Mid-Year FY26 Budget Update
This update provides a transparent mid-year FY26 budget outlook and connects it to our broader Western Rising – Commitment 1: Strengthening Foundations work. We are addressing both immediate FY26 pressures and a multi-year structural gap through a disciplined plan to reduce the deficit by FY30 and rebuild reserves to sustainable levels This report remains intentionally conservative and pre-mitigation. It reflects where we land without additional corrective actions beyond those already underway.
Overview
President Bernal is sharing this update to provide a transparent view of where WestConn stands at mid-year and how the university is responding. This mid-year report is intentionally conservative and pre-mitigation—meaning it reflects where we land if we do not add further corrective actions beyond what is already approved.
- Clear FY30 deficit-reduction pathway under Commitment 1
- Quantified cost controls already underway (~$3.9M)
- Expanded focus on enrollment mix and net tuition strategy
- Formation of a Presidential Budget Advisory Group
- Integration of reserve rebuild targets into the plan
The President, Provost Hegedus, and Interim CFO Ron Thomas are forming a Budget Advisory Group within Western Rising – Commitment 1: Strengthening Foundations. The group will provide regular review and advice on budget decisions and will include shared governance and union participation.
The Big Picture
WestConn continues to face a structural gap between what we bring in each year and what it costs to operate—driven primarily by people, benefits, and fixed operating needs. Strengthening our foundations is how we build the institutional resilience to stay focused on our mission. We are now moving from understanding the structural gap to executing a multi-year plan to eliminate it and build long-term resilience.
What FY25 Tells Us
FY25 ended in a strong position—largely because of one-time System Office support. That support prevented a much larger deficit and gave us breathing room to do deeper, structural work with shared leadership and better controls. This one-time support created the runway to begin structural changes that are now underway through Commitment 1.
- $17.6M ARPA funding (one-time)
- $6.6M System Office bridge support (one-time)
- Planned for a $4.5M surplus
- Ended with a $5.8M surplus, mostly due to reduced spending in OE (operating expenses)
What We Planned for in FY26 (Approved Plan)
Our FY26 spending plan assumed:
- Approximately $11.9M in System Office bridge support
- $1.5M in planned reserve use
With those items included, FY26 looked essentially balanced (~+$400K). Without them, the underlying structural gap would have been significant. FY26 was designed as a bridge year—using one-time support to stabilize operations while structural solutions are implemented.
What We’re Seeing at Mid-Year (Key Changes)
Even with some positive signs (enrollment performing around what was expected; auxiliaries balancing out), the outlook is tighter than the original plan. Key drivers include:
- Revenue approximately $0.9M below plan
- More full-time employees than budgeted: 492 actual vs. 481 planned (11 over plan)
- Salary expense approximately $2.6M above plan
- Fringe/benefits approximately $0.9M above plan
- Institutional financial aid approximately $1.4M above plan, reducing net tuition
Mid-Year Snapshot (in dollars)
| Category | Spending Plan | Mid-Year | Difference |
|---|---|---|---|
| Revenue | 112,732,636 | 111,819,918 | (912,718) |
| FT Employee Expense | (49,218,231) | (51,801,459) | (2,583,228) |
| Fringe | (15,414,640) | (16,339,837) | (925,197) |
| Institutional Financial Aid | (7,536,887) | (8,924,314) | (1,387,427) |
| Use of Reserves | (1,500,000) | (4,407,091) | (2,907,091) |
What’s Driving the Change
- Enrollment mix: Part-time enrollment below projections is the primary driver of the revenue shortfall.
- Financial aid strategy: Increased merit investment improved competitiveness but requires tighter modeling to protect net tuition.
- Personnel costs: Higher-than-planned staffing levels (492 vs. 481) due to planning assumptions around attrition and critical roles.
Strengthening foundations is the unglamorous work—systems, controls, staffing discipline, and smart planning—that protects our ability to deliver for students. Stability is “we can stand.” Resilience is “we can absorb pressure, adapt, and keep moving forward without losing who we are.” This update is part of that move from stability to resilience.
What This Means (and What It Does Not Mean)
- This is not an alarm. It’s an early heads-up so we can stay proactive, disciplined, and aligned.
- The main drivers are within our control: hiring, overtime, discretionary spending, and aid strategy.
- Acting early reduces reliance on reserves and helps us avoid surprises later.
How We Are Closing the Gap (FY26–FY30)
WCSU is implementing a multi-year plan to eliminate the structural deficit and restore financial sustainability by FY30.
Mitigation already underway (~$3.9M):
- Administrative reorganization (~$1.7M)
- Overtime strategy (~$750K)
- Operating expense reductions (~$1.5M)
Additional focus areas:
- Net tuition improvement (enrollment mix, retention, pricing strategy)
- New revenue (non-credit, partnerships, facilities use)
- Workforce redesign and shared services
- Academic portfolio alignment
- Procurement, energy, and operational efficiencies
- State/system advocacy and policy alignment
This work is coordinated through Western Rising – Commitment 1 and supported by monthly monitoring and shared governance engagement.
Immediate Actions Underway
To realize better synergies and reduce overhead. Delivering structural savings and reducing duplication (~$1.7M).
Reviewing most new hires with a focus on mission-critical needs and a full cost picture. Cancelled/paused searches and strengthened approval process tied to full cost analysis. Reduced discretionary spending
Targeting deferrable, non-essential, low-ROI spending with the goal of spending less than last year. Targeting permanent reductions (~$1.5M).
Keeping overtime at last year’s levels through schedule adjustments and coverage strategies. New strategy to align with prior-year levels (~$750K impact).
Institutional financial aid is above plan (~$1.4M), reflecting a deliberate increase in merit-based awards to improve competitiveness and student profile. The next phase is refining our model—strengthening discount-rate guardrails and aligning aid strategy with long-term net tuition sustainability.
Regular check-ins to make timely decisions and lock in progress.
Creation of a Presidential Budget Advisory Group within Western Rising – Commitment 1, including shared governance representation.
Ongoing engagement to advance sustainable solutions.
Reserves and Financial Health
Where we are:
Current unrestricted funds are projected to decline to approximately $7.3M (~19 days of coverage) without additional mitigation.
Why this matters:
This is below the 30-day benchmark and reinforces the need for disciplined action. Below, under Additional Resources, is the plan approved by the Board of Regents in March 2026.
Our plan:
- Reduce reliance on reserves in FY26–FY27
- Execute the multi-year deficit reduction plan
- Establish clear reserve rebuild targets with Board visibility
Reserves are not a strategy. They are the buffer that protects students and operations while we implement structural solutions.
Workbook Review: Where to Start
You do not need to read every tab to understand the story. If you look at just these two, you’ll see the full arc:
Last year’s outcome and the impact of one-time support.
The current mid-year forecast (conservative, pre-mitigation). Key lines: Revenue, Full-time salary, Fringe, Institutional aid, Use of reserves.
