University of New Orleans Faces Budget Deficit

Categories: College University AthleticsCollege/University NewsEducation

The University of New Orleans campus facing financial challenges.

News Summary

The University of New Orleans is confronting a severe budget deficit of at least $10 million for the upcoming fiscal year. The situation has prompted the administration to implement staff furloughs and cuts across various budgets, especially within the struggling athletic department. Enrollment numbers have significantly declined since Hurricane Katrina, compounding the financial challenges. The university is also planning a spending freeze, restructuring administration, and potentially laying off faculty as part of its strategy to address the fiscal crisis.

New Orleans – The University of New Orleans (UNO) is confronting a budget deficit of at least $10 million for the fiscal year 2024. To tackle this financial crisis, the university has decided to implement staff furloughs and make cuts to various budgets.

A recent audit has spotlighted a $4.62 million deficit in UNO’s athletic department, showcasing a mismatch between expenses and revenues. The department reportedly accumulated total expenses of $8.8 million against revenues of only $4.2 million. Dependency on student fees and institutional support plays a crucial role in sustaining the athletic programs, which span across 14 sports as part of the Southland Conference.

In addition to the athletic department’s struggles, a separate audit has uncovered significant deficiencies in maintaining effective internal auditing functions and complying with financial reporting standards. These shortcomings are representative of a deeper financial malaise facing not just UNO, but also other public universities in Louisiana, including LSU and Louisiana Tech, which are also grappling with substantial financial shortfalls.

The current budget crisis at UNO could lead to heightened taxpayer funding needs combined with mounting financial pressures on the public. This may ultimately result in reduced programs, increased tuition fees, and salary cuts for staff. The university has seen total student enrollment drop to 6,488 for the Fall 2024 semester, a stark decrease from around 17,000 before Hurricane Katrina in 2005.

President Kathy Johnson has indicated that tuition hikes have been necessary due to diminishing state funding. These financial challenges are partly the result of two decades of declining enrollment, exacerbated by the aftermath of Hurricane Katrina.

In an effort to mitigate the budget shortfall, UNO’s administration plans to slash $2.2 million from administrative expenses. Furlough measures will affect most employees, mandating unpaid time off for staff earning more than $30,000 annually, which is anticipated to yield savings of roughly $1.7 million.

Plans for addressing the deficit also include a spending freeze, restructuring to minimize administrative positions, and a review of potential layoffs. However, the furlough implications will not extend to tenured faculty, part-time employees, nor those in fully grant-funded roles.

As the budget constraints tighten, there is potential for significant reduction in faculty positions, which could include layoffs. Despite these challenges, UNO’s administration remains focused on maintaining its status as an urban research university with an R2 designation, indicating high research activity.

Looking towards the future, the university has established a long-term strategic initiative, titled UNO 2030. This plan aims at increasing student enrollment, improving operational efficiencies, and identifying new funding sources. In efforts to boost external research funding, President Johnson is considering engaging a lobbyist to secure additional federal support.

Current challenges in increasing enrollment may pose further complications in averting additional cuts and reaching long-term financial stability. Critiques have risen regarding prior administrative choices, particularly surrounding a rejected $300 fee increase envisioned to fund a football team.

As the University of New Orleans grapples with these financial realities, stakeholders within the university community remain hopeful for strategies that will lead to renewed growth and sustainability.