Weak Economy Prompts College to Shave $11 Million Off Budget

Author: Jonathan White

In a letter released to the Middlebury College community today, the Executive Council detailed its recommendations for cut-backs in College programs to correct the gap between endowment revenues and expenditures. The document slices $11 million off the College's operating budget for 2005.
The Council has been working since the fall to address poor endowment performance coming on the heels of a national economic downturn.
The Council has submitted its recommendations to President John McCardell. The Budget and Finance Committee of the Board of Trustees will review the proposal this weekend.
Prominent changes resulting from cutbacks will be the loss of Winter Term off-campus study courses in the immediate future and a reduction in funds for building maintenance and modernization.
The Council obtained suggestions from faculty and department heads for scaling back their respective expenditures. After gathering these suggestions, the Council proceeded to identify several overriding principles.
President John McCardell said that these principles revolved exclusively around the needs of staff and students.
Accordingly, for students, foremost among the guiding principles was seeing that the College preserve its need-blind admissions policy and its guarantee of full financial aid.
The second principle is that academic excellence remains at the core of what Executive Vice President and Provost Ron Liebowitz described as the "concentric circles" of Middlebury's programs and missions.
A third and significant priority in addressing the resource gap is that the College retains its commitment to the community. McCardell pledged last fall thatbudget cutbacks would not result in layoffs. When confronted with a similar crisis in the early 1990s, the College laid off employees, resulting in fallout in the community.
The fourth principle guiding the Council's final recommendation was to ensure that elements closest to the core of Middlebury's academic program remain intact. It also stipulated that superfluous programs be reconsidered.
In light of this fourth principle, the report calls for the suspension of off-campus courses during Winter Term. Liebowitz said that he is a fan of Winter Term off-campus study, although he commented that if this was the one area of the academic program that had to undergo cuts, doing so would still protect the College's "core academic program."
Liebowitz noted that as the College remains committed to the principle of providing full financial aid to students studying on an off-campus course during Winter Term, these classes had become a significant expenditure for the College to finance. "Because of our commitment to covering the full costs of the courses for any student on financial aid, these are very expensive courses," Liebowitz said.
President McCardell said of the temporary suspension of off-campus Winter Term study options, "I am quite confident that the academic reputation of Middlebury College will remain intact despite curtailment of off-campus Winter Term courses."
In addition to these changes to academic programs, the Snow Bowl shuttle service will now run only on weekends. Other cuts will reduce large, all-campus celebrations and events, such as outside dining events during the spring and fall.
Overtime pay for employees will be reduced by ten percent, while academic departments will see cut-backs for travel, printing and office supplies.
Allocations for the maintenance and modernization of College facilities will undergo a $1 million budget reduction. Liebowitz said that although this change might be somewhat noticeable given that Middlebury has been one of the top five out of 100 schools in terms of the condition of its buildings after audits of physical infrastructure, the College will stay in the top-tier of schools.
McCardell said that in the past year the maintenance budget was actually under-spent and called the current allocation "quite generous."
Liebowitz said that the College's current building projects will not be affected by the budget revisions because the construction costs of those projects come from the capital budget and not the operating budget. The decision to continue with construction was made last February regardless of the endowment performance.
"The overall scheme, from the board's approach to the Executive Council's work with their respective departments and colleagues, represents an enlightened approach," Liebowitz affirmed.
With the proposed modifications in endowment spending, Liebowitz said that for the fiscal year 2005, the gap between revenues and expenditures will be zero, whereas without the recommended changes, the gap would have been somewhere around $11 million.