February 12, 2009

‘Grave’ Budget Dictates C.U. Plans

Print More

When Provost Kent Fuchs moved into Day Hall to assume his new position about six weeks ago, he was faced with a daunting task — balancing Cornell’s budget. Facing a $200 million budget shortfall, which represents 10 percent of the University budget, Fuchs had been forced to make some drastic decisions.
In yesterday’s Faculty Senate meeting, Fuchs told the attendees, “The situation is grave. If we do nothing, this institution is at great risk.”
The University endowment has decreased nearly 30 percent, which, combined with less money from donations, has the provost looking for new ways to make ends meet. On top of that, one of Cornell’s prominent alumni donors — who gave $25 to $50 million yearly under the name Atlantic Properties — has stopped funding Cornell recently, according to Fuchs.[img_assist|nid=35047|title=At a Glance|desc=|link=node|align=left|width=|height=0]
In a meeting with The Sun on Tuesday, Fuchs announced that the University would add 100 more students to the usual class size of 3,050 next year to increase revenue. However, Cornell over-enrolled by 100 students last year, so next year’s actual class size may be greater depending on whether the yield rate isis again higher than expected. Fuchs also expressed hesitation about permanently increasing the class size in coming years.
“One of the important questions is how many students should we have, both undergrad and professional, masters and graduate students. This year we have more applicants than we have ever had in the history of Cornell, and I don’t know if its better for us to grow that number because there’s more demand than ever,” Fuchs said.
In order to determine what the number of undergraduates should be, the University plans to create a task force to assess the number of undergraduates it should be admitting.
A main concern is how increasing the number of undergraduates — at a time when the University is less able to hire new faculty — will affect the undergraduate experience and quality of education.
“We don’t want to do something that will degrade the ability of the faculty to both be the best scholars in their field as well as spectacular educators,” Fuchs explained.
Though the University has not declared an official faculty hiring pause, Fuchs did recognize that Cornell is going through a period of reduced faculty hiring.
Concerns have also been raised over whether current faculty — many of whom have lost a significant portion of their own retirement funds — will continue to retire at the same rate they have in the past. The retirement process is part of what Fuchs called “the normal rejuvenation of faculty” because as tenured professors retire, the University is able to hire more, younger professors. In an unexpected change, the so-called “retirement crisis” — which predicted that large numbers of baby boomer professors would retire — has now become a non-retirement crisis, further straining the budget.
“It’s interesting. Three months ago we thought there would be too many faculty retiring. Now we’re concerned there won’t be enough,” Fuchs said.
To offset the budget shortfall, the University will deal with one third of the deficit this year, and the rest over the following two years. On Tuesday, Fuchs delivered a letter to each college dean, officially mandating a 5-percent budget cut for each college. The president’s and provost’s offices will take 10-percent cuts.
In addition to other initiatives announced by President David Skorton over the last few weeks, the University will begin digging into its reserves in what Fuchs calls a “reserve sweep.” Between the central administration and the individual colleges, Cornell possesses over half a billion dollars in reserves. $50 million from the administration and $25 million from the colleges will be used for “critical needs” of the University such as safety reasons and deficit problems. This will include spending money on Cornell Continuing Education, Veterinary Medical Care and the College of Architecture, Art and Planning. According to Fuchs, the Board of Trustees wants to make similar moves next year.
However, Fuchs said that the University has many critical needs. For example, he hopes to push forward the renovation of Olin Library to bring it up to fire codes, which will cost $50 million. According to Fuchs, the project “is paused right now and it will come soon to a point of either taking action about access to the part of the stacks” or moving forward with construction.
In what Fuchs told the Faculty Senate was the most painful part of his six weeks on job, he has had to begin cutting some of the commitments to special projects that the provost’s office made over the years. He said that past provosts have taken on special projects with the expectations that money would continue to flow in.
In addition to cuts from each of the seven undergraduate colleges, the graduate schools are contributing as well.
Fuchs told The Sun, “This year because of how fast the economic crisis hit the whole country, the whole world, we did not have time to make cuts in a very strategic manner. And secondly because we feel that every college, every vice president, every unit needs to contribute to help us. That’s why we’re doing uniform cuts.”
However, the cuts that the contract colleges faced in state funding last year, which amounted to $6 million, was included in their current cuts, meaning that the real-dollar value they have to cut now is lower than that of the endowed colleges.
Fuchs does not anticipate the cuts will be uniform next year after the University has more time to develop a process for institutional and academic planning that will highlight where Cornell should focus its resources.
“This year everybody is sharing and next year we’ll have differential ways of growing revenues and reducing expenditures,” he said.
Cornell will likely need to continue contracting its budget for two years after this, but Fuchs hopes that the University can begin spending again after that
“As we go through these financial challenges, we know that well be shrinking for a few years, particularly in our expenditures,” Fuchs said. “We want to come out of this in a way so that as we go through this pain when the resources come back we’ll be even stronger. We know they will come back in five or six years.”