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2009 Winter Issue 1 (January 16, 2009)

Carleton’s budget begins to take shape

January 16, 2009
By Ben Hellerstein

The college will likely reduce its non-personnel spending for the upcoming school year by five percent from this year's budget, due to the ongoing world financial crisis.

According to conversations with president Rob Oden and vice president and treasurer Fred Rogers, every division of the college will seek to reduce expenses primarily by increasing the efficiency of their operations, but both men emphatically stated that there would be no decrease in financial aid, nor was it likely that any faculty or staff positions would be eliminated.

The value of the Carleton endowment shrank by approximately 20% between July and December of last year as a result of the fall in the stock market. Donations to the college also decreased over the same period, by about the same percentage.

The college draws approximately a quarter of its annual operating budget from the endowment. The amount that can be withdrawn from the endowment each year is limited by a formula that takes into account the value of the endowment over the past several years.

In the current school year, the various divisions of the college have already reduced their expenses by $500 thousand in response to the emerging financial crisis. Oden said that these savings resulted primarily from deferred maintenance on campus buildings, as well as cuts in food, entertainment, and travel: sending fewer people to conferences and not serving soda at College Council meetings, for example.

Planning for the next school year's budget began in January 2008, at which time the college forecasted a 3% increase in spending. Taking into account both the cancelled 3% increase and the planned 5% decrease, next year's expense budget has been cut by a total of $1.5 million.

In February, Carleton's trustees will vote on the final version of next year's budget. However, even after the budget is approved, the exact nature of the spending cuts will not be clear, as the budget contains only general categories of spending and is not itemized by department.

The proposed budget for next year will reduce or eliminate the raises normally given to faculty and staff each year. But the college has no plans, according to Oden and Rogers, to eliminate any faculty or staff positions (apart from the closing of River City Books, the college-owned bookstore on Division Street that has never broken even).

In addition to replacing those faculty members retiring at the end of this year, the college plans to add four new tenure-track faculty positions next year. At a time when many schools are freezing or reducing the size of their faculty, the open positions at Carleton are very competitive. For one position in the math department, the school received 570 applications, according to Oden.

The college also will not cut financial aid. Rather, the amount of money set aside for financial aid will increase next year, not only to make up for the regular rise in tuition but also to cover any special need that may arise among students currently at Carleton who require additional financial aid as a result of job loss or other symptoms of the financial downturn.

Oden said that the quality of the student body and the faculty are central to the Carleton experience and will continue to be supported by the college. "Let's cut back on things that are not central," he said.

The cuts that are implemented next year may be "difficult, unpleasant, not enjoyable," according to Oden, but they will not affect the core of the Carleton experience.

Rogers said that the savings for next year will come primarily from increasing efficiency in the use of resources and collaboration between different departments. The development and fundraising offices, for example, are located in four different buildings, requiring redundant staffing. Consolidating the offices could result in substantial savings.

Rogers said that despite the difficult financial situation, the college must continue to invest in ways to improve its operations. The college's recent implementation of electronic billing, for example, cost some money up front but ultimately saved the school the time and expense of paper billing.

"You don't want to stop innovation just because you feel cash-poor," Rogers said.

If the endowment does not recover by the 2010-11 school year, then the college will be further restricted in the amount of money from the endowment that it can spend. Task forces of the Education and Curriculum Committee and the College Council are looking into ways to further reduce expenses in future years. These committees are investigating ways to reduce the cost of winter break programs, to make enrollment more consistent across terms, and to use the funds designated for outside speakers more efficiently. One committee is also examining the possibility of holding summer programs on campus to raise additional revenue.

The new dorms under construction across from the LDC are still set to open on schedule next fall, as their construction is funded by a gift from George L. and Patricia D. Cassat. The renovation of the old Northfield Middle School into a new Arts Union was put on hold this past fall, and Rogers said that there is an "ongoing conversation" about how to proceed: whether it might be possible to begin some smaller portion of the construction in the near future. But he could not give a date when construction might begin.

In the admissions office, the number of early applications this year were virtually identical to those last year (the final number of regular applications, due on January 15, will not be known for a few more days).

Oden said that he was aware of the financial anxiety among prospective students and parents, as well as current members of the Carleton community, but he praised faculty and staff for the "spirit of cooperation" they have demonstrated thus far.

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