Missouri Western State University’s request for emergency support should serve as a wake-up call for those who view the institution’s financial condition as an overreaction or a temporary blip.
You can argue all you want with the response or whether the blame rests with the previous administration or the board. You can debate whether current President Matt Wilson has some sort of agenda that he brought with him from Ohio.
What you can’t deny, in six pages of sobering reading, is that demographic and economic trends conspired with a worldwide pandemic to put severe stress on universities across the country.
The University of Michigan announced losses of up to $1 billion, and Washington University in St. Louis furloughed 1,300 employees. In Illinois, MacMurray College closed, and the chancellor of the Vermont State College system resigned after a proposal to close several campuses.
It could get worse. The American Council on Education forecasts a 15% decrease in fall enrollment, and an article in Forbes estimates that up to 1,000 U.S. universities face extinction.
It’s hard to believe that a couple of years ago, Missouri Western spent $378,000 on 32 Steinway pianos. Those days appear to be over. In 2019, Western restated its budget to reflect a projected $3.1 million loss. State withholdings are expected to result in a $2.6 million loss this year, with cash-on-hand expected to dwindle to 21 days by late July.
To put into perspective, Mosaic Life Care in 2018 was required to maintain 90 days of cash-on-hand. The hospital actually kept a 370-day supply, and the COVID-19 disruption still proved to pose a significant financial challenge.
Western heads into the storm with nothing close to that kind of cushion, just as state funding will be cut by $2.1 million and enrollment could drop as much as 20%. That was one reason for Western’s request for up to $7.5 million in assistance from the University Foundation to continue operations until painful budgetary measures put the university on a more sustainable path.
In a way, this plea for assistance reads like a bankruptcy filing, with the foundation playing the role of a lender that provides emergency financing and the board serving as a judge who approves the restructuring plan. It’s up to the administration to execute that plan.
The irony is that this public document came to light as part of a request for more information on Western’s financial plight. Coming from a prominent booster, this request contained an undercurrent of skepticism about the origins of and response to this financial crisis.
A dose of healthy skepticism never hurt anyone, but what Western provided does as much as anything to demonstrate that drastic steps are needed to save this university.