03/20/09: Update on Academic Budgets for FY10

Dear Colleagues:

As we begin to set budgets for FY10, I write with an update on how the current economic situation will affect funding for academic programs next year.

Although we pursued several cost-cutting measures this year—including a 5 percent reduction in non-academic department budgets and a freeze on staff hiring—we were fortunate to be able to protect academic programs and endowed enrichment budgets from cuts, and we were able to maintain our current FTE count and make several tenure-track hires.

Due to the estimated 25% drop in the overall value of the College’s endowment this fiscal year, next year’s budget will be a good deal tighter than this year’s. On the academic side, this means two things: 1) departments/programs will see a reduction in their enrichment funds; and 2) non-tenure track faculty with extended service at the College will no longer be eligible to receive paid leaves.

Program Enrichment Funds

Next year, core department budgets will look much the same—they will be flat-funded—but enrichment funds that are not fully restricted per agreement with the donor will be reduced. For this year (FY09), roughly $520,000 was allocated to departments and programs to support a variety of enrichment activities—lectures, symposia, internships, field trips, and so on. In FY10, that figure will be cut by $160,000. This reduction is necessary for a couple of reasons. First, a high percentage of these enrichment funds come from endowments that have declined in value and therefore will not generate the same earnings they have in the past. Second, since the amount of money flowing into the operating budget from the endowment will be significantly reduced (remember that 22 of our operating budget comes from the endowment), we must put as much of our unrestricted endowed funding as we can—including money that previously supported academic enrichment funds—toward general budget relief.

The upshot is that enrichment budgets will be reduced by 20%. However, we will establish a floor of $2500 for these budgets, so virtually all departments and programs will be assured of at least that much money to supplement and enrich their academic programs. Consequently, those departments and programs that currently receive $2500 in enrichment funds will see no change in their funding. There are a number of departments that also receive additional program enrichment funds related to endowed professorships held by colleagues in their departments.

Departments/programs that had money from these larger endowments will see larger reductions. Unfortunately, because of the depth of the economic downturn, the earnings from these endowments are needed first to budget relieve the salaries of colleagues who hold these endowed chairs plus other related fixed costs (which was the original intent); remaining earnings on each of those endowments can be used for program enrichment. I will follow-up by separate email with those department/program chairs whose enrichment funds will be substantially reduced. Otherwise, chairs and coordinators can expect to hear about their enrichment funds in late April.

Leaves for Term Faculty

In recent years, we have been able to grant academic leaves to some faculty members in term positions who have served in their roles for extended periods of time. However, given the current fiscal situation, we will no longer be able to offer these leaves. Leaves that have already been approved for 2009-10 and 2010-11 will be honored, and non-tenure track faculty will continue to be eligible for professional development support such as FPDF.

If you have questions about any of these changes, please don’t hesitate to contact me, Susan Campbell, Bob Cluss, or Jim Ralph. Needless to say, these past few months have brought significant changes to the College’s finances, which require us to tangibly modify how we meet the mission of the institution. We will continue to respond to the changing economic conditions as best we can, with the goal of maintaining the strength of our academic programs and the high quality of a Middlebury education.

Tim Spears
Acting Provost Professor of American Studies

Office of the President

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