Ohio State Estimating $300 Million Loss of Revenue, Preparing for Potential Furloughs Due to COVID-19

By Dan Hope on June 2, 2020 at 1:10 pm
University Hall

Ohio State is estimating a $300 million loss of revenue for the 2020 fiscal year due to COVID-19, president Michael Drake said in a message to the university community on Tuesday.

Per Drake's message, Ohio State has addressed the loss of revenue “through several actions, including: a hiring pause with exceptions for essential services and key faculty and research positions; a pause to some capital projects; a pause in off-cycle salary increases; a restriction on university travel; greater stringency around non-essential procurement and other operating expenditures; and the use of limited strategic cash reserves and the availability of federal stimulus funds via the CARES Act.”

Drake said Ohio State will present an interim operating budget for the months of July and August to the Board of Trustees this week, in which Ohio State is budgeting for $58 million in cost savings for its general campuses and another $45 million for the Wexner Medical Center.

“Due to the uncertainty, we are unable at this time to present a budget for the full fiscal year or project additional needed cost savings beyond July and August,” Drake said. “Overall, we anticipate that the upcoming fiscal year will present further budgetary challenges due to COVID-19. We are planning for multiple scenarios while working to maintain and advance teaching, research and patient care. As shared, we have asked all colleges and support units to prepare a range of budget projection scenarios for FY21, including potential 5%, 10% and 20% reductions in spending. Individual units across the university are being given the flexibility to manage these budget reductions in a way that meets their goals and objectives.”

The Board of Trustees will also consider this week whether to pass a board rule that would allow for the creation of a furlough policy. Ohio State is “not planning to institute furloughs at the present time,” but has not historically had a furlough policy, and “given the fiscal uncertainty we are facing, we need to have the flexibility to institute further cost-saving measures if necessary,” Drake wrote.

“Any furloughs in the future would be carefully and transparently considered and would be based on the budgetary circumstances and planning of individual units and the university as a whole,” Drake said. “Under the proposed policy, the Board of Trustees would have to approve the implementation of a university-wide furlough plan.”

Ohio State is also implementing a pause in its annual merit compensation process for the 2021 fiscal year.

The university has not yet announced whether students will attend classes in person this fall, but “will announce a centralized operations plan for the autumn semester soon,” Drake said.

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