Trustees Approve Initial Plan to Close $100 Million Budget Gap
The Dartmouth Board of Trustees has approved an initial plan to close a projected, recurring annual budget gap of $100 million in fiscal year 2012 and beyond. The plan was presented by the College administration to the Board at its February meeting in Hanover.
Where the savings are coming from (chart by Corinne Arndt Girouard)
Through thoughtful and strategic actions, the administration identified ways to achieve approximately 95 percent of its targeted savings before any layoffs. The administration limited layoffs to 38 non-teaching positions; a comparable number of additional layoffs are expected to be required in April when the most intensive phase of the budget-reduction process is complete.
Approximately 60 percent of these layoffs involve professional and managerial employees. Measures taken by Dartmouth to avoid layoffs include offering voluntary retirement, reducing hours, eliminating unfilled positions, and freezing salaries.
President Jim Yong Kim and Budget Committee co-chairs Carol Folt, acting provost and dean of the Faculty of Arts and Sciences, and Steven Kadish, senior vice president, are donating 10 percent of their salaries. The donation will be split between the Dartmouth College Fund and a hardship fund that will assist those with financial difficulties not met through other programs such as layoff packages or the staff loan program.
The budget plan reinstates a loan requirement of approximately $2,500 to $5,500 a year for financial aid recipients from families with incomes of $75,000 a year or more. The change will begin in fall 2011 with the Class of 2015. Current students and applicants to the Class of 2014 will not be affected. Dartmouth will continue to provide free tuition and no loan expectations for students with family incomes of $75,000 a year or less.
"This is necessary in the context of our efforts to address the budget gap while minimizing layoffs," wrote President Jim Yong Kim in a February 8 letter to the community. "We have reaffirmed our commitment to enable the most talented students to attend Dartmouth through need-blind admissions and have continued to steadily increase the number of scholarship recipients in the incoming classes, which has risen from 39.5 percent in the Class of 2004 to over 52 percent in the Class of 2013."
The Board approved an increase in undergraduate tuition, room and board, and mandatory fees of 4.6 percent, to $52,275. This is the smallest increase in the past five years and will be partially offset by a 10 percent increase to the financial aid budget.
Additional actions taken to date include launching over two dozen cross-institutional projects to increase administrative effectiveness at the College by initiating best practices in facilities management, construction, procurement, information technology, research administration, and finance. Student services are being reorganized to improve the student experience. The College is also taking steps to create a more efficient and greener Dartmouth by enhancing waste management and recycling programs, improving energy efficiency, and adjusting maintenance service levels.
In November 2009, the Board asked the administration to prepare a budget plan to address the growing deficit. As a result of the global economic downturn, endowments for Dartmouth and other schools have declined. The investment return on Dartmouth's endowment fell 19.6 percent in the fiscal year ending June 30, 2009, and consequently, projected revenues are down sharply. Although the College expects to have a balanced budget this current fiscal year, projections are for deficits of $54 million in fiscal 2011 and $96 million in fiscal 2012, if no action is taken.
Board Chair Ed Haldeman '70 said, "The Board greatly appreciates the tremendous input received from all corners of the Dartmouth community. President Kim has provided bold leadership and sensitivity throughout this difficult process, and we believe we are now well positioned to move ahead to realize his dynamic vision for the College."
"I am particularly appreciative of the enormous support we've received from alumni, parents and friends in the recent completion of the $1.3 billion Campaign for the Dartmouth Experience [see center insert]; we will continue to rely on their support in the years to come as we seek to rebuild our endowment and continue to invest in Dartmouth's future," wrote President Kim.
He continued, "By managing our resources wisely, and working collaboratively, I am confident that our students will continue to have an extraordinary experience—and that we can also re-imagine Dartmouth College for a new generation, so that our graduates can have an even more powerful impact in the world."
Carol L. Folt
Dartmouth Life