Yesterday College Provost Barry Scherr released the Fiscal Year 2004 budget, which will be presented to the Board of Trustees this coming spring. The budget largely confirmed announcements about cuts and changes made during Fall term.
Many of the most controversial cuts that will go before the Trustees were announced in the fall and have not been dropped -- including the consolidation of Sanborn and Sherman Libraries and reductions in course offerings. Others met with strong resistance and were taken out of the final budget -- including staff layoffs and the elimination of the swim team.
Scherr and Vice President of Finance Adam Keller were hopeful that no more cuts would be made for 2004. "Barring some kind of disaster we won't make any more cuts," said Scherr.
They both said that it was too early to predict how the FY 2005 budget would be.
"Things are going to stay tight for the next two to three years," Scherr said.
Contrary to what the administration had announced in the fall, the College will not lay off 30 staff members and may in fact avoid layoffs all together. The College has already been able to eliminate 50 jobs -- though attrition or reorganization -- without laying anyone off.
"I can't absolutely promise there won't be any layoffs," Scherr said, in spite of the 50 eliminated positions.
Scherr estimated that at present there are another 15 positions that need to be eliminated. He emphasized, however, that every effort would be made to accomplish this by reorganization or by eliminating positions that had been approved but not yet filled.
"In almost all cases that involves some sort of reorganization because the idea is not that the same amount of work will be done by a small number of people, the idea is that they do things differently," Scherr said.
While angry student and alumni voices were enough to save the swim team, both Sanborn and Sherman Libraries will be absorbed into Baker-Berry Library despite petitions and protests. Cook Mathematics Library will be shut down completely.
College President James Wright and Scherr had already allocated $250,000 to prevent reductions in the collections and academic computing.
Additionally, the division of arts and sciences will reduce offerings by about 22 courses, about half of which will come from the humanities division. Scherr stressed, however, that there are over 1,500 courses offered every year at Dartmouth, and only a small fraction would be cut.
Individual departments will be able to decide which course offerings they will remove from their curriculum. Departments do not need to necessarily eliminate a course completely, but can accomplish the same budget reduction by offering a course in one less section or, for courses offered in multiple quarters, in one less quarter.
Research computing -- a staff of six that helps faculty and students with longer research projects -- will also no longer be offered free of charge to its heaviest users. Faculty who use research computing consistently will have to pay a fee to use it, hopefully something they will be able to obtain through grant money. Small time users, however, will still be allowed to use it free of charge.
Student employment opportunities will also be cut by about five percent this year. Scherr said that every student who needs a job will still be able to get one, though perhaps not with his or her first choice of employer.
The Tucker Foundation will also see a cutback in its budget. According to Keller, most of the budget tightening in the Tucker Foundation will be felt by administrators rather than students, but there would be a cut back of about five percent of funds available for student-run projects.
Construction costs for new buildings are independent of the College's operating budget, so most new construction will be able to continue pending independent fundraising. Whether or not this funding can be attained in a bear market remains to be seen.
As promised, need-blind admissions, tenure-track faculty positions, and faculty compensation were kept "off the table," Scherr said, and will escape the budget cutbacks unscathed.
Scherr said that the recent decision to discontinue the planned Korean studies and language courses was a "separate issue" and did not have anything to do with the new budget.
While Scherr's release had some positive news for those who have felt personally affected by the budget, the hard truth is that the endowment is down nearly half of a billion dollars since its high point just over a year and half ago.
Since the College relies on the appreciation of the endowment for about 37 percent of its operating budget, more than a little belt-tightening was inevitable.
Some of Dartmouth's peer schools, including Columbia University, have managed to avoid the economic slump through conservative investments and are still receiving returns on their endowments.
Though Dartmouth's investments have not been quite so conservative -- the endowment sprung up 40 percent just two years ago -- the endowment is still performing well above the market.According to Scherr, the College is still on "strong financial ground" and that its performance is one of the top 10 in the country.
Dartmouth's endowment stagnated in 2001 and dropped 5.7 percent in 2002, as compared with a six percent drop in 2002 and a 3.6 percent drop in 2001 for national universities on average.
There the College has few options other than cutting the budget. A moderate hike in tuition would not have a significant effect and would only place a greater burden on students. According to Scherr, after financial aid is factored in, for every one-dollar hike in tuition, the college receives about 57 cents.
The College's endowment is made up of over 4,900 individual funds, about 23 percent of which is reserved for the various professional schools. Of the remainder, 17 percent is restricted for financial aid and an additional 40 percent is designated for certain expenses.
Most of the endowment is made up of large gifts, some as large as $50 million, and the principal of these gifts is never touched. "We will never dip into the original gift, we can only work off the appreciation," said Keller.
According to Keller, the endowment must not only not decrease, but it must increase at a rate of four to five percent per year for the College to maintain its operating budget.
Even though the large student protests that marked the Fall term could not stop the stagnating economy, one of its end results -- the new student budget advisory committee -- may help to ease tensions between administrators and the student body and encourage Dartmouth students to take a active role in how their school is run.
Scherr hoped that for fiscal year 2005 student input would enter into the budget process earlier, helping to avoid clashes like the ones the College experienced Fall term.
