To the Wesleyan Community:
The Board of Trustees this past weekend considered Wesleyan’s current financial situation and our planning for the future, and I’d like to update you on those discussions and plans. The measures we are proposing will lead to a balanced budget provided that the Wesleyan Fund meets its annual goals, and we are able to avoid further significant losses in our investment portfolio.
Commitment to the Academic Mission and Access
We reaffirmed our priorities of protecting teaching, research, and the student experience and preserving a robust financial aid program that admits students regardless of their ability to pay. Despite upheaval in the financial markets, Wesleyan remains well positioned to address those priorities. Neither the trustees nor I, however, want to minimize the challenges facing Wesleyan. Although Wesleyan’s endowment continues to outperform market indexes, its value has declined by approximately 20 percent to about $511 million, which means that our endowment draw in future years will be substantially less than we had expected. We are projecting a need to cut the base budget by at least $15 million over the next three to five years. In all of our planning we are committed to meeting the Board policy regarding spending from the endowment and directing more of our fundraising toward long-term endowment growth.
Proposed Budget Changes
Our goal is to adopt a thoughtful, prudent stance toward the budget so that we can proceed with confidence in our ability to implement innovative curricular programs that will improve the educational experience for our students. We presented the Board with a plan for achieving $15 million in savings that protects our faculty-student ratio and our commitment to access. Our savings will come from numerous areas of the University’s budget, and we will be engaging in campus discussion on many of our proposals before further Board consideration in February. We are already making more than $5 million of reductions by extending departmental cost cutting.
We have proposed a freeze on faculty, staff, and librarian salaries in 2009/10 for a savings of $2.03 million. We recommend reducing spending in capital and major maintenance budgets during the next several years by almost $7 million. This is not a permanent reduction in the base budget for maintenance, and we will be able to respond to urgent maintenance problems. We are proposing a temporary increase in the undergraduate student population by 30 students annually over four years for a total of 120, which will yield $3.9 million in additional revenue. If we need to add additional classes to facilitate class access we will. We are considering options for a tuition increase beyond the planned 5 percent. We are also eliminating or reducing the growth of some items in the budget, which, together with the savings and revenue opportunities identified above, allow us to meet the objective of $15 million in savings.
In addition, our plan calls for maintaining a 0.5 percent increase in the retirement matching program for faculty and staff, as suggested by the faculty Compensation and Benefits Committee.
I have asked all members of the Cabinet to be diligent in controlling spending. As I’ve said previously, we’ve delayed all major construction projects. We are asking everyone in the community to be cognizant of the need to save money whenever and wherever possible.
Our tight budget is an incentive to think creatively about the University’s core educational mission. I told the Board that we intend to make progress on the College of the Environment, and are expanding the scope of our writing programs. We are making progress at better integrating our first-year seminars, and we are launching a pilot multi-disciplinary lecture course in the spring of 2009. Trustees this past weekend discussed our current thinking about a senior capstone experience, and we explored some interesting ways of bringing together one’s Wesleyan academic experiences before graduation. I fully expect that we will develop a curriculum that enhances creativity and the capacity for innovation, and that the work of our faculty and staff in this area will continue to receive support. We will continue to work on augmenting the opportunities for civic engagement by the student body, as we also strive to make our curriculum and campus more international. In these difficult economic times it may take longer to make progress in each of these areas, but we remain committed to doing so.
To the extent that early decision applications are a guide, high school students are more eager than ever to obtain the distinctive benefits of a Wesleyan education— Early Decision applications are up nearly 40 percent from previous years.
My colleagues and I will meet with major representative groups on campus beginning in December. We will be briefing the Wesleyan Student Assembly on December 7, the Faculty on December 9 and the Senior Administrative Staff on December 12. We are eager to hear your ideas on other possibilities for budget savings.
Thank you for all of your efforts to meet our challenges with a hopeful and optimistic view about what we can accomplish by working together.
Michael S. Roth