbated by many other variables that will have an impact on the university’s budget for this coming year,” Alger said in the same letter to JMU faculty and staff. “For these reasons, the budget situation is extremely fluid at this point, and the university must prepare for a wide range of financial possibilities for this coming academic year.”
In the following six articles in this series, The Breeze’s investigations desk has analyzed six different areas across the university that have been impacted by the virus, looking at BOV decisions, the athletics department, CARES Act funding, adjunct faculty’s situation, fundraising efforts and 2020 enrollment numbers. Through more than 30 interviews with over 25 sources and hundreds of pages of documents examined over a span of three months, we’ve built a picture of what JMU’s financial situation looks like in the wake of the pandemic’s shockwave.
Over the next two-and-a-half weeks, this series’ stories will be published on Mondays, Wednesdays and Fridays, with the next coming this Wednesday, July 22.
This series was reported by Jake Conley, Brice Estes, Jamie McEachin and Amy Needham.
Contact Jake Conley, investigations editor, at email@example.com. Contact Brice Estes at firstname.lastname@example.org. Contact Jamie McEachin at email@example.com. Contact Amy Needham at firstname.lastname@example.org.
For more coverage of JMU and Harrisonburg news, follow the news desk on Twitter @BreezeNewsJMU.