Update on the 2010-2011 Budget

Dear Members of the Saint Mary's College community,

As you undoubtedly know, we are in the second year of a global recession which has severely affected our local and regional economy. We have taken steps in last year's and this year's budget to reduce our expenses and to maintain a balanced budget, and it has become clear to the Budget Committee* that we face challenges similar to those of last year. Our priorities remain the same as we plan for next year's budget: sustaining academic excellence and the quality of the student experience, keeping Saint Mary's affordable, taking measures for efficiency, and maintaining momentum on strategic initiatives, I‘d like to share with you, on behalf of the entire Budget Committee, more specific information about the budget challenges that we face.

The economic environment for higher education remains uncertain, especially in California. Some major concerns are:

• Affordability: What can our students afford to pay and how will this affect our financial aid capabilities and discount rate?
• Internal economies: How can we plan to meet our priorities with no increase or possible reduction in expenditures?
• Funding from the State of California: Will the Cal Grant be reduced?
• Enrollment: Can we increase our enrollment by broadening the number of applications?
• Fund raising environment: How can we counter the weakness in the philanthropic environment?

A year ago at this time, we hoped that the financial challenges we faced as a nation and institution might pass quickly. It is now clear that this is not the case. Budget scenarios for next year based on higher levels of new undergraduate student enrollment, steady enrollment in graduate and professional programs, a reduced discount rate, and no increases to the salary or benefits pools, still show a budget with more than a $2 million deficit. Other sources of revenue are not likely to compensate for this deficit. We expect a decrease in endowment spending, and auxiliary services are either projected to grow modestly or decline in the near term. Given the California economy, with reductions in financial support to schools and the closing of businesses, it will be a challenge for us to keep our professional and graduate program enrollments stable.

While we were hoping for a recovery which would allow us to enhance our salary and benefits programs, we know that will not be possible in the coming fiscal year. We must consider steps to maintain our high quality of education and to increase efficiency and effectiveness. We know we must stabilize and grow our graduate and undergraduate enrollments, enhance our visibility and attractiveness to potential students, and improve success rates for our current students. At the same time, we must pursue other changes that will ensure our continued fiscal stability and our ability to provide a quality experience for all of our students.

I am confident that the Budget Committee will find and recommend additional ways to close the gap for next year and achieve a balanced budget. Please feel free to share your thoughts and suggestions with members of the Budget Committee or give comments using the submit button at the bottom of this letter.

I am thankful to the members of the Budget Committee for their continuing efforts to build a realistic and adequate budget. Members of the Cabinet and I will be discussing the current budget assumptions and challenges with the Academic Senate on Thursday, December 3. I anticipate that further informational and discussion meetings for faculty and staff will occur in the coming weeks and months.

The financial challenges we are facing at Saint Mary's are being felt at nearly every institution of higher education in the nation. I remain confident that guided by our mission, we as a community are qualified to shape our future in a responsible and creative way.

Yours sincerely,
Brother Ronald Gallagher

* Budget Committee Membership

Michael Beseda, Vice President for Communications and Vice Provost for
Enrollment Services
Keith Brant, Vice President for Development
Joel Burley, Professor and Chair of Faculty Welfare Committee
Jane Camarillo, Vice Provost for Student Life
Steve Cortright, Professor and Vice Chair of Faculty Senate
Jeanne DeMatteo, Director of Finance/Controller
Beth Dobkin, Provost
Emily Elliott, Director of Human Resources
Brother Ronald Gallagher, FSC, President
Mel Hunt, Credential Analyst & Immediate Past Chair of Staff Council
Peter Michell, Vice President for Finance and Committee Chair
Priscilla Muha, Director of Financial Aid
Mark Orr, Director of Athletics
Tom Poundstone, Professor and Chair of Faculty Senate
Chris Sindt, Associate Dean, School of Liberal Arts & Graduate & Professional Programs
Carole Swain, Vice President for Mission
Frances Sweeney, Vice Provost for Undergraduate Academic Affairs
Michael Viola, Associate Director of Facilities Services & Chair of Staff Council
Steve Woolpert, Dean, School of Liberal Arts