Board Adopts Budget for 2011-12
Dear Members of the Saint Mary's College Community,
Greetings to all as we approach the final week of an exciting and stimulating January term. I myself took the opportunity to spend a few days with our travel course to Ireland and enjoyed the time spent with our students.
The primary topic for the Board of Trustees at its annual January meeting was the review, discussion and approval of College budget assumptions for the 2011-12 fiscal year. To support their budget deliberations, the Board received a presentation by VP for Finance Pete Michell placing our financial issues within the broader context of U.S. higher education and from Provost Beth Dobkin on our College's opportunities and challenges (such as those presented by the Academic Blueprint, the next round of WASC accreditation, institutional capacity and AASCSB accreditation.) These presentations and the resulting dialogue with and among Board and Cabinet members provided important context for our specific budget assumptions.
The Board-adopted budget assumptions for 2011-12 reflect the view that the national economy has stabilized and is in the midst of a slow but steady recovery. Meanwhile, our state will need to make drastic spending cuts in the next few years to balance its budget. Unfortunate reductions in funding for public institutions of higher education will significantly reduce needed opportunities for the most vulnerable in our society and do real harm to our state; nevertheless, some of these cuts may indirectly enhance our efforts to meet institutional enrollment objectives. Funding for Cal Grants (vital to our institutional aid initiatives and currently included in the governor's budget proposal) depend upon state voters supporting the extension of taxes this June. Accordingly, our 2011-12 budget plans include some contingency plans should voters reject that ballot measure.
The 2011-12 budget assumptions adopted by the Board include the following:
1. Stable undergraduate enrollment of 2,638, including 750 new undergraduate students.
2. An undergraduate tuition rate increase of 4.9 percent and a 4.0 percent room and board rate increase. These increases will leave our comprehensive rate (tuition, room and board) lower than the private institutions with which we most commonly compete for students.
3. An increase in non-athletic financial aid of 9.5 percent ($2,936,000) and a new student discount rate of 33 percent (compared with 37 percent for last fall). The College Budget Committee had proposed a 36 percent discount rate for new students. Given the significant impact of aid on institutional finances, the Board challenged the College to go even lower.
4. A decrease in endowment income of 7.8 percent ($500,000). Although the value of the College endowment has rebounded to over $125 million, the spending rate results from the average of the previous 12 quarters, during which its value decreased.
5. An increase in graduate and adult revenue (3.0 percent) and careful control of expenses resulting in a modest net income increase in these programs of 6.0 percent ($358,000).
6. A 3.3 percent ($1,666,000) increase in the faculty and staff salary pools. Two percent of the increase will fund salary adjustments while 1.3 percent will be allocated to new faculty positions.
7. An increase of 25.7 percent ($3,112,000) in employee benefits to keep the College's pension contributions at 8.25 percent and to increase its health insurance contribution by 10 percent.
8. An allocation of $1.5 million for strategic initiatives such as faculty development, library initiatives, technology enhancements, sesquicentennial and capital campaign events and contingency.
The Board and the administration remain cautious about our financial situation, given the volatile nature of the economy and the very slow recovery.
I am grateful to the members of the College Budget Committee who have provided vital leadership and have modeled our communities' values while engaging in difficult and sometimes contentious conversations. I am also grateful to our talented and committed staff and faculty members whose continued dedication to our shared mission of education have been and will continue to be our greatest asset.
I am pleased to see that the Faculty Senate has moved to keep the Core Curriculum implementation on track and that other College committees have been assiduous about their work. Thanks to all for your efficiency.
Finally, thank you to the many faculty members, students and staff members who participated in yesterday's President's Open House. VP Beseda reports that attendance at on-campus undergraduate recruitment events for this academic year continues to run significantly ahead of previous years. Your ongoing assistance with student recruitment initiatives is needed as we attempt to achieve the very ambitious new student discount rate challenge set before us by the trustees.
Brother Ronald Gallagher, FSC