Budget committee recommends 6.5 percent increase in tuition expense
February 1, 2008
Filed under Archives
The budget committee has recommended increasing traditional student cost by an average of 5.9 percent and raising continuing education (CCE) student tuition by 4.2 percent.On Jan. 23 in the Founders Gallery, the budget committee gave a presentation on Guilford’s current financial situation and future plans.
Issues concerning tuition, salaries, and the college’s future financial state were discussed.
The committee’s goals for the college for the upcoming fiscal year are to reduce dependence on its line of credit, bring down its debt, and protect its long-term financial health.
“The senior staff, in coordination with the budget committee, have developed the needed action plans,” said Gerald Boothby, vice president of finance and administration. “Additionally, the budget committee, senior staff, and trustees have taken a conservative approach to future enrollment projections and their impact on the budget.”
The presentation was given by Heather Hayton, assistant professor of English and chair of the budget committee, with contributions from Boothby and Adrienne Israel, vice president for academic affairs and academic dean.
“For this fiscal year, the college has had to reduce its expense budgets to accommodate lower than originally approved enrollment numbers for CCE and summer school,” said Boothby. “Also address(ed) was the college’s dependency on the use of its line of credit (that) increased to $3.9 million last fiscal year.”
According to the presentation, the committee tried to craft a budget that “balances between revenue and expenses yet also pays down our line of credit, reflects our reality that 78.6 percent of our revenue comes from tuition and fees, shares resources and responsibilities, and involves plenty of open, ongoing conversation.”
“Despite the talk of cuts that were real and painful, the proposed budget for next year is $4 million more than this year (2007-08),” said President Kent Chabotar. “In 2002 when I arrived, we had no plan and a budget in a deficit exceeding millions despite catastrophic overspending from endowment. Guilford College fixed those problems.”
The college is only able to spend 5 percent of their endowment per year, which is about $2.94 million. However, according to Hayton, “the college is projecting a 5% increase in the amount of revenue budgeted from annual giving for 08-09, and that total amount (from annual giving) will then come to $1.18 million.”
Keeping in mind that the college has very limited funds, the first point addressed in the presentation was “should we tackle deferred maintenance or invest in new construction?”
There are currently no future plans for new buildings. Instead, the budget committee has decided to keep up with “deferred maintenance,” which, according to Hayton, is “taking care of various campus infrastructure needs that had been deferred in the past, or had accumulated over time.”
Secondly, Hayton described the committee’s decision to increase salaries by 3.5 percent rather than add to the faculty. A 7 percent increase in fringe benefit costs will also be assumed by the college.
“The Strategic Long Range Plan (SLRP) identified as one of its top priorities a multi-year plan to increase salary and wages to be competitive and retain our faculty and staff,” Hayton said in an e-mail. “It also identified as another top priority the goal of having a 16:1 student to faculty ratio, which necessitated hiring more faculty. We try to hire faculty in response to anticipated student growth.”
The budget committee decided that adding new members to the faculty was unnecessary because the college has achieved the 16:1 ratio for this year since the enrollment of new students was not as high as predicted.
“We intend to replace temporary faculty if possible rather than add more (full-time faculty),” Israel said. “Increasing numbers has been a priority in the past and since we have been behind, we have increased faculty members at a higher rate than students.”
According to Erin Dell, assistant dean for academic administration and the staff representative on the committee, the staff supports increases for operating budgets and salary.
“There are recommended increases in both salaries and operating budgets,” Dell said. “While the 3.5 percent increase was not as high as originally projected in the SLRP, it was incredibly important to keep a salary increase during the budget process. As for fringe benefits, the college is absorbing increases in health insurance costs for employees.”
The third point the committee discussed was “whether to launch initiatives and programs or strengthen current ones.” The committee hopes to do both, but it is a matter of deciding at what proportions, and which programs.
The fourth and final part of the presentation concerned tuition.
Since 78.6 percent of the college’s revenue is tuition, including room and board, the college hopes to increase enrollment, which will in turn increase the revenue.
According to Hayton, the total headcount for Fall 2008 is expected to increase to 2,748, compared to this year’s fall headcount of 2,688.
Since there are currently no future plans to build more residence halls, Campus Life is proposing a new housing policy that will encourage more students to move off campus so they can avoid overcrowding.
Previously, there was 25 percent reduction of scholarships for students who moved off campus to encourage students to stay on campus.
“Now that we’re full because of increased enrollment, we are trying to deal with not having triples,” said Aaron Fetrow, dean for campus life. “But we also have to make sure that we don’t have any empty beds.”
Campus Life is now proposing to eliminate the 25 percent reduction of scholarships to students who move off campus.