How is a structural deficit different from an annual operating budget deficit that we would experience if we did not reduce spending to make up for state funding cuts and investment losses?
As the language suggests, the structural deficit relates to the existing financial issue that resulted from the failed quasi-endowment strategy, and that impacts the university’s financial strength. A current-year operating deficit relates to the difference between projected current-year revenues and current-year planned expenses. It is resolved or returned to a “balanced budget” through the university cutting expenses in the current year so that income is greater than or equal to revised authorized spending levels.
