The economic impact of COVID-19 has OSU down $170 million

Artur Pinheiro da Silva, News Contributor

Editor’s Note: This article is a part of the 2020 OSU Back-to-School Issue. The Baro has put together this issue to inform Oregon State University’s incoming class, as well as returning students about the impacts COVID-19 has had on the university and what to expect this fall.

In the beginning of the pandemic, many projections were already claiming that an economic downfall was imminent. Similar to other institutions, Oregon State University is now facing a financial crisis for the 2020 school year. 

Nationwide, the current COVID-19 pandemic is causing the economy to dwindle substantially in a matter of months. According to the World Bank Organization, this is “the deepest global recession in decades.” 

This recession is attributed to the loss of jobs as well as the lack of in-person activities such as dining, sports events and shopping. Essentially, the COVID-19 pandemic has affected every area of the average citizen’s life.

“[This] is the most difficult thing I have ever seen in my time at the university,” said Sherman Bloomer, associate vice president of Budget and Resource Planning at OSU, recalling just how overwhelming it has been to deal with the current COVID-19 pandemic. 

Bloomer stated that the projections for potential shortages started back in March, and were separated into three categories: education and general funds, (which include state and tuition funds), self-support funds (like Housing and Dining) and restricted funds (like Federal grants for research). For education and general funds, the revenue loss estimated in May was approximately $49 million, and the total revenue loss between all categories was $170 million.

Despite the large loss, Bloomer noted that current projections are within his and his team’s projections, and are not the worst-case scenario. Units across campus have been working to manage their budgets within the current projections.

“The university has tried to make decisions that avoid damage to programs or units that would take many years to fix,” Bloomer reassured.” The pandemic is a temporary situation and we do expect that in a year or two, this will look way better since OSU’s programs and services remain strong.”

To deal with the $170 million revenue loss, Heidi Sann, the associate vice president for Finance and Controller, stated that they “are managing the gaps through a variety of workforce strategies including delayed hiring, a salary reduction program, reduced services and supplies spending and utilization of reserves.” 

Sann, alongside her finance team, oversees business operations, cash management, student billings, as well as ensuring that business operations are done in a strategic and innovative manner.

The areas who were hit the hardest were self-support services , such as the housing and dining services, and  athletics, who rely on in-person activities to generate capital. 

Sann ensures that these areas are the ones receiving the most attention, stating, “our work focuses on the units that were most dramatically impacted by reduced revenues due to the pandemic,” and reckons that the OSU community has risen with wit towards these unprecedented conditions.

One of the main concerns for the current budget and finance teams is the uncertainty that remains to build qualms, not only for OSU, but for virtually every university around the United States. This uncertainty was, and still is, one of the main reasons projection and resource management teams are having a tough time through the crisis.

“It is cliché to call this pandemic unprecedented, but it literally is,” said Nicole Dolan, director of budget development at OSU. “We have struggled with the lack of history to make comparisons to, anticipating how students and faculty will react, and knowing how we will be affected by broader economic trends.” 

However, Dolan asserts that OSU’s top priority remains the safety of students and university employees, and that to provide this safety, it is impossible to keep operations as active and ordinary as they once were.

A propeller of the efforts against the COVID-19 crisis was OSU’s e-campus offerings, who brought new students from all over the United States and managed to maintain those who were already enrolled. 

 “OSU is well positioned to pull through this pandemic and return to a place of normalcy on sound financial footing,” Dolan said.“Other schools have struggled more with online learning and as a result will see greater challenges.”   

OSU’s finance and administration teams are hopeful that the congress will approve additional funds, and even after a tremendous endeavor on their part, the OSU community still needs these funds to help diminish their losses.

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