July 16, 2015
Budget Message from Kathy Cobb and Dave Christy
Dear Members of the Baruch Community:
We face a financial challenge for this new fiscal year. CUNY has reduced the base budget of all the colleges by 3% to cover increased costs for fringe benefits and other costs that were not funded by the state. For Baruch, this is slightly over $3.7 million dollars. Additionally, CUNY is holding in reserve the revenue generated from this year’s tuition rate increase as a resource to be used to cover costs associated with a new PSC contract. This is because the state also did not provide funding for a new contract. So for this year’s budget allocations, we have no new resources to allocate, and a base budget cut to manage.
Our Plan for 2015-16:
Last year the College addressed some long-term structural issues in our budget to prepare for the anticipated final year of tuition increases and the cost of a new contract. We developed our plan with the conservative assumption that the state would not fund the contract, and would not provide for ongoing tuition increases after FY 16. We also had to manage the revenue shortfall that is the result of the drop in our graduate enrollments from 2010 levels. As a reminder, last year’s plan reduced base budgets, but also used FY 15 Compact funds from the scheduled increase in student tuition to address structural budget issues and to mitigate the impact of reduced graduate student tuition revenue. We did not release any salary savings from vacant positions. We also began a long term strategy to refresh our graduate program offerings, and develop innovative marketing and recruitment strategies for those programs.
Last year’s financial planning now enables us to mitigate some, but not all, of the impact of this year’s base budget reduction and absence of additional resources. Our enrollment revenue collected last year was slightly higher than we projected, resulting in a modest increase to our reserve account (CUTRA), which we can now apply to this year’s budget.
The elements of the plan for this fiscal year are as follows:
- We will cut our base budget by only 1%, instead of 3%, or a total of $1.2 to $1.3 million. No cuts will be applied to lump sum special program allocations or Academic Excellence Fees. The cut will be across the board to all divisions.
- We will cover the remaining budget cut using a combination of our CUTRA reserve and salary savings from vacant positions.
- No vacancy savings will be released.
- No new faculty and staff positions will be approved unless departments fund those positions by restructuring.
- Any requests to replace full-time faculty and staff must be strategic. Departments will need to provide justification for filling the vacated position based upon a demonstrated essential role that cannot be met with existing personnel and based on enrollment data and college priorities as expressed in our strategic plan. Departments are urged to review how they deploy all staff.
- We will continue to review our operations to look for savings and increased efficiencies.
- We will continue our efforts to increase graduate enrollments and grow alternative revenue sources.
- We need to develop a plan for AY2016-17. To prepare for the possibility of no authorized tuition increase in FY 17, our financial plan, including a projected modest enrollment revenue growth, allows us to end FY16 with a smaller CUTRA reserve than we currently have, but some funds that can be used to carry us through FY 17, assuming steady state in our expenses and assuming that we begin to make a recovery in our graduate enrollments.
Working together, we are confident that we can manage the challenge presented by the budget allocation this year and by the uncertainties regarding future budget allocations in the absence of a renewal of the multi-year, rational tuition agreement. Our objective is to create a sustainable financial model not only for next year but for the out-years as well.
Thank you for your efforts,
David Christy, Provost and SVP for Academic Affairs and
Katharine T. Cobb, VP Administration & Finance
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