Budget Process Update
| by Laurie L Patton, Jeff Cason, and David Provost
Dear Members of the Middlebury Community,
We write with some updates on our budget process to emphasize some key points we discussed in yesterday’s Town Hall meeting with staff and faculty.
As you know, this year we inaugurated our open budget process, where we invited faculty, staff, and students to participate and share their priorities. There were several new opportunities for regular and consequential input. Forming the new Budget Advisory Committee allowed elected representatives of Staff Council, Faculty Council, faculty committees, and the SGA to engage at key points in the budget process. The Faculty Resources Committee met on an intensified schedule, including regular meetings with the Trustee Resources Committee. In addition, regular open finance meetings for faculty and staff allowed for even wider input.
While it was not our intention, this initial year of a more open budget process coincided with COVID-19. Instead of moving forward on a financially sustainable budget for 2021 with a small surplus, we faced the challenge of an expected deficit for two fiscal years (FY20 and FY21) because of cancellation of study abroad, returned room and board fees, anticipated lower enrollments, and additional COVID-related expenses. This was a nationwide challenge faced by every institution of higher education. Our budget conversations raised central questions about our community: How do we think about our endowment, our budget, and financial sustainability in a time of emergency?
While we will not be able to confirm a budget until mid-July, we shared our proposal with the Faculty Resources Committee and Trustee Resources Committee earlier this week. That proposed budget would allow us to keep our employees whole, with no salary cuts and working with full benefits—which applies to all our campuses. We built this budget through two mechanisms that we heard from the community in our surveys and discussions: significant cuts in operating expenses and a larger draw from the endowment than was initially discussed. We also heard from the community that some might be interested in redesigning their own work lives, and so we will also sponsor a flexible work program where employees may voluntarily choose the option of working less for reduced pay.
All three of these moves reflect our values of taking care of our people first, and they entail significant sacrifices from all of us, collectively. They are also contingent on student enrollments. If we do not meet our enrollment targets (which are conservative estimates), or we need to send students home in the middle of the semester, we will not be able to continue this budget and will need to think about other options. These will include either reducing the institution’s match on retirement through June 30, 2021, or an institution-wide cut to the salary budget for the remainder of the fiscal year. If we do implement fractional pay, employees who earn less than $50,000 would not be affected, and reductions to salaries would be tiered based on salary bands. We will know in October if we will need to resort to these cuts. For now, we are keeping our people whole.
While all institutions of higher education face these dilemmas, most colleges similar to Middlebury have not chosen the financial path we have. In that light, we also want to remind our Middlebury community that our approach is possible only if we work together. We will need to change how we take care of our own and each other’s health, how we teach, and how we support the educational process and the spaces in which we work. Our capacity to join together is essential as we move forward.
While we are not able to share absolutely certain news at this time, we wanted you to be aware of this positive direction.
Laurie Patton, President
Jeff Cason, Provost
David Provost, EVP for Finance and Administration