Budget Update May 20, 2009

From:    Sprague, Todd
Sent:    Wednesday, May 20, 2009
To:    All Staff & Faculty DL
Subject: Budget Forum Questions and Clarifications from 5-6-09

Some of the questions raised at the recent budget forum are addressed in the Budget Recommendation Summary (PDF) posted earlier. Here are some additional questions.

Question: With the tuition increases included in this proposed budget, are you doing anything to offset the impact on students? 

Answer: Yes. We are holding back 20% of the revenue from the tuition increases to fund additional student aid.  Based on additional federal, state, and local aid, we expect to mitigate all of the tuition impact on the neediest students (80% of all students currently receiving need-based financial aid at Evergreen).  Additionally, many families will get some relief from increased federal tax credits for higher education.  We will also be working here at Evergreen to address the financial impact on middle income families on a case by case basis, within the limits of our available aid funds. 

Question:  If it was a priority to protect instruction, why are the cuts in Academics larger than those in most other divisions? 

Answer:
The proposed cuts for the divisions are:
Academics  6.9%
Finance & Administration 6.6%
Student Affairs 6.5%
College Advancement 5.3%
President’s Office 8.6%

While the overall percentage in Academics is higher, the impact on Direct Instruction within the Academics budget was limited to just 4.4%, significantly lower than the overall cuts in other divisions. 

Perhaps more importantly, the substantive difference between the total divisional cuts is minimal.  The Advancement figure is smaller due in part to a strategic decision to reduce the impact of budget cuts on student employment (Advancement has a large number of student employees, largely connected to the Annual Fund phone-a-thon – an activity that funds student scholarships and divisional discretionary budgets).  A small shift in the student employment budget made a larger impact in the overall percentage for Advancement than it did in other areas.  In addition, the figure in Academics reflects larger cuts in the area of public service centers.

On a practical level, a shift of $27,000 would increase the percentage in Advancement from 5.3% to 6.6%. A shift of $87,000 would reduce the Academics percentage to 6.6%.  Given the size of the annual budget ($53,000,000), the difference attributable to these small strategic choices is small.  For instance, the total difference between Advancement and Academics amounts to about two-tenths of one percent (.002) of the overall budget.   

Question: What happened to all of the ideas we submitted, including those aimed at increasing revenue?  It seems like we should be focusing on new revenue to help buffer future budget cuts.

Answer: While not every idea was posted on the budget Web site verbatim (many covered the same ground and were combined), all of the themes were noted.  As promised, we incorporated those suggestions at the budget table and shared them across the divisions to aid in the budget planning.  There are brief responses to virtually every idea now posted on the budget Web site.  In terms of action, some of the ideas were incorporated into budget plans (e.g. process efficiencies and energy savings).  Some were not practical.  Some would not achieve the hoped for savings or revenue.  Some will take more time to consider and will be incorporated into existing decision making structures. 

There were no “silver bullets” for new revenue in the idea list.   That doesn’t mean we won’t continue to explore revenue opportunities, including increased private fund raising through The Evergreen State College Foundation. 

Question: Why don’t we cut the salaries of some group of higher earning employees (vice presidents, Senior Staff, people who make above some level of salary) through furloughs to reduce the cuts elsewhere and perhaps save more jobs?

Answer: Given that the size of the current cuts (including the number of positions we need to cut) is lower than we originally anticipated, we are holding the idea of furloughs for possible future use if the economy should worsen significantly.  As we noted in earlier scenarios, a five-day furlough for all exempt and classified staff would yield about $350,000 per year (effectively cutting the wages of those individuals by 2%).  We didn’t pursue furloughs with faculty, in part because they already work a reduced contract (less than 12 months) and their salaries lag as much as 20% behind their peers at Washington’s other four-year public institutions. 

As compared to a broad-based furlough, a furlough for a handful of employees would not only undermine the market competitiveness of those positions in the future – and impact those individuals and their families with a pay cut not shared by other college employees – it would save little money. 

If we considered implementing a furlough for the top 75 wage earners on campus, annualizing salaries to adjust for differences in contract length (trying to get an apples to apples comparison) and removing the president from the list since he is already proposing a cut in his compensation larger than a five-day furlough, what would that yield?  To start with, 67 of the top 75 wage earners would be faculty members (including deans).  If we dropped them from the list – since they generally have shorter contracts already (e.g. work less than 12 months), their salaries already lag behind their peers, and cuts in their time could directly impact instruction – that would leave the four vice presidents and four directors or associate vice presidents.  If we instituted a five-day furlough for these eight people, the savings would be about $17,000 a year.  If we added back the five deans that fall into the top 75 (if we wanted to target “administration” specifically) we could add another $9,000. 

We could draw the line in different places, but the general outcome would be the same – a few people would be targeted to produce cuts that could save less than one position. 

While we don’t believe that a furlough aimed at a small number of employees is the best course, if we find ourselves facing larger budget cuts down the road we will consider a broadly applied furlough as one of our options. 

Question: Did the Legislature include specific requirements in its budget for Evergreen?

Answer: Yes.

• Maintain enrollments at 4,213
• Maintain, and try to increase, enrollments and degree production in “high demand” fields including biological and biomedical sciences; computer and information sciences; education with specializations in special education, math, or science; engineering and engineering technology; health professions and related clinical sciences; and mathematics and statistics. 
• Maintain the additional 50 FTE upper division science enrollments we added in the 2007-09 biennium.
• Develop a six-year plan by Oct. 30, 2009 to increase the number of math and science teacher endorsements and certificates granted by the institution (to accomplish this work, enrollments may need to be shifted from low-need endorsement – e.g. elementary education endorsements – and certificate areas to math and science.
• Spend at least $100,000 of state appropriations per year in FY 2010 and FY 2011 for the Labor Center.   The Labor Center’s base budget is $310,993.  The current proposed Evergreen budget would fund the Labor Center at $157,984 per year. 
• Spend at least $200,000 of state appropriations per year in FY 2010 and FY 2011 for the Washington Center for Improving the Quality of Undergraduate Education.  The Washington Center’s base budget is $304,389.  The current proposed Evergreen budget would fund the Washington Center at just over $200,000 per year.