Cuts to save College $20 million

Author: Kelly Janis

When the Middlebury College Board of Trustees convenes for its annual spring meeting from May 7 to May 9, money will be at the forefront of its discussions, especially the $20 million in budget cuts Old Chapel is planning for the next academic year.

"By and large, we're going to devote most of our time to talking about the financial situation," said President of the College Ronald D. Liebowitz, "and how we're doing in terms of our budget cuts, in terms of our projections for next year, in terms of the endowment and so forth."

The Trustees' chief task is to approve the College's budget for the 2009-2010 fiscal year.

"This year, of course, that has some extra meaning, given the financial situation," Liebowitz said.

The Budget and Finance Committee works closely with Chief Financial Officer Patrick Norton throughout the year, vetting the projections and assumptions underlying the proposed budget.

As a result, Liebowitz said, "there are few surprises by the time the [Trustees] gets to the table in May."

Liebowitz explained that the College begins with a multi-year financial model that does not include specific items in the budget, and then negotiates annual budgets that include all funding for programs, but does not reveal the specific cuts that will be seen next year.

In light of the economic downturn's impact on revenue, these cuts will be considerable, totaling approximately $20 million diffused across the College's operations. Liebowitz will announce the latest round of cost reductions approved from the Budget Oversight Committee's recommendations sometime this week, once directly affected parties have been notified.

"I'm sure we'll have some discussions about those," he said. "No one likes cuts."

The Trustees will also consider resolutions on the comprehensive fees for Schools Abroad, Language Schools, the Bread Loaf School of English and the Bread Loaf Writers' Conference.

Schools Abroad fees "vary from school to school, depending on what exchange rates are, as well as what the economic situation is in Japan vs. Italy, for instance," Liebowitz said.

Language Schools fees are expected to increase by a whopping 5.2 percent, and fees for the Bread Loaf Writers' Conference and Bread Loaf School of English by 4 percent, according to Vice President of Language Schools, Schools Abroad and Graduate Programs Michael Geisler. This is greater than the 3.2 percent increase of the undergraduate comprehensive fee to $50,780.

Unlike the undergraduate program, the Language Schools do not rely as heavily on the endowment, instead drawing from their comprehensive fees to fund salaries and financial aid. While a smaller increase in the comprehensive fee would make it easier to market the schools to prospective students, it would prove detrimental in attracting and retaining faculty.

"There was a time, about 10 years ago, when the Language Schools were among the most expensive summer language institutes around," Geisler explained.

The expense made it such that the schools were reluctant to raise their comprehensive fees, for fear of losing students. In turn, Geisler said, the schools "fell behind significantly" in increasing salaries for summer faculty, especially in comparison to increases for regular academic-year faculty.

As a result, many instructors - especially those in high-demand languages such as Arabic - are spending one or two summers at the Language Schools on account of their prestige before defecting to other institutions that can afford to pay more by limiting the number of programs they offer, and canceling them if they do not enroll to full capacity.

The dollar's slide in value relative to the euro has introduced an additional layer of complication for the approximately 250 faculty members who come to the Language Schools from more than 25 countries across the world. Geisler said that over the course of the past two years, the average faculty member's "take-home" salary has decreased by approximately one-third.

"If they spend it over here, it's still fine," he said. "If they take it back to Europe with them, they lose a lot of money."

Moreover, Geisler pointed out, when faculty members from overseas come to Vermont for seven or nine weeks during the summer, they cannot do research at home.

"And if you want to get a salary increase at the home institution, you need to do research," he said.

Raising the comprehensive fees to support faculty salaries requires a trade-off, however. The Language Schools use a different financial aid formula than the undergraduate program, in which full demonstrated need is not guaranteed to be met.

"I can't rule out that the increase may impair students' ability to attend," Geisler said.

He described the tenuous balance as one that must be readjusted every year.

"We can't fall behind again," Geisler said. "Otherwise, other institutions will snatch up our best faculty, and that could kill the Language Schools."