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Brandeis University's Community Newspaper — Waltham, Mass.

University faces $10 million budget shortfall

Published: October 3, 2008
Section: Front Page

President Jehuda Reinharz announced that the university faces a $10 million dollar shortfall for the 2009 fiscal year at Thursday’s Faculty Senate meeting.

The current economic downturn “obviously affects all of us,” Reinharz said, “universities are experiencing particular challenges.”

“As we were closing the 2008 budget and planning for 2009, we knew things weren’t looking good,” Reinharz explained.

Reinharz cited three patterns affecting the university’s budget. First, while Brandeis’ endowment returns are better than most, they are declining. Second, “donors have less to give,” and third, revenue from student tuition has decreased.

Also, “energy costs are up and contract services are up,” he said.

Reinharz then announced, “we are projecting a $10 million shortfall.”

In March, the university trustees approved a budget for the 2009 fiscal year, Executive Vice President and Chief Operating Officer Peter French explained. The $10 million shortfall is based on the projected figure approved in March. French explained that the university is now expecting a decrease of $4.2 million in revenue from graduate and undergraduate tuition revenue, a $3.8 million decrease in philanthropy and endowment, and a $2 million increase in operating costs.

“Our total gross budget is $336 million for 2009,” French said. Of the $336 million gross budget, $140.9 million is the university’s “controllable base budget.” The other money is composed of sponsored research and gift funded budgets, among other fixed monies.

In order to make up the $10 million shortfall, the university will use $5 million of one-time resources and make a 3.5% reduction in the controllable base budget.

Brandeis felt the pinch of the slowing economy last year. While the fiscal year 2008 operating budget was balanced, “it was a tough effort to get that budget balanced,” he added. In order to balance the budget, French and his staff were forced to up the endowment draw to 5.4% and increase their use of donations to the university.

Despite the shortfall, Reinharz assured the faculty that he would “strive to minimize the effects on faculty, students, and staff.” In making budget cuts, “we are trying to preserve as best we can the integrity of the academic enterprise and student life,” he said. He added that while some staff cuts will be made, no programs will be closed and no full-time professors will be laid off. Where possible, staff cuts will be “implemented immediately,” he said.

French then urged expediency. “The longer we wait,” he said, “the more we have to cut.”

He added, “I have to re-emphasize the uncertainty of all of this. We don’t know where this is going to go.”

When asked if the $10 million shortfall estimate reflected a best or worse case scenario, he responded, “I don’t think it’s too optimistic and I don’t think it’s too pessimistic.”

“I am asking the faculty and staff to behave as citizens of the university,” Reinharz said at the close of his presentation. “I do believe we can pull through this particular downturn in the economy.”