 "Photo: N/A")
“There’s nothing in this College, no part of the budget that we’re not looking at,” said Dean of Planning and Academic Affairs Rachel Kitzinger, explaining Vassar’s approach to the financial crisis. “The challenges facing us are great, but we’re trying to think deeply and creatively about our budgets.”
At a somber meeting that extended until 10 p.m. on Feb. 24, five Senior Officers held an open forum to update students on the state of Vassar’s economy. President Catharine Bond Hill, Dean of the Faculty Jon Chenette, Dean of the College Christopher Roellke, Vice President for Finance and Administration Elizabeth Eismeier and Kitzinger took the audience through the trauma that the budgets have undergone. Kitzinger began with a 20-minute introduction on the situation.
Only 52 percent of Vassar’s operating revenue—about $153.9 million per year—is derived from tuition. Thirty-two percent is derived from earnings on the College’s endowment. “The problem we’re having really comes in several parts,” Kitzinger explained. “Our endowment has fallen down by about $200 million, we decreases the amount that we earn from it. But the financial crisis… compounds this by hurting our base of donors and increasing the number of families who need financial aid.”
Even before the start of the financial crisis, Vassar was already over-budgeted for the 2008-09 academic year. Rising costs of energy and food accounted for an additional $800,000 strain; the College had also underestimated the financial aid spending that would be required for this year by about $1.2 million. Even before the worst of the recession this fall, the endowment had earned only 0.5 percent in the last fiscal year.
“So even before the [crisis], we were already looking at ways to trim our operating expenses,” said Kitzinger, who explained the so-called “snake and tunnel” approach to endowment management. “We know that we can draw, on an average year, about 4.5 to 5.5 percent on the endowment. That’s the tunnel, and sometimes the snake is on the high end of that tunnel and sometimes it’s on the low end.”
After the market calamities of the fall, the College had to draw about six percent from the endowment, when the Board of Trustees had only approved 5.3 percent. As a rule of thumb, a spending rate exceeding 5.5 percent will prevent future endowment revenues from keeping pace with spending.
“These endowment draws can be fairly abstract,” said Eismeier, “but it’s important to realize that drawing [too much] this year can quickly harm the College’s future financial health.” In Hill’s words, overdrawing from the endowment can lead to a “future disequilibrium,” a concern of which all of the Senior Officers tried to remain mindful.
Since the dramatic market drops between September and February, the situation has only become more severe. The last economic slowdown, which occurred between 2000 and 2001, took Vassar about five years to recover from. “Similarly, this [current] fall from about $900 million to $600 million will not be easy to climb back from,” Kitzinger said remorsefully. “Recovery takes a long, long time. We can’t keep spending the way we have, and just hope that the market will bring us back where we were.” For the 2009-10 budget, administrators have successfully trimmed the projected operating budget to $101.9 million, assuming 56 percent of students will be on financial aid. To achieve these savings, all offices have been asked to cut discretionary day-to-day spending by about 10 percent.
There has also been a salary freeze placed on all faculty and administrators. About $900,000 has been saved by not filling vacant positions; an additional $750,000 will be retained by not renewing the contracts of many visiting and adjunct professors whose contracts will expire.
A reduction in the capital projects budget—which stood at nearly $44 million in 2008-09—has been slashed to only $12 million in 2009-10. “This really leaves room for maintaining critical structures of buildings’ envelopes,” noted Eismeier—“heat, water, roofing, masonry, things that are essential.” Almost half of the $12 million comes from a restricted gift to renovate the aging Wimpfheimer Nursery School by Mary Lee Lowe Dayton ’46, a former trustee.
Roellke mentioned several smaller ways in which the College intended to trim expenses: $20,000 will be saved by not printing paper copies of the 2009-10 Course Catalogue. The freshman Facebook publication will cease, saving $4,000. Additionally, the contract of Noyes and Cushing House Advisor Scott Radimer is due to expire, and his position will not be filled. “Instead we’re working creatively with the Office of Religious and Spiritual Life, and one of their interns will live in the dorms and share the workload.” The College is trying to incentivize early retirement for employees of two campus unions, which administrators believe will likely be beneficial to both the employees and the long-term budget of the College.
Perhaps more controversially, administrators are also actively discussing moving away from a 24/7 health-care system in Baldwin. “We’re trying to think quite creatively,” said Hill.
“[Vassar] is really just unusual compared to our peers, who have almost all moved away from 24-hour health services. In many cases, schools have noticed that the quality of care at those late hours is not as high. Taking students directly to the hospital might be the safer course of action.” No decisions on cutting health services have yet been made. Plans to move the Bookstore, which Hill advocated as important for community involvement, have been postponed. Administrators are speaking with private donors about restricted gifts to finance the project.
In total, over a three-year period, the College intends to cut an addition $20 to $24 million from its operating budget and eliminate about 10 to 15 percent of staff positions. Next year, there will be 35 fewer course sections offered in total.
The question-and-answer period, which lasted for about an hour, was tense at times—though not nearly as heated as the discussion about potential cuts to the English Department that took place in late December. Some audience members questioned the amount of student voice being taken into consideration. One student asked pointedly, “If you really care what we think, then why are none of you taking notes on what we’re saying?” Roellke quickly noted that his student assistant, Andrew Bennett ’09, was taking notes on their behalf.
Vassar Student Association (VSA) President Jimmy Kelly ’09 spoke briefly during the meeting about the ways in which the VSA Executive Board was attempting to ensure the importance of student voice on discussions about financial cuts.
“While I think the administration has more fully included the student voice this year than in year’s past, I do think that there are many steps yet to be taken,” Kelly said after the meeting. “Our recent victory in securing a spot for [VSA Vice President for Academics Camille Friason ’09] on the Advisory Group for the Allocation of Faculty Resources is a first step,” he continued.
Friason will participate in discussions over potential faculty cuts or reallocations. Kelly added, “At an institution that trumpets its values of shared governance, involving all parties in decision-making processes is crucial…We need to ensure that students are not just consulted, but that they have suffrage rights in the committees making important decisions. Consultation without formal suffrage is just a cosmetic attempt at shared governance; student voice will be protected through student votes.”
Despite many concerns about student voice, few students attended the meeting in Sanders Auditorium. Less than 30 attended in total—a figure that includes all six members of the VSA Executive Board and four members of The Miscellany News staff. “I wish more students had been present for this important discussion, but I understand that folks are preparing for midterms and that the forum competed with Obama’s address,” Kelly admitted.
For their part, the administrators appeared just as deeply concerned with the the College’s future as its present. “Whatever happens,” said Kitzinger, “we have to get the snake back in the tunnel—for the long-term health of our school.”
6 comments
it's dissappointing to say the least.
I don't know why they chose to have the meeting during Obama's address. That seems like a very stupid decision.