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The Dartmouth
May 23, 2024 | Latest Issue
The Dartmouth

College plans cuts to employee benefits

The College's top two financial officers yesterday presented academic department heads with a plan to avoid a projected budget deficit by cutting the benefits packages given to all College employees. Vice President and Treasurer Lyn Hutton and Provost John Strohbehn explained to the Committee of Chairs that the College's budget planners have balanced the budget for fiscal year 1994, but project a $1.3 million deficit in the following two years.

The College's Board of Trustees vehemently demands that Dartmouth's budget always remain balanced.

Strohbehn said budget planners had four options to avoid the projected deficit: across the board cuts; selective cuts to specific programs; cuts to emoployee salaries; and cuts to employee benefits.

Strohbehn said College programs had been reduced over the last four years to the point where cuts across the board or to specific areas would now damage valuable programs already hit hard by past cuts.

The benefits package area is the fastest growing part of the budget, he said, and is relatively expensive compared to the cost of employee benefits packages at Dartmouth's peer institutions.

Hutton explained the proposed cuts, which would focus on employee benefits and affect all employees. The cuts would cost more to those with higher wages, such as professors and administrators.

The six senior officers do budget planing asked the College's human resources department to find an optimal reduction in benefits that would help tackle the deficit. Cuts will target Dartflex, the College's flexible benefit program.

Next year the plan will reduce $700,000 in College support of the Dartflex dental plan, $190,000 in support of Dartflex disability protection, and $150,000 in support of a "sliding scale" which pays for a higher percentage of Dartflex programs for lower income employees. The College will target the upper end of the sliding scale, reducing College support of Dartflex from 70 percent to 60 percent for those making $60,000 or more.

Budget planners said the reductions will mean individual losses close to but not higher than $1,000 a year for the highest paid employees at Dartmouth.

"Each of us will react differently to this," Dean of Faculty Jim Wright said to the committee. He said benefit packages are not as important as salary in maintaining competitive faculty compensation.

Economics Professor Jack Menge, who heads the Committee of Chairs subcommittee on priorities, said it was a question of determining where cuts should be made. "The budget needs to be balanced. If we don't give it up here, then where?" he asked.

The budget planners must finalize their decision before the end of the summer, to allow employees time to choose benefit packages for 1995.