At a fireside chat on Tuesday night, College Treasurer Suzanne Welsh presented a budget cut proposal that will be discussed at the May Board of Managers meeting and solicited student feedback on what matters to them in budget planning.
Welsh reminded students that Swarthmore’s endowment pays for over half of the budget—“it costs the college over 80,000 to educate each one of you”—and that for this reason, “a downturn causes significant problems for the college… our planning cannot tolerate a 30 percent decline.”
Because the college has kept to a relatively low endowment spending rate over the past few years, “the magnitude of our problem is not as great as it is for other institutions… that gives us the luxury of time. We can take a measured, thoughtful approach and solve this over a three to five year time frame,” rather than immediately resorting to drastic measures. “The board is allowing the endowment spending rate to be elevated for a three to five year period as we implement the plan that is developed,” but “we still have to reduce the amount we’re spending by 10-15 million dollars” next year. “We can’t go forward as if nothing had happened.”
Welsh then handed around a list of proposed cuts, which you can access in its entirety from the info-box to the left. Describing the cuts, Welsh said that “our object was to find cost reductions that would not damage the program.”
Some ideas also include increasing revenues. Welsh talked about possibly finding “more uses of the campus in the summertime… [and] more hosting of weddings.” The college also hopes to sell some off-campus property that it owns, as “that will generate some funds we can invest.”
The list of proposed cuts was created by an ad hoc financial planning group of trustees, faculty, and staff. The group’s online home includes a suggestion box where anyone can offer their input. “Those all come to me,” explained Welsh, “and i share every single one of them with that committee… we’ve gotten maybe 40 so far.”
Right now, the bulk of the $12,350,247 in proposed cuts and revenue increases comes from two temporary measures—one is drawing down $2,950,000 from the college’s reserve funds, and the other is cutting the facilities renovation budget by nearly two thirds, taking $5,772,000 out of “around nine million.”
Reducing this part of the facilities budget will mean postponing important renovation work, including improvements to the college’s accessibility mandated by the Americans with Disabilities Act. Human Resources Director Melanie Young explained that “we still have the same end date, but we’re deferring some of the expenses… we’re trying to defer stuff that doesn’t have a big impact on the accessibility, like requirements about countertops that have to be an inch higher… the critical things are still happening on schedule.”
A salary freeze for faculty, staff, and students is expected to save another $1,190,000, and the plan to enroll an additional 16 students should raise another $519,000 in revenue. Dean of Students Jim Larimore reassured students that “we do have the capacity in the residence halls… this will not lead to the ML basement or to the Danawell lounges.”
Other cuts come from across the entire college budget, and students asked questions to clarify many of the items on the list. Welsh stressed that if any of the items on the list were confusing, students should ask for context rather than immediately panicking.
For example, the Finance budget will be “reducing insurance coverage,” but that is not related to health insurance or employee benefits, but rather the fact that “we pay almost a million a year in insurance premiums” against things like fires and floods.
There are no lay-offs planned, but “every vacancy that comes up now goes through a stringent review before it’s filled… if it doesn’t need to be filled that contributes to savings.” The proposed cuts include two vacancies which will not be filled next year, one a staff position in admissions and one a tenure line in the German department. Welsh explained that “the long-term future of that line has not yet been decided… but we won’t be filling it next year.” Academic departments are also cutting back in spending on speakers and materials and reducing leave replacements.
Dean’s Office cuts include a “reduction in student wage hours for campus activities” and a planned “implementation of a modest co-payment for prescription medications dispensed in the Health Center.” The Gazette has not yet been able to track down the exact details on this, but Larimore imagined that it would be no more than “five dollars a visit or something like that… we don’t want to be prohibitive.”
Another item that caused some concern was the ITS plan to reduce the number of computers and printers in residence halls to one each. This does not mean that all the computers will disappear over the summer, but that as they come up for replacement, the excess computers will simply not be replaced.
Students raised a number of philosophical and procedural questions about the budget, expressing their desire for more transparency and input and asking “What are the never-cuts?” To this question, Larimore responded, “It’s hard to say that there is anything we would never cut, although there are things that are given a big priority,” mentioning financial aid, avoiding layoffs, and “trying to make reductions in areas that do not affect the student experience.”
Students were also very concerned about staff benefits. Young said “we recognize that both compensation and benefits have to be competitive. If we fall behind on either of those two dimensions, that erodes the quality of the staff and student experience.” She continued, “We also have a commitment to social justice and to equity… we care particularly about our benefit package at the lower end of the scale, and in a sense it’s actually hyper-competitive.” Although benefits are not yet on the chopping block, “if this recession goes on, we should be looking at everything.”
One student asked about the benefits bank specifically. Young explained that “the college offers a benefits package, and in that package is fully paid healthcare for an individual person and an individual and a dependent… you have to pay a little bit if you have a family with more than one dependent.” The benefits bank is “money on top of all of that, and is only available for people who take single health care—it’s 153 dollars a month. If you’re a single plus a dependent, a little less than that… this isn’t a benefit that differs by pay grade, it goes to anyone who takes single health care.”
Young explained that some staff find this benefit unfair because it does not go to staff members with more than one benefit, and “it’s an odd, lumpy benefit that doesn’t exist outside of Swarthmore College… [but] we haven’t done anything about it because we know that people do depend on it for cash. People use it for important things and we respect that… but when things are getting very, very tight, is that an important one to keep? I don’t know.”