Dear Colleagues, 

I want to share an update on the university’s finances and operating budget. We continue to face significant financial headwinds, and as I shared last month, these challenges have been exacerbated by falling short of our overall enrollment projections at Main Campus by approximately 700 students. Despite record-breaking first-year undergraduate enrollment this fall, our total enrollment in the U.S. fell below 30,000 for the first time since fall 2000. 

Current budget status 
Before the start of fiscal year 2026, we asked units and divisions to develop plans to decrease annual compensation spend. These reductions were difficult, but necessary, and together we reduced the budget deficit from $60 million to $27 million. As I shared in October, however, the lower-than-projected overall enrollment resulted in an incremental $10 million loss in projected revenue, bringing the total budget deficit for fiscal year 2026 to $37 million. This also comes at a time when the state appropriation, which was finally approved last week, has now been held flat for seven straight years.  

Temple has spent several years operating with a structural budget deficit. Over the past three fiscal years, the university used approximately $100 million of reserves to cover budgeted operating deficits. As I wrote to you in July, we expected to close fiscal year 2025 with a $27 million deficit; however, in September the university received a one-time tax credit reimbursement of $74.2 million for avoiding furloughs and layoffs during the pandemic. These credits reimbursed payroll taxes that were paid during the pandemic. 

While this makes the results of our 2025 financial statements appear favorable, this one-time payment does not address the structural budget deficit caused by the persistent gap between recurring revenue and expenses. As my budget message from June noted, there are no easy solutions to our financial challenges, and we will have to make some difficult but necessary decisions over the next few fiscal years. 

This week, I met with the deans and cabinet to discuss the steps we are taking as we work together to find solutions that will ensure Temple remains on a financially sustainable path moving forward. In looking toward the future, our multiyear projections make it clear that inaction is not an option. We will need to continue to reduce expenses and exercise financial discipline, while identifying opportunities for strategic investments that will increase revenue. While we anticipate that positions may be eliminated, we are committed to minimizing this as much as possible.  

Strategic investments 
In particular, it is crucial that we identify new revenue opportunities for Temple. Specifically, Interim Provost David Boardman is leading two task forces, one focused on online education and another to grow undergraduate transfer enrollment, which we believe can be key in allowing the university to grow in areas where it has underperformed in recent years. 

The one-time tax credit also may provide us with an opportunity to implement strategies that will allow us to make meaningful changes that will better optimize the budget and improve our financial projections moving forward. 

Capital funding 
I have heard questions related to how, given our structural deficit, the university is able to proceed with capital investments, such as our purchase and renovation of Terra Hall. Over time we will significantly reduce annual operating expenses by owning, rather than leasing, the home of our Center City campus. In addition, the vast majority of the Terra Hall renovation is being funded by the Commonwealth, with allocations specifically earmarked for capital projects.  

I believe that our investment in and activation of Terra Hall will be a signature accomplishment for the university, ultimately helping to grow enrollment and revenue all while strengthening Temple’s role and reputation as a leading anchor institution in the city. It will also provide new academic opportunities for students within the Tyler School of Art and Architecture; the Boyer College of Music and Dance; and the School of Theater, Film and Media Arts.  

New budget model 
We continue to work through the design of a new budget model to replace RCM. As you may have seen, we hosted five workshops for budget officers, faculty, department chairs, deans and administrators from across the university over the last several weeks, and I am grateful to everyone who participated in this important process. 

Input from these sessions has been shared with the Budget Model Task Force, comprised of faculty and administrators, which will present its final recommendations in the coming weeks. We remain on schedule to have a new budget model initiated beginning on July 1, 2026, and fully implemented over the next several years.    

While our current financial situation is challenging, I am confident that we are pursuing the necessary steps to achieve a stronger, more robust financial future for Temple. I thank you all for your continued patience and commitment, and I will continue to keep your apprised of our financial situation moving forward. 

Sincerely, 

John Fry 
President