WVU made headway on finances but still has work to do, Gee tells lawmakers

E. Gordon Gee, president West Virginia University, told state lawmakers on Wednesday, Jan. 31, 2024, that the university's severe cuts helped make up a predicted $43 million budget shortfall. (Will Price | West Virginia Legislative Photography)

West Virginia University still has work to do to shore up their budget deficit tied to declining student enrollment and rising operating costs.

E. Gordon Gee, president of the university, told state lawmakers on Wednesday that eliminating hundreds of faculty and staff jobs, cutting 28 academic programs and reducing administrative overhead helped make up a predicted $43 million shortfall. There was also a 3% tuition hike.

“We have made difficult decisions. Change is never easy,” he said. “We have bent the arc of higher education for the better.”

The university gathered nationwide attention for its swift cuts last year across its Morgantown campus, particularly leaders’ decision to do away with the World Languages Department. Faculty passed a sweeping symbolic vote of no confidence in Gee amid the changes.

Finances are stable at the university, according to Paula Congelio, WVU’s vice president and chief financial.

She told lawmakers that they are working to address a $24 million shortfall. The 2025 fiscal-year budget remains unbalanced due to inflation and increased costs with the Public Employees Insurance Agency, or PEIA.

“We still haven’t balanced our demands for the 2025 budget, but we remain committed to doing so and to having a balanced budget,” Congelio said, adding that they will continue to review its academic offerings.

Previous PEIA rate hikes were also partly to blame for last year’s budget shortfall, according to university leaders. The insurance program, which provides coverage for the majority of WVU employees, will see another round of significant premium increases that take effect July 1.

The premium increase will cost WVU an additional $5 million annually.

“We do applaud the changes to PEIA, but we do need your support,” Gee said.

Marshall University leaders, who also presented their budget to lawmakers, expressed similar concerns about the PEIA increases as the university is tackling its own structural debt. The Huntington-based university eliminated 36 faculty positions and eight academic majors as part of its efforts, and leaders there are hoping to shave off $14 million in spending.

Both Marshall University President Brad Smith and Gee asked lawmakers to consider helping the universities cover the PEIA costs.

Additionally, Smith proposed that lawmakers meet with university presidents to work out a long-term plan for universities paying for PEIA.

“The increase to PEIA and [the state Board of Risk and Insurance Management] continue to create a challenging financial impact,” he said.

Marshall and WVU leaders added that they won’t have enough funds to cover Gov. Jim Justice’s proposed 5% pay raise for state employees.

At WVU, state appropriations of $156 million account for only 15% of the university’s budget. The university would need an additional $16 million for an average 5% pay raise, leaders said.

Leaders from both universities said they’ll continue to focus on student recruitment as they grappled with a nationwide decline in enrollment, which has impacted both universities’ budgets.

“We understand that our most critical need is enrollment,” Congelio said. “ We need to compete even more for resident and non-resident students because tuition is critical. ”

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