In an interview with The Observer, Joel Klucking, CWU’s Chief Financial Officer, discussed plans for the university’s monetary future as well as how they are dealing with its complicated past. From the relatively new “Values-Based Budgeting” model of funding, to the school’s ongoing struggles with waning enrollment, Klucking laid out CWU’s plans for the financial future of the university.
Q&A edited for length and clarity.
Q: How have recent budget cuts affected the colleges and departments across campus?
A: I think that every, every single function on campus is affected by the lack of resources because of the enrollment plan. Historically, as a state agency, this is when we would give our employees a cost of living agreement, a cost of living adjustment, you know, 2 or 3% across the board raise. The legislature would fund it because they own the people, they own the buildings. In 2017 they stopped doing that, and they only funded half. So we had to come up with the other half of the cost of living adjustment through tuition increases. Well, that is very different for Central than it is for the University of Washington, that has half their population from out of state, and the tuition is significantly higher. For us, that 2 or 3% increase in tuition is not enough to cover the 50% [that was cut] and so what that’s done over time is created a significant budget gap for us. When we talk about Central having a structural deficit, it was created by that fund split.
Q: I have heard from a few sources that the school used to fund its colleges based on enrollment, meaning the more students a college had the more funding it got. The issue became that there was a competitive quality to it, wherein a professor might try to scout students from other programs to increase funding for their own. At a basic level, is this how the school used to operate? Is this how it still operates?
A: [It was] called RCM, Responsibility Center Management, 2018 to 2022. It was replaced by Values Based Budgeting. When we implemented RCM it was our last President’s big thing, and we did it for four years. When we assessed it after four years, I myself and the provost walked to every single academic department and got lots of feedback. There were themes, number one competition. Why in the world would one department try to steal a student away from another department, or create a gen-ed program that put a writing class in places where they hadn’t historically been? There are a lot of bad things that happened during that time. It wasn’t as bad as I think it’s been described but it was bad enough that we created something much better. So [RCM] could’ve been very good for the colleges, if they were growing and if they were growing faster than the other colleges, they would get a bigger chunk of revenue, right? But it doesn’t feel very good when you say you get all the money but we’re going to take off the overhead first. So me, the president, all of the accounting, human resources, we’re gonna pay for those first. And then [the faculty] get what’s left over? Well, they’re the faculty. They’re the reason that we’re all here. I mean, students are why we’re here, but the faculty are the next best reason that we’re here. And so that was just really a hard thing to say. Now, the idea, the theory of Responsibility Center Management, is that the pie grows and everybody does better. At a small school like this, that really wasn’t happening right away. So we switched to Values Based Budgeting. That’s why it starts with, let’s fund our faculty first, right? And then we get to staff, and then we get to goods and services.
Q: So what is “Values Based Budgeting” and how does that work?
A: So we have a budget model that we call Values Based Budgeting. The very first element of it is we need to make sure that we have the faculty that we need to teach the students that we’re expecting to be here, right? And we’ve shrunk over the last four years, and so we’re trying to calibrate the size of our faculty to the number of students that we have. The first layer is funding faculty. And then secondly, we need to also sort of calibrate the size of our staffing. This one’s a little bit more difficult because some of our staff positions, like advisors and financial aid counselors, are related to how many students we have. [But] the vast majority of them aren’t… The reality is that we only have a certain amount of revenue through both state funding and student tuition, to fund what we can fund. And so we’re trying to reduce the overall employment at the university to match the level of enrollment.
Q: Have there been budget cuts that resulted in staff being cut?
A: We haven’t laid any staff off. We haven’t made any people leave involuntarily […] We are trying to calibrate our employment on a replacement basis. So once somebody leaves or they retire, what we’re trying to do is look at the work that that person did. Can we do it differently? Can a work group come up with a different way of doing things that does not require replacing that position? [Through this] I want to say we’ve gone from about 1200 staff, down to about 1000 staff since 2019 so there’s definitely been a reduction.
Q: What role does enrollment play in determining the budgets for all the individual colleges?
A: Well right now we have an infrastructure that’s built for 11,000 students, but we only really have less than 9000 and so [we are figuring out] how can we do the work differently. How can we make different choices and try to do the least amount of harm to the student experience that we possibly can. And I feel like if you look at student to faculty ratios historically, over decades, we talk about having class size average of 20. I would feel like we’re doing harm if that goes up to 25 or 30, and all of a sudden we’re, we’re just becoming somebody that central traditionally hasn’t been […] so that’s [one of] the values. It’s very common for university foundations to go on a comprehensive campaign. So you hear about this from the University of Washington all the time, right? They do a $3 billion campaign, and they get their donors to invest in things that there’s not enough resources for, otherwise, student scholarships. We have really never done a full campaign, and that’s how that is, but [now] there are certainly plans for one.
Q: Do you think that the new financial programs are working?
A: I think that the new budget model that we have is much simpler, and it is attempting to make sure that we live within our means. So it’s adjusting our levels of employment and our levels of spending based on what we can afford. I think it’s going to serve us well in the future, even as we hopefully grow our enrollment. I think in that regard, it’s working. It is not popular because, I mean right now we’re trying to shrink, and shrinking is hard. Yeah, it means making better choices.
