It's been a tumultuous year for the University of New Orleans. About a year ago, the university said it would take steps to eliminate a $15 million deficit brought on by decades of low enrollment and other issues. Since then, the university slashed administrative costs. There have been layoffs, furloughs, and the closing of Milberg Hall, which needs significant repairs.
Now, citing the budget deficit, state lawmakers are advancing legislation that would transfer UNO back into the Louisiana State University system, reversing a move from 2011 that put the school under the umbrella of the University of Louisiana system.
Louisiana Considered host Bob Pavlovich spoke with UNO President Kathy Johnson about the budget crisis.
This interview has been edited for length and clarity.
Bob Pavlovich: Kathy, thank you for joining us.
Kathy Johnson: It's my pleasure, Bob. Thank you.
Pavlovich: So where does UNO's deficit stand?
Johnson: Yeah, so we've been working really hard through all of the measures that you described. Actually, I'm happy to share that at the beginning of this month, in early May, we stopped furloughing a sizable proportion of our employees because we were no longer as concerned about making it to the end of the year.
So that's certainly a positive. We've been working every way that one can imagine to reduce costs, especially administrative costs. We gave deans two colleges to lead rather than one. So each dean is now in the position of leading two colleges, and that actually has been wonderful in terms of creating opportunities for collaboration around our degree programs. It's also been great for seeding collaboration in the area of research.
The other thing that I'm happy to share is that we are in the process of constructing our budget for FY26. We will have a balanced budget on July 1. We aligned our budget to match the revenues we took in this past fiscal year. So it's a rather conservative estimate of revenue. And on July 1, we can hopefully breathe a sigh of relief that the structural deficit is behind us. We still have some debt that we're working on.
And another happy outcome that has occurred because we have lost some employees, is that we have been hiring students. In fact, I just passed about seven of them on my way over here that have just been hired very recently. They're helping us, frankly, to fill in some of the gaps that have been left as staff departed. But they're also helping to pay for school. And that is a really wonderful way of kind of configuring retention into our recovery plan as well. Giving students jobs and letting them work on campus helps them have the support that they need to be students first while they work toward their degree goals.
Pavlovich: There has been seemingly a discrepancy between UNO saying $15 million at the beginning, and then the Board of Regents saying earlier this year, $30 million. Which is it?
Johnson: Yeah, that's a great question. And obviously this is a very dynamic, complex situation that's changing constantly. My suspicion is that because the Board of Regents report was looking historically, at past reports that we had submitted, there was a bit of a lag there. At the beginning of this current fiscal year, that's when I recommitted myself to ensuring that we would be taking our budget down.
It'll be right at about $85 million, beginning in the upcoming fiscal year. So about half of that $30 million is the structural deficit that, honestly, I've been working every day on. Regardless of the future, I know that there's lots of questions about possible structural changes. I'm trying to just keep my focus on my students, my mission, and making sure that I'm doing everything I can to work with my team to make sure we're living within our means.
Pavlovich: What does this mean for staff and faculty? Will furloughs end on June 30?
Johnson: Yes. Furloughs will end for everyone on June 30. Faculty have not been furloughed. They have a different type of appointment. They're not working in the summer, unless they're teaching, of course. But for all of our staff, their pay schedules will go back to what it normally would've been, beginning on July 1.
Pavlovich: And what about the hiring freeze, the spending freeze?
Johnson: We're keeping those in place, frankly. We now have a hiring freeze that has come through the governor's executive order. And lots of institutions aligned with the executive branch, including universities, are freezing hiring except in areas that are absolutely critical. So, of course, we have to continue to hire in the police area, for example. We have to hire financial aid counselors if a position becomes vacant. But we're trying to be very cautious and judicious about only hiring those positions that are absolutely critical to our student success.
Pavlovich: There's been some discussion about ending the Master of Fine Arts and Visual Arts. Are other program cuts being explored?
Johnson: You know, we're utilizing a list that all universities have that's put together by the Board of Regents. It's based on the number of degrees we produce each year. And if a program falls below a certain threshold, they're put on what's called the low-completer list.
And so the MFA has been on the low-completer list for quite some time. We actually have given them a bit more time because we learned that not all of the faculty had been involved in helping to generate a program-improvement plan. We just did receive a revised plan recently, and we're in the process of reviewing that.
Pavlovich: Earlier this year, the Board of Regents recommended UNO moving back to the LSU system, which it was a part of. If the plan moves forward, what will that mean for UNO.
Johnson: You know, it's really too soon for me to say. I have long admired LSU, I really think that the bill just needs to wind its way through the process, and once we know what the verdict is, then we will work as hard as we can to make sure that the transition is seamless. I will say, in talking about this with leaders in the community, with our faculty, I think it helps that we were part of the LSU system from our founding until 2011.
So it's not something that's entirely unfamiliar, it's a return back to something that's known. By many people who have been here for a while. I'm just grateful that the state is recognizing the incredibly important role that the University of New Orleans plays in our region and for the state, and that there's a deep commitment to ensure that we can continue to live our mission and provide support to our students.
Pavlovich: Is one better than the other?
Johnson: I would never say that. No, I think that they're both great. They're different in many respects, but I think Louisiana is lucky to have the systems that it does.
