The College's budget has changed frequently over the past decade and mirrors the economic state of the country, with budget cuts affecting certain areas of the College more than others.
Following the 2008 recession, Dartmouth's budget has rebounded and is back to normal levels. During fiscal year 2011, the College's revenue increased $8.5 million to $968 million, according to IRS 990 forms released last week. The endowment also rose by $73 million during the same time period to $3.49 billion.
The revenue changes over the past few years reflect economic trends, with the biggest increases in fiscal year 2011, when inflation was highest, and returning to normal levels as the inflation rate decreased.
The revenue correlates closely with the number of employees. During the midst of the recession in 2009, while the number of faculty members increased slightly to 1,004 from 995, the non-faculty staff fell to 3,056 from 3,250. As the budget recovers, the College has begun to employ an even higher number of employees. From 2011 to 2012, faculty increased to 1,045 from 1,016 and staff has grown to 3,328 from 3,175.
Over the last 13 years, the number of College employees has increased at a higher rate than student growth. Between 2000 and 2012, the number of undergraduate students increased to 4,193 from 4,057, a growth of 3.4 percent. The number of arts and sciences tenure-track lines increased to 391 from 356, roughly 9.8 percent, from 1999 to 2012. In the same time period, the number of non-faculty staff has seen the biggest increase, to 3,328 from 2,408, or 38 percent.
Immediately after the onset of the nationwide financial crisis, Dartmouth saw a 23 percent drop, or $835 million, in its endowment, according to the finance report for the Faculty of Arts and Sciences.
As a result of the rising expenses and drop in the endowment, in 2009, the College projected future budget deficits of $54 million in fiscal year 2011, $96 million in 2012, $114 million in 2013 and $122 million in 2014 if drastic budgetary changes were not implemented.
The budget deficit prompted former College President Jim Yong Kim, along with then-provost Carol Folt and former executive vice president and chief financial officer Steven Kadish, to develop the Strategic Budget Reduction and Investment process to ensure long-term financial sustainability. The effort, led by Kim in his first year in office, aimed to cut $100 million from the projected $900 million budget.
Prior to the financial crisis, the College saw above-average endowment returns for four consecutive years. Fiscal year 2007 had a return of greater than 20 percent, fiscal years 2005 and 2006 experienced returns of nearly 15 percent and in 2004, returns approached 20 percent. Fiscal year 2003 had low returns, while fiscal years 2001 and 2002 both had negative returns.
Previous growth in college spending was not sustainable due to market volatility, and, as a result, the College reduced the amount of endowment funds used in operations each year. The percentage of endowment dollars as a part of annual revenue decreased to 19 percent in fiscal year 2011 from 24 percent in fiscal year 2010.
The budget gap was closed through extensive cuts in numerous areas, including financial aid. A total of $11.4 million was saved by reinstating loans for students whose families have yearly incomes of $75,000 or higher. Additionally, the aid growth rate was reduced, meaning that while overall financial aid spending continued to increase, it did so at a slower rate than in previous years. The Board of Trustees has since voted to raise the no-loan threshold to $100,000.
The reorganization and restructuring saved the College $15.6 million, and changes to administrative and programmatic support led to budget reductions of $29.7 million.
College employees are still feeling some of the negative effects of the budget cuts, said Earl Sweet, president of Service Employees International Union Local 560, which represents College service employees.
"We've lost a lot of positions in the past few years, and we need to get by now on a lot less than we used to," Sweet said. "I wouldn't say there's sufficient amount of workers, especially in the custodial staff because we now have less people and more buildings."
While the College was able to avoid layoffs, it saved $12.7 million through changes to benefits and compensation, as well as by eliminating vacant positions and offering early retirement to workers.
In total, the College cut 194 administrative and staff positions between 2009 and 2010, though no faculty positions were eliminated. One hundred and fifteen employees, who were offered nine months of pay, chose the early retirement option.
"They had hundreds of years of experience between all of the workers, and now that's all gone," Sweet said. "Those positions became vacant, but they never filled them so they don't even exist anymore."
Additionally, the College transformed many 12-month positions to nine-month positions, cutting the salaries of those employees by 25 percent, Sweet said.
Changes to employee insurance plans have necessitated that workers contribute more to their coverage, with the highest-earning employees suffering from the largest increases. Previously, Dartmouth had been ranked the second most generous institution in employee benefits. It is now at the median of Ivy League Plus institutions.
Sweet cited subcontracting as another grievance the Union has with the College. While he has been at the College for 32 years, only recently has it begun to subcontract out instead of hiring more workers.
