Budget could see red
Members of the Bowdoin community gathered at an open budget
forum last week where Director of Budgets Gerry Boothby indicated that
the past year was a tight one for the College.
"Last quarter," he said, " the numbers were
on the downhill." "The endowment was at $433 million on June
30th of this year." This figure is down from $466 million reported
in June 2000.
Boothby said that enrollment exceeded expectations by about
50 students last year, yielding $700,000 in unanticipated College revenue.
Annual giving also "helped to offset some of the effects" of
increased costs, "...but the bottom line was that we squeaked by,"
According to Boothby, there is a potential for the College
to be looking at a $5 million deficit in five years. He mentioned several
factors in this potential deficit problem. "We are facing the rising
overall cost of medical insurance," he said. "The numbers are
staggering; it could be in the 30 percent range.
"Something like that has to be looked at," he
continued. "Anything above a five percent increase is extraneous
to the budget."
Alumni giving, which made up 15 percent of budget revenue
last year, is another concern. Next year's working budget estimated a
three percent increase in annual giving, a rate of growth roughly equal
to the inflation rate.
However, uncertain economic times may cause alumni giving
to remain flat. "We could be looking at receiving the same amount
of money as last year, which would have significant effects," Boothby
With a decreased endowment and sputtering economy in the
background, the Treasurer's office is watching College spending carefully.
"If nothing changes, we'll be at a $1.9 million deficit next year,"
It is with these newly revised figures that the Budget and
Financial Priorities Committee is considering its budget estimates for
the next fiscal year, as well as estimates for years through 2005-06.
Boothby said that fiscal policy changes will be used to
counteract rising expenses and lower endowment levels. One structural
change will be in tuition levels, a change reflective of nationwide trends
in higher education cost.
The working figure for next year's hike is 4.5 percent,
but Boothby said that the estimate might change during budget committee
deliberations. If it went up by five percent instead, he said, the College
would yield $177,000 in additional revenue.
The budget director said that raising student fees is not
something that the College takes lightly. "In terms of our responsibilities,
we have to be very careful [with tuition hikes]," Boothby said.
Adding students to Bowdoin is another way to increase receipts.
However, according to Clint Huston '02, student representative to the
budget committee, the College risks diluting academic as well as other
"Adding more students is probably not the answer,"
he said, due to "the increased academic costs of doing so."
Boothby said that soon-to-be inaugurated College President
Barry Mills may play an important role in relieving budget rigidity.
"The President is committed to going out and raising
financial aid dollars," Boothby said. "He would like to be able
to raise money for the incremental cost of our diversity and financial
President Mills has committed to raising $39 million over
three years. "If he can do that, we will be able to have a balanced
budget for 2002-2003; we'd actually have a slight surplus," Boothby
said. "But anything he raises toward that helps to bring down the
level of expenditure in financial aid."
According to Boothby, there are several steps being considered
that offer potential relief. First, he said, is the revisal of salary
increase estimates. "Raises will be less," he said.
The budget committee may also limit the IT (Internet technology)
spending increase to $124,000 rather than the proposed $224,000, and similarly
trim the $2.5 million athletic department budget's increase from $200,000
to $100,000. In light of recent studies, Boothby predicted that there
would be a lot of discussion about athletics, including the financial
emphasis placed on them.
Cuts in other areas-essentially stemming from putting off
any new hiring-could relieve almost $250,000, he said.
These reductions have yet to be finalized. "We're going
to look at the proposals that are on the table," Boothby said. "If
we make those suggested changes, the deficits, starting in 2002-2003,
will have an ongoing effect to bring subsequent years down."
"We're at the very beginning of discussion about the
budget," said Rosemarie Roberts, chair of the Budget and Financial
Priorities Committee. "It's early in the process, and we still have
a lot of information to collect.
"The process is about a month earlier this year; we
have to be finished with our recommendations to the President by the end
of December," she added.
Members of the Bowdoin community are welcome to anonymously
submit suggestions of potential cost-reducing ideas at firstname.lastname@example.org.