As promised last week, I would like to communicate to the campus community important information regarding the College’s fiscal year 2009-10 budget that has just been approved by the Ithaca College Board of Trustees. Let me state at the outset that I am grateful for the hard work done by the Budget Committee and by the many members of the campus community who made valuable contributions to the budget process. The trustees were very appreciative as well.
This year’s budget preparation took place in an environment characterized by uncertainty in terms of enrollment and the overall economy. We are deeply concerned about the affordability of private higher education and about both the ability and willingness of families to pay the price of the educational and student life experience at Ithaca College. We believe the experience we provide is well worth what we charge, however, and that we are appropriately priced when compared with our competitor institutions.
Given the above, the overall budget process was governed by the following objectives and principles:
1. Try to hold down the rate of increase in tuition and in the overall tuition, room, and board package to levels below recent history.
2. Help families afford the Ithaca experience as much as possible by increasing the amount of financial aid we make available.
3. Recognizing that personnel reductions will be necessary, do what we can to limit the number of employees who will be affected.
4. Where cuts must be made -- both in terms of positions and in non-salary operating budgets -- do so while being as sensitive as possible to the educational and student life mission of the College. Be also sensitive to College priorities within programs, avoiding an "across-the-board" mentality in making cuts.
The outcome of this process is that tuition for 2009-10 will rise by 4.75 percent, the lowest rate of increase in eight years. The overall cost of attendance (tuition, standard room and board, health insurance) will rise by 4.95 percent, the lowest rate in the past seven years.
Because of a smaller-than-expected fall 2008 entering class and fewer returning students, the 2009-10 budget is based on 240 fewer total students than the 2008-9 budget, which translates to reduced tuition revenue of nearly $5,000,000.
Additionally, the tuition discount rate for those who receive financial aid is projected to rise from 34.1 percent to 36.1 percent. This in essence reallocates an additional $3,800,000 from other expense categories to financial aid to help make Ithaca College more affordable for families. The College is budgeting over $68 million in financial aid for next year, the largest amount in its history. On a per-student basis, financial aid will be increasing by $1,134, by far the largest year-to-year increase ever.
The budget also contains some expenditures deemed critical to ensuring that Ithaca College remains an attractive option to prospective students making their higher education choices. These include an $869,000 investment in wireless Internet service for all residence halls -- which will in part be recouped through higher room charges -- and a $200,000 provision for initiatives coming out of the strategic visioning process. Though the development of a strategic vision is still underway, this sum is included in recognition of the necessity for us to advance our vision of educational quality even while adjusting to the changed economic environment.
As I have noted in previous communications, economic conditions have resulted in increased expenses in some areas at the same time that we are experiencing a decrease in our revenue stream. For example, banks will charge the College at least an additional $575,000 to provide letters of credit to secure our debt. Meanwhile, the decline in our endowment and lower interest rates on our short-term investments will reduce our investment income by $750,000.
The bottom line for the College budget is that it will have $2,663,000 less net revenue, even with the fee increases, than it had under the current year’s budget. The consequences, though not unexpected, are nevertheless unfortunate:
Even with these actions being taken, the budget for the next year carries a projected deficit of $2,500,000. Because of prudent fiscal management, the College was able to accumulate surpluses in previous years, and these reserves will be used to fill the gap. The College has not incurred a deficit since the 1950s, but trustees believed it was important to act from a position of strength in order to prevent the impact of the revenue shortfall from being even greater.
There is no question that these budget decisions will be painful for the campus community to absorb. I am convinced, however, that Ithaca College can weather this financial storm just as it has survived -- and thrived -- following other serious challenges in its 117-year history. We will be as transparent as possible in communicating plans for the near- and long-term future. I look forward to your continued participation and support as we face this challenge together.
https://www.ithaca.edu/intercom/article.php/20090215132806582