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This year, the College of Arts and Sciences at Pacific University will have to approve about $1 million in budget cuts from the requested budget, a much higher number than previous years. “We were asked to find about $600,000 last year in reduction so it’s not like this doesn’t happen,” Lisa Carstens, dean of the College of Arts and Sciences said. “It’s just a bigger number.” This is a reduction in the requested budget, not a reduction in the total budget. The projected 2017-18 budget is almost identical in total dollars to the 2016-17 budget. When putting the budget together, Pacific starts compiling a revenue projection like how much tuition to charge and how many students will be enrolled. Simultaneously, the projected revenue is connected with expenses. The different colleges may make requests for additions but they are unlikely to be awarded unless essential, , such as those required by contracts or new recruitment commitments. “The challenge [for the CAS] is that it has been generating net negative revenue and the graduate colleges have been generating – particularly optometry and health professions – a net positive revenue and that’s not a sustainable model,” Lesley Hallick, president of Pacific said. “Eventually each college has to stand on its own, it doesn’t have to make a lot of money but it has to come close to breaking even. It has to bring in enough to cover its expenditures and arts and sciences hasn’t been. That’s not unusual.” What Hallick means is that tuition paid by undergraduate students does not fully cover the cost of their education.
Revenue is then generated by graduate programs to offset the true costs. Because the College of Arts and Sciences is primarily an undergraduate residential teaching campus with a tradition of a high faculty to student ratio, small class sizes and a high undergraduate financial aid model, it is more expensive. Hallick says the challenge is finding ways to make undergraduate education more cost effective without eroding the quality that comes from an environment that fosters close student and faculty interactions. But this year there are a couple reasons the College of Arts and Sciences has added pressure to the budget.
Enrollment in fall was down 50-80 students, which means the smaller freshmen class put a dent in tuition revenue and this will be carried through all four years. Another pressure was getting faculty salaries closer to the average median income of their peers across the nation. The university was raising salaries faster than they were raising tuition. In previous years, tuition went up five to six percent but last year it only went up three. “When we were down in the fall, we didn’t lay anybody off but everybody had to tighten their belt and then going into this year, we have to make that up and you can’t take it all out of contingency because we wouldn’t have any left [for emergencies such as roof or boiler repairs] and you would have to keep doing it year after year,” Hallick said.
“It’s not unmanageable and for the past decade, the university has managed to generate a significant net income at the end of the year that ranges from $2-4 million – that’s the money we put back into the facilities each summer.” As of the December board meeting, there was a little less than a $10 million gap between the expenses requested across the university and the projected revenue to pay for the expenses. Before going out to all the colleges and requesting a certain amount of cuts, the gap was closed by two-thirds with savings found centrally, so there was about $3.6 million left for all of Pacific’s colleges and support areas to cut. But where will the budget cuts, particularly in the College of Arts and Sciences, come from? Rumors have begun circulating on campus about smaller majors and programs becoming at risk of being cut.
Carstens acknowledges that measuring the strength of programs is more complex than just looking at the number of majors in a program. That is not the only reason whether they support it or not, a lot of factors come into play. She also says it does not save the university money to not have a major unless it means they do not need the personnel.
“We are not making wholesale cuts to any one department and reductions may affect one department more than the other because one department may have a position open and the other one doesn’t,” Carstens said. “Nobody in arts and sciences is losing a job. Mostly it’s things like putting off facilities work, delaying the filling of empty positions, smaller trims in various areas.” Carstens does not have any major concerns and believes it is manageable, adding that students will most likely not even notice the difference. “Really the question of the budget going forward is simply this longer planning stage and restructuring how we do things,” Carstens said. Currently, the colleges have all made the first swipe and have come back with a proposed set of reductions. Over the next three to four weeks, the university is going through discussions, implications and processing the reductions. There will not be a complete answer of reduction consequences until the end of February. The results will go to the March board meeting as a balanced budget which means revenue is equal to expenses. Even after a balanced budget is approved, the colleges and support areas will have the opportunity to reallocate reductions if needed. “I think faculty and students can get anxious about targets on their back,” Carstens said.
“We are not at a target on the back stage.” As for the future of the budget, Hallick wants people to start looking at it long-term in a more strategic approach to budgeting initially by putting together a three-year budget instead of short-term trimming every year. Every area, all five colleges and all major support areas, have been asked to take reductions and to do so in the context of a three-year projected budget. “We are trying to use 2020 as a horizon to help both the colleges and the administrative areas drive their budgets with true change,” Hallick said. “Everything’s on the table right now, from administrative duplication to the level of support truly needed for optimum learning, from class size to efficiency of teaching, including what the faculty work loads are, are they distributed evenly and fairly? Do we have really small classes; do we have some that aren’t very full?
I think we are going to have to take a look at things like winter term, does that really make sense or would students be better off with a May-June summer option? We don’t charge for winter term and that’s a long-standing tradition here, but we pay the faculty to teach it so it doesn’t really make sense economically. We have to start thinking about the whole curriculum and how it might be delivered more efficiently.”
An important thing to note is that any major implementations are not going to happen immediately. Large curricular changes need to be voted on, have the data to support the change and the specific plans to change. Hallick and Carstens urge students to come forward with any suggestions on efficiencies and things they would be willing to give up.