May Update: Economic Climate at Bates
Dear Colleagues and Friends,
At their third and final meeting of this academic year, the Bates Board of Trustees approved the budget for our next fiscal year, July 1, 2009-June 30, 2010. I know you have all been following and in many cases contributing to our intense, collaborative, protracted and ultimately successful efforts to prepare a balanced budget proposal that will sustain the College’s educational mission through tough economic times ahead. I write now to thank you for your support and to share some highlights of what we have collectively accomplished.
As you well know, Bates exists for and because of people who care about learning and the power of education to make a difference in the world: our students and their families; our faculty and staff; and our trustees, alumni, and friends of the college. Our budget priorities and strategies reflect this shared dedication to an extraordinary mission. We believe that the advice of Benjamin Franklin—a great inventor and innovator, also known for his prudence and frugality—is still worth heeding: “an investment in knowledge pays the best dividends.”
We also know that an investment in Bates is costly for our students and their families, and we worry about the affordability of a private liberal arts college education during this economic downturn. Yet student fees account for over 70 percent of our revenues. So our task has been to balance the need for revenue to support our mission with our concerns about access and affordability. We have worked hard to keep our increase in fees as low as possible and to sustain our commitment to meeting 100 percent of the demonstrated financial need of all admitted students. We focused first on cutting costs and raising other revenues wherever possible before determining the comprehensive fee for next year. As a result of this focus, the increase will be 3.95 percent, the lowest percentage increase since 1971. At the same time, we have increased the financial aid budget by 14.2 percent, the highest percentage increase in many years. Given the fact that there is still at this point great uncertainty about the effect of the economic climate on our current students and families, as well as on other elements of spending next year, we have also more than doubled our contingency funds (to $1.5 million, or 1.7 percent of the budget).
On the other side of the equation, we also worry about the effects of the recession on the well-being of our staff and faculty members. We have managed to balance the budget without lay-offs or across the board hiring freezes. In order to accomplish this we have eliminated temporary labor wherever possible and a small number of staff positions through attrition, and there will be no across the board increases for faculty or staff salaries. The budget does include, however, some increases for promotions and market adjustments (based on our market reviews of distinct categories of employees, which we will continue next year). Fortunately the College has covered the 2009 increases in health insurance premiums, and the consumer price index indicates the cost of living has been relatively flat. Also, the budget includes a one-time payment of $750 (prorated for those who work less than full time) to be made in a lump sum in July to employees who make $40,000 a year or less on an annual basis. Approximately 60 percent of our staff will receive this special payment in recognition of the differential impact of these trying economic times (please see the Human Resources webpage http://www.bates.edu/hr.xml for more information on the one-time payment.)
We have been able to address our concerns about affordability and salaries by reducing non-personnel expenses throughout departments, with many decreasing substantially from last year’s levels. In my last message, I talked about the “Cost-Savings Initiative” (CSI) program piloted in Human Resources. Across the campus, many have worked energetically to suggest ways of improving our efficiency and reducing our costs immediately. The CSI program has also elicited many longer-term ideas that will continue to be reviewed by the Budget and Finance Advisory Committee and members of Senior Staff. Some of these initiatives seek to work more with other colleges on purchasing and sharing materials, and we will seek other collaborative efficiencies. Other initiatives suggest better ways of working together within the college, breaking down the silos to combine tasks, make joint purchases, and otherwise share resources more effectively. The increased use of technology also supports cost reductions, not we trust at the expense of the human interactions that are so essential to our community, but in areas where we can save for example on paper and postage with more online processes.
Multi-year planning continues to be an important strategy, now and in the future, for preparing us to consider more extensive changes. We are feeling only the first, partial effects of the economic downturn, and we will be analyzing more comprehensive strategies that will maximize the revenue of our infrastructure. Looking forward even two to four years, we see that continuing work on all fronts will be required if we are to balance the budget while making sure that our top priorities are fully supported.
With this focus on prioritizing and strategic thinking in mind, at their recent meeting our Trustees also received the reports of the three planning teams and heard a presentation from the consultants we have brought on board to update the Campus Facilities Master Plan. There will be opportunities for everyone on campus to learn more about both of these forward-looking efforts. I hope you will all participate in them. With the shared vision they are developing, we can continue to advance the ideas that bring Bates the most talented students and the most dedicated supporters.
In remarks on his retirement after 14 years as Dean of Columbia College, Austin Quigley recently commented on the difference between seeing what we do as a job, and seeing it as a mission. Seeing our work in academe as a mission, he said, “means that you have responsibility for the future of an institution that goes back to 1754. A tremendous number of people through the centuries and the generations have put their energies and their efforts into creating and sustaining an educational institution for young people with its own unique and irreplaceable character. You have to accept the role knowing how serious and how extensive the responsibilities are. But you can’t approach it with the attitude that you will simply be a custodian and mind the store; the College has to get better all the time. That’s the responsibility that you have to all those people who came before you and to all those people who are here right now and to all those people who will come after you. The College must be in better shape when you leave than when you began. . . . The stakes are very high in just about every conversation you have every day. “
Reading these thoughts, I was struck by the fact that Quigley might be describing the attitude I see at Bates every day. This is not a time for business as usual or just minding the store, and Bates people are clearly recognizing that fact, accepting their responsibility to the past, present, and future of an institution that goes back to 1855 and is a dynamic, evolving place. The stakes are indeed high, and now more than ever I thank everyone for joining me in making this college better all the time.