KU anticipates $120M revenue shortfall, $30M in direct COVID-19 expenses

TOPEKA — The University of Kansas anticipates a revenue shortfall of $120 million during the current fiscal year assuming students return to campus in August for fall semester classes, officials said Thursday.

Barbara Bichelmeyer, provost and executive vice chancellor at KU, said the projection was a “moderate-case” assessment. The university reported actual revenue losses of $35 million in the fiscal year ending in June due to the spring transition to online-only instruction.

“The $120 million shortfall assumes we are able to bring students back on campus in some capacity this fall. If our commitment to safety precludes this, the shortfall will increase significantly,” she said.

Two-thirds of the projected loss was tabulated this way: $62 million from tuition, $5 million from course fees and $20 million from state appropriations. The university could expect to miss out on $19 million from assessments for student housing, recreation services, parking and the campus health center.

In addition, KU officials said, $14 million could be lost by affiliated entities ranging from Kansas athletics to the student union and a child care center.

KU officials also said extraordinary expenses to deter spread of COVID-19 among students, faculty and staff in the fall semester could reach $30 million. The figure reflects purchase of personal protective equipment, testing and contact tracing, securing quarantine and self-isolation spaces, enhanced sanitation, new technology for flexible course offerings and reconfiguration of academic spaces.

“Though some of these expenses will be eligible for federal funding this summer, many will not. Thus, these expenses need to be considered alongside our projected revenue shortfall to fully appreciate the magnitude of our financial challenges,” Bichelmeyer said.

The statement issued by KU officials said most of the $35 million loss in the last fiscal year was tied to dining, housing and parking services. These units covered those losses by spending down cash reserves, but that source won’t be available in the future.

Bichelmeyer said a hiring freeze, six-month salary reduction plan, voluntary separation program and sweep of accounts on campus could free $58 million to address the shortfall.

“Given the magnitude of our financial situation, we will need to continue making difficult decisions for the foreseeable future. The reality is that the university will continue to be in a vulnerable financial situation as we navigate this unprecedented crisis,” she said.