Pavlovich: For that transferal proposal, the bill was recently amended to say that the transfer won't be completed unless lawmakers allocate the money LSU estimates it will cost, which is more than $80 million over the next five years. Does that make the change far less certain?
Johnson: You know, I really can't comment on that, Bob. I have not been part of the conversations. I've been following the bill just like everyone else has. The role that I have been playing is providing the information that's been requested for an audit of our finances.
Pavlovich: What have you learned through this budget crisis?
Johnson: On the positive side, I think it's been a wonderful opportunity for me to learn history and learn the stories of so many incredible people in our community that have been touched by this university. It's hard for me to enter a room where someone hasn't either graduated from UNO themselves or is related to someone who did. It has deepened my knowledge and understanding of the historical importance of having this university in southeastern Louisiana. I also, quite honestly, have learned a lot about leading through challenge and adversity.
I've done certain things in my past that helped prepare me for this. But I've never grappled with the depth of needs that needed attention very quickly after I transitioned. So learning to prioritize, learning to quickly build a team on the fly, fix systems, fix policies, while at the same time reducing budget.
Those are things that lots of leaders tackle at various points in their career. But for my leadership team, we were dealing with a lot of things all at once. So hopefully that's made us stronger. But again, I never fail to be inspired by the students that we serve and that I've taught. It has deepened my appreciation and my passion and my gratitude for having the job that I do.
Pavlovich: Enrollment has ticked up this semester. Does this look like something that can be sustained?
Johnson: Enrollment did tick up this past fall. So the year that we've just put behind us was a pretty good year, especially for beginning students and transfers.
We need to keep that up. We also need to do, I think, a much better job of retaining the students that we do admit. So that's certainly our goal. We are trying to position our people, our offices, and our systems to really be squarely focused on retention. I think we talked the last time about some partnerships that we have nationally that are helping us in this space.
Pavlovich: There were some issues with the collection of tuition and fees from students. Has that been rectified?
Johnson: You know, it's largely been rectified. We are using a new system that undergirds everything that we do in the student services area, including billing and dispersing financial aid. Grades are provided through this new system and we're among the first institutions to have used this new system.
So there isn't already a community of practitioners out there that have forged a trail and have lots of documentation to share. I will be the first to admit this has been a rough year trying to make those things work. We have put processes and policies in place to ensure that students can't register with a hold on their account because they haven't paid. We're very eager to work with students on payment plans. As I said, putting students to work on campus is part of that strategy. But yes, I think we fixed the problem that you alluded to of students not being charged or receiving their aid in a timely manner.
Pavlovich: What do you say to students and faculty about the challenges that everyone has faced, including facility issues that have been brought on by deferred maintenance?
Johnson: Yes, so I'm very grateful to the state of Louisiana for elevating the importance of attention to deferred maintenance really across all of higher education.
I think the focus initially was on the two-year sector, but beginning in the previous legislative cycle, there were some dollars made available for the four-year sector. And we are very grateful for those dollars. The other thing that I will point out, and this goes back to the comment I made earlier about constructing a budget, right now we are ensuring that the fees that are paid by students that are intended to go toward maintenance and helping with our facilities. Things break all the time in New Orleans, I'm learning. It's partly the climate. But anyway, we need to ensure that those funds remain dedicated for that purpose and we squirrel them away and we don't use them for other purposes.
That has not always been the case in the past. But as we build this budget, they're right there at the heart of that budget. And so I am very confident that going forward we will be able to maintain the facilities that we have. The other thing, as you mentioned, we've been trying to really contract our physical footprint a little bit to make sure that we're not spending a lot of money, heating and cooling and repairing buildings that are not absolutely essential for our use.
Pavlovich: What's ahead?
Johnson: You know, I am so excited about our strategic plan, which we developed in the first months after I got here. I've had to table a lot of the things on that plan because there have been pressing needs that demanded my attention and the attention of members of my team.
We are very excited to make sure that we are the partner of choice in this region. We want the University of New Orleans to be partnering with industry. We want to be partnering with nonprofits. We want our students to be all over New Orleans as part of their educational experience. I'm also very excited about the activity at the beach, which is our research and technology park. We have close to a full house at the beach right now. We have every single one of those tenants wanting to be here, either because of the role that our students can play as interns or in helping with research projects. Or alternatively, many of them want to do research with our faculty collaborators.
So those are priorities that we are really focusing on now as well. We do have some new programs coming online. I'm very excited about our new neuroscience program, which launches this fall. It will be the only undergraduate neuroscience program offered at a public university in this whole area. And that's a really great pathway to medical school, but it also leads to some really important jobs that are being prioritized in this region right now.
Pavlovich: It must be a bit of a relief to be able to get back to the things that you wanted to do.
Johnson: It absolutely is. It's been frustrating at certain points because I am just very eager to get going. I have a long list of things that I thought I would be doing in this past year, and while we've tackled many of them, as I said, there's been a pressing need to attend to the budget and deal with some of these system and policy issues.
Pavlovich: Kathy Johnson, president of the University of New Orleans, thank you for your time today.
Johnson: Always a pleasure, Bob. Thank you.
