The Board of Trustees approved a balanced budget on Oct. 18 that was approximately $2.1 million less than the preliminary budget created this past May. The need to restructure the budget came from an unexpected drop in income for the college. Noel-Levitz, the consulting firm the college hired to predict student enrollment for the 2013-2014 academic year, said the college should expect 52 more full time equivalent (FTE) students than they ended up receiving. The loss in net-tuition, combined with less revenue from housing and dining, forced the senior staff to restructure the budget.
The senior staff continually met to find ways to cut spending throughout the summer and up until the first round of approvals by the Budget Committee on Sept. 30. Next, the Executive Committee reviewed and approved the budget on Oct. 8.
In order to create a complete budget Vice President for Finance Tom Phizacklea and the senior staff were constantly making changes as new costs and extra revenue surfaced. There were surprises along the way, such as a major increase in financial aid.
“The financial aid budget increased by $311,000 [from] the preliminary budget,” Phizacklea said. “That’s the difference between what we thought we were going to give out and how much we ended up giving out. We had to pay more in financial aid to get fewer students.”
Various cuts were made across the board. One of the bigger cost-saving changes was a decrease in the salary budget by about $400,000. According to Phizacklea, most of this money came from staff positions that are frozen or not being refilled. He said that this did not come from a decrease in faculty and staff salaries.
Senior staff were also able to decrease utilities expenses by cutting $50,000 from its preliminary budget. Bon Appetit also agreed to lower their costs by $50,000. In addition, the senior staff were anticipating a $200,000 increase to the already $1 million budget for facilities and infrastructure, a fund that helps with improvements around campus. However, they ultimately decided not to increase the fund.
Perhaps the most drastic cut was eliminating the contingency fund. This money is reserved in case of unexpected costs, like last year when the college had to hire a company to clean up wreckage from Hurricane Sandy. The preliminary budget had set aside $614,360 for the contingency, but due to budgetary restraints, Phizacklea saw no other option but to cut the budget entirely.
“There is absolutely no fat in our budget,” Phizacklea said at an open faculty meeting.
If there is a situation in which Goucher needs to fund overtime or clean up due to an unforeseen situation, like a snowstorm or hurricane, the senior staff will have to somehow redistribute funds to find the money.
“It worries me,” Phizacklea said. “An operating deficit is something you don’t want, it’s something our rating agencies pay attention to. … The Board is fully aware of the issue and they agree it’s something we should do.”
This year also brought on new means of spending Goucher’s restricted fund of $300,000. Half of that budget is dedicated to the presidential search. This money pays for the firm Goucher hired to search for a new president and goes towards flying applicants to Goucher and paying for their expenses during the visit.
The balancing of the budget also came down to small odds-and-ends. By restricting the president’s letters to the Goucher community to electronic only, it saves the college over $6,000 in printing and mailing costs. Similarly, the Quarterly will have one issue that is solely online. The absence of printing and mailing fees will save the college nearly $45,000.
“It won’t make a lot of people happy,” Phizacklea explained, “but it saves a lot of money.”
In addition, the college will take $7,000 from the green fund to offset some of the hefty cost from the recycling and trash company Goucher employs. Phizacklea explained that the only way to afford the trash company was to pull money from the green fund.
The college made up some of its losses through graduate school and summer programs, such as sports and dance camps. But the majority of the changes came from departments tightening their belts and making major cuts like student affairs, who cut a total of $49,000 from their budget.
“Nobody is happy to do this. Nobody wants to lose money in [his or her] budget,” Phizacklea said. “But when things are tough, you lobby for the college. When things are great, you lobby for your own departments and divisions. You’ve got to do what’s best for the college. We were trying to hold the academic programs as harmless as possible and student services as harmless as possible.”
In an open faculty meeting on Wednesday, Nov. 6, Phizacklea presented additional costs for the 2014-2015 academic year. Not only will the college face a $2.4 million deficit, but it will also have to account for President Sanford Ungar’s sabbatical and funding the Prison Education Partnership, whose three-year grant ends this academic year.
Once Phizacklea presented the budget to the open meeting, Provost Roy explained how the budgetary issues will effect the faculty.
Roy explained to the group, and in a private interview, that the faculty would not feel most of these changes.
“With one or two very minor exceptions, the academic departments did not have any budget cuts. They have had in the past, but they didn’t have any cuts this year,” Roy said.
But according to Roy’s presentation, the faculty will feel some department and course changes in the next academic year. The Board of Trustees informed Roy that he will have to decrease the academic affairs budget by $1 million for next year.
Keeping the 10:1 student-to-faculty ratio deadline of Fall 2015 in mind, Roy explained that some of these budgetary cuts could be made possible by beginning to eliminate faculty members. By next fall, Roy expects that he will eliminate six half-time positions by changing them to a part-time basis. In addition, a full-time faculty member will move to half-time, and he plans to eliminate eight part-time positions. These changes will provide for $488.275 out of the $1 million goal.
In addition, the study abroad budget will go down $240,000 by creating a cap on the number of students who go abroad each semester and go on non-Goucher programs. Roy explained that seniors will get priority over juniors, and juniors over sophomores, when applying to go abroad for a semester. Roy also said that students may be limited on the amount of times they can go abroad. Since Goucher tends to lose revenue when students study abroad, the change in operations will secure a steady income for the college.
Other changes include $70,000 cut from the graduate program in education. But when all the budgetary changes come together, Roy falls short a mere $1,725.
The faculty’s reaction was mixed. Some stayed quiet and understood the changes; others challenged Phizacklea and Roy about their decision-making process. But one of the major issues the professors mentioned was the study abroad requirement. Two faculty members questioned how the requirement is benefiting the financial situation of the college. Two other professors expressed their concern that students will be disadvantaged by a priority-structure when spending a semester abroad.
Throughout the meeting, Roy explained that he appreciates the faculty’s feedback and suggestions on short-term and long-term budget savings.
“Departments have helped me to understand areas where they think they can reasonably reduce,” Roy explained. “Some departments have many different tracks through the major and [in] some tracks, hardly any students will go through [them]. If [the department] eliminates that track, they can eliminate one or two courses here and there.”
Roy also repeated the importance of not harming the quality of the academic programs.
“People have described to me in more detailed ways the importance of particular positions to their department – where a half time or part time faculty member brings something unique that none of them are able to offer. All of that is useful information as I think about where we are able to make cuts without harming academic programs,” Roy said.