Dear WashU Faculty and Staff,
As we prepare to begin the new academic year in the coming weeks, I want to share an important update regarding our university budget, including a final decision about the FY26 merit increase.
Over the past several months, members of the WashU administration have been working diligently to finalize the FY25 financials and plan ahead for FY26. While we are still in the process of closing the books on FY25, I can now report that thanks to prudent financial management and thoughtful work from individuals across the university, we anticipate ending the year with a break-even financial result. I’m grateful to everyone who contributed to reaching this point.
With that said, we have identified some structural budget challenges that WashU must address. Major academic and administrative units of the university have cost imbalances that need to be corrected. We are scrutinizing more closely than ever before the budgets of all units of the university. It is imperative that we take steps now to fix existing problems and adapt to the financial realities that have evolved over the past decade for institutions of higher education.
Compounding our internal budget challenges, there are also external pressures we are facing. Congress has now reached a resolution on the endowment excise tax, which will impact us directly, resulting in an additional cost of approximately $37 million per year. In addition, there is still significant uncertainty regarding federal research funding, which remains unresolved and could also greatly affect our bottom line. We remain actively engaged in Washington, advocating for support of the critical research enterprise at WashU and higher education institutions nationwide.
Given these financial realities and our commitment to stewarding resources responsibly, we’ve made the difficult decision that there will be no university-wide, across-the-board merit increase for the 2025–26 fiscal year. I know this is disappointing news. Please know it is not a reflection of your hard work and contributions, which I deeply value, but a necessary step as we prioritize long-term institutional stability and strategic investment in our core mission.
It’s important for our entire community to understand not just where we are, but where we’re going. To that end, I’ll be working with my Cabinet to prepare a webinar on the university’s budget that we expect to have available for viewing early in the fall semester. The session will provide an overview of the university’s finances and additional detail about the FY25 and FY26 budgets. In partnership with our academic leadership, I’ll also be encouraging our deans and department chairs to share budget information within their respective units to foster continued transparency and engagement.
Thank you again for everything you do to support WashU. It’s because of your dedication, resilience, and commitment to excellence that we continue to move forward, even – and especially – through challenging times. I look forward to the year ahead and to continuing our work together to strengthen this extraordinary institution.
Sincerely,
Andrew D. Martin
Chancellor