Washington and Lee University is expecting a deficit in its budget this school year and next, said Treasurer and Vice President for Finance and Administration Steve McAllister in an emailed statement to the Phi. Department heads are responsible for finding ways to close the gap.

McAllister said he asked department heads to reduce discretionary expenditures in their budget for the 2025-2026 school year by 10%. Discretionary spending refers to funds that are not tied to specific, mandatory programs or obligations.

The Human Resources department will also shrink its salary raise pool from 3% this year to 2.5% next year to reduce the deficit, according to McAllister’s statement and the Human Resources website. 

McAllister said the deficit comes “after three years in which endowment returns have fallen short of expectations.”

But department heads said they weren’t expecting the cuts.

“I think everybody was surprised because the market has been so good. What happened here?” said Chemistry and Biochemistry Department Head Matt Tuchler. “It just didn’t make sense to be coming right now.”

In fact, the S&P 500 just had its best two-year gain since 1998, according to CNBC. The trusted stock market index surged 24% in 2023 and 23% in 2024.

McAllister did not clarify how much the projected deficit is. But he said the 10% reduction in departments’ discretionary spending should allow the university to achieve a balanced budget by the 2026-2027 school year.

In the meantime, department heads are brainstorming what line items they can cut from their proposed budgets to “minimize impact on faculty and students” while still meeting McAllister’s request, said English Department Head Holly Pickett. For the English department, the main category of discretionary spending is entertainment — which includes celebrations for newly declared majors, graduation banquets for seniors and every study group in between.

“The goal with those events is to create community,” Pickett said. “We’ll still do that within our means. We’ll just have to tighten our belt a little bit.”

Pickett said no central English department programs or resources will be cut due to next year’s reduced budget.

Tuchler said the same for the chemistry department. But, he clarified, it all comes down to what departments label as mandatory and discretionary. In his department, for example, fixed costs “that can’t be touched” make up a majority of the budget: they fund lab equipment maintenance, chemicals for experiments, an American Chemical Society membership and more.

In the chemistry department’s approximately $100,000 budget, only about $30,000 is considered discretionary, Tuchler said. So he’s expecting a $3,000 cut, which is about 3% of the department’s total operating budget.

“If they would have cut across the board with non-discretionary funds, then we would have problems. But because it’s discretionary, and that’s a little bit softer, I think we’ll be okay,” Tuchler said.

But humanities departments have a different balance within their budgets. Of the romance language department’s current $22,500 budget, about $11,000 is considered discretionary, said Department Head Mohamed Kamara. He requested the same amount for next year’s budget, but he’s aware that the expected cuts could take $1,100 away from the discretionary pool. That’s about 5% of the department’s total operating budget.

“We can be asked to be frugal, of course,” Kamara said. “I think if everybody chips in, in one form or another, hopefully it will just be a short-term thing.”

Kamara said department events such as the annual Carnival celebration and weekly activities hosted by French, Spanish and Portuguese teaching assistants will be the most affected by budget cuts. They won’t disappear, but they may not be “to the grandeur and scale we would love,” he said.

Departments’ budgets for upcoming school years are always drafted in mid-March, then submitted to McAllister’s office and the Dean of the College’s office for approval. Department heads said they’ve seen other budget freezes in recent years, such as during the 2008 recession and COVID-19 pandemic. Even so, this budget process feels different than others, department heads said.

First, inflation is already making budgets feel tight, Kamara said. Normally, his department orders a traditional King Cake from New Orleans to give students a taste of French culture during the Carnival event. This year, he couldn’t afford the overnight shipping, and decided to order treats from a local bakery instead.

While cake is not the most critical university resource, Kamara joked, it is one small example of how authentic cultural exchange may be affected by budget cuts.

Also, the cuts are coming at a time of already high anxiety in higher education, department heads said. Professors can’t ignore the “horror stories” of universities and researchers navigating the Trump administration’s funding freezes, Tuchler said.

Tuchler said three faculty members in his department are currently conducting research that is funded by external grants. “The funding agencies are going to dry up, and then what do we do?” he asked.

Tuchler said most students likely won’t notice the budget cuts next school year, since they shouldn’t affect day-to-day operations. But, he said, it’s hard to know what budget cuts will mean for Washington and Lee until they take hold in the fall.

“I won’t know the full effect of this until we get in it, and all of a sudden I reach for something because it’s always been there, and it’s not there,” Tuchler said.