Carleton’s Budget Planning

16 January 2009

Dear Carleton Faculty, Staff, and Students,

Though I have spoken with many groups in recent weeks about Carleton’s budgetary deliberations, it has been some time since I have sent out a summary of where we are in our deliberations and the time seems right at this time to do so.  I want to begin by thanking everyone in the Carleton community for the many suggestions for cost-savings you have given to us and by thanking you all the more for the spirit of cooperation and generosity which has characterized all that you have done for Carleton during these difficult financial times.

Difficult, demanding, uncertain financial times do continue, and about these we are reading daily in local and national newspapers.  Colleges and universities across the country have announced moves, often dramatic moves, to cut expenses.  Fortunately, Carleton’s endowment performance (down about 20% July 1 to December 31, when the public equity markets were down 35%) and the generosity of our alumni and parents continue to sustain us, although at a lower level than in the recent past.  Because our endowment spending formula is based upon the endowment values through the preceding September, we will not feel the brunt of the declines since September 2008 until the fiscal year that begins in July 2010. 

Our budget process for next fiscal year (FY2010) is one that began already winter and spring of 2008, when the Budget Committee (a standing subcommittee of College Council, whose membership includes students, staff, and faculty) began to meet in preparation for delivering their recommendations to the Administrative Council at the conclusion of the Spring Term.  We on the Administrative Council have continued to work with the Budget Committee and with College Council to shape new budget models, which have been updated almost weekly. We have needed to reshape the present and future budgets because of the pace of changing economic and financial conditions.  The Budget Committee will this month recommend a final budget for FY2010 to College Council.  The Council will meet in early in February to consider recommending this operating budget to the Board of Trustees for its consideration during its meeting in mid-February.

Simultaneously, many groups have been at work on short- and long-term ways for Carleton to reduce expenses or increase revenue in the current year, next year, and in years to come.  Thus, the ECC has formed two subcommittees, one to consider Winter Break programs and a second to consider ways to equalize student enrollment over our three terms.  College Council, earlier this month, endorsed the creation of two task forces, one to consider outside speaker costs and ways for all to benefit from these speakers’ visits to Carleton, and a second to consider how best to take advantage of our facilities during the summer.  More work of this type is surely to be required as we seek to close the budget gaps now forecasted for FY2010 and beyond.

Administratively, every division of the College has been asked to reduce their operating budgets for the current year (FY2009), in amounts to total $500,000, and for the coming year (FY2010) by 5% below current levels.  The 2009-2010 operating budget that the Budget Committee will be recommending to College Council will include a very modest increase in compensation for faculty and staff to cover increases in benefit costs.

We have aimed throughout to retain the very high quality of a Carleton education.  To this end, financial aid will be increased for the coming year at a level at least as high as our increase in the comprehensive fee, with an additional $250,000 to cover the cost of the Carleton Access Scholarship Program which we began last year.  Similarly, we have continued our recruitment of tenure-track faculty members at the urging of our Board of Trustees, which believes the slow-down in hiring at other places gives us a strategic advantage in the recruitment of faculty. Our recruitment this year includes the final four tenure-track faculty members in our planned increase of the Carleton faculty by fifteen tenure-track members. 

After the Board of Trustees meetings in mid-February, we will again let you know where the budgets for the coming year and beyond stand.  For now, thank you again for the remarkable support you have shown for our continued work in maintaining the very high quality of a Carleton education.

Rob Oden

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