The Moscow-Pullman Daily News’ editorial board rightly called the university’s reliance on tuition dollars a “monumental pyramid scheme.”
WSU President Elson Floyd and the local proponents of the Cougar School of Medicine argued that Eastern Washington needed the school for two reasons .. first so more kids could go to medical school. That was a bit specious since the existing UW program includes campuses in Spokane and nearby Idaho. The second issue was more compelling because the boosters argued the new med school would bring in lots of money … research dollars as well as donations from the donor community in Eastern Washington.
A year After Washington State University decided to spend hundreds of millions on a medical school for the sole purpose of competing with the UW Medical School, WSU is in financial trouble.
Now the new Cougar President, Kirk Schulz, is raising concerns about WSU’s financial situation in a letter posted to his website last month. While he did not mention the new school of medicine or the total size, he did direct his aim at decisions by WSU’s board of regents.
Schulz was especially critical that the university spends more than it takes in and relies too heavily on reserves. Meanwhile, WSU is either going to need huge state appropriations or a very large boost in donations to its endowment to support the new medical school. That spending has just started. WSU recently funneled nearly $132 million into capital projects, including the 42,000-square-foot Spokane Teaching Health Center,which is slated to open in August. $140 million has gone to new football facilities in an era where income from the Pac 12 is not up to what was expected.
This medical school money should be the bigger concern. Medical care systems in this state are becoming increasingly competitive, We see Kaiser entering the state in a big way while the UW and Providence consolidate and build out their health care systems .. all awaiting the entry of the huge national chains that are buying out local healthcare systems. The state contribution to the few hundred millions spent so far were justified to the Washington legislature as an investment that would pay off in research dollars and donations coming to the new school. That is hard to believe. The idea that a medical school can exist (or make a profit) based on a few faculty hired to teach courses and volunteer doctors from the community is naive. Just the capital to build a new research hospital and accumulate the endowment to pay a large number of competitive research faculty is likely over a billion dollars. This money is needed at a time where healthcare budgets everywhere are under scrutiny and the budget for the National Institutes of Health has shrunk. Tuition is not going to fill the bill either. The Moscow-Pullman Daily News’ editorial board rightly called the university’s reliance on tuition dollars a “monumental pyramid scheme.”
from the Spokesman Review: “Schulz said the school hasn’t identified funding sources for many of those projects, and some proposals were approved by the regents “without a robust financial analysis.”
“We started out this budget cycle with a very low amount of debt,” said WSU spokesman Rob Strenge. “And we made a very conscious decision to leverage the university to get the growth that we wanted to see for all our students.”
“WSU’s chief financial officer, Joan King, said the university has expanded to catch up with growing enrollment in the years since the recession. The university has gained more than 2,300 students since 2008 – a spike of 10 percent – for a current enrollment of about 25,700.
“We lost 50 percent of our state funding in a very short period of time, and at the same time we were bringing in a lot more students,” King said. “Now we’re in a different position to revise, review and develop our budget in a formalized way. Each president does things differently.”
Still, Schulz said in his letter, the university has been “spending down central reserves at a significant rate and will need to make some adjustments.” Specific figures weren’t immediately available.
Schulz said his letter wasn’t meant to criticize the regents or the presidents who came before him – the late Elson Floyd and interim president Daniel Bernardo. It’s about keeping people informed, he said.”
The other worry for WSU is that its professional athletic program is unsustainable. Multiple national studies have shown that no more than one or two of the big Division 1 sports programs even break even. The UW Huskies and the Cal Bears have both reported serious deficits. Schulz must know that. He comes to WSU as chairman of the NCAA’s board of governors. WSU’s operating deficit in athletics is $14 million .. an amount that does not begin to account for money spent by the rest of the campus to support the pro sports teams. The answer, as is typical for schools with big sport programs is to dun Cougar fans for more money to pay for coaching salaries, buyouts and debt service on $140 million in new football facilities. Fundraising efforts have fallen short, and the school hasn’t made as much as expected from its contract with the Pac-12 Networks. Bill Moos, WSU’s athletic director, rightly says that “It’s everybody’s problem, and we all need to focus on finding a solution.“We’re already next to the last in the Pac-12 in terms of expenditures,” he said.