University faculty and staff at the spring convocation address on Jan. 30 learned of proposed budget cuts to affect the university in the 2021 fiscal year.
The proposed budget cuts were introduced by interim president Dr. Paul S. Adams, speaker of the event. The university seeks to generate $6 million in savings.
The major proposed changes to the budget include an incentivized retirement program, a one percent reduction in salary, and a one-year reduction from eight percent to four percent for the university’s retirement contributions.
A preliminary 2021 fiscal year budget will be presented to the Board of Trustees on March 6. Along with a budget for 2021, the university is also preparing a five-year financial plan.
The preparation for this new budget began in August 2019. Adams also gave a budget update address in October, which first introduced the idea of budget changes to the staff and faculty.
“Last year, we ended in a deficit position, which we really haven’t done in a lot of years,” said Adams. “Given some enrollment shortfalls, we didn’t meet all of our revenue targets.”
The estimated gap between projected revenue and operating cost is $11 million. The annual operating cost is $105 million.
Sixty percent of the university’s budget is assigned to salary and benefits. In the last four years, the university saw a 19 percent growth in gross revenue, with a 23 percent growth in operating expenses, and a 24 percent growth in the employee population.
“We probably accelerated our growth of personnel a little faster than what enrollment was going to catch up to,” Adams said. “We’ve had a bit of an imbalance, so what we need to think about is how we can right-size that, how we can adjust our personnel to fit the size of our enrollment.”
The university hopes to remedy the situation through voluntary departures rather than elimination of positions.
According to Adams, the first-year class of 2023 did not meet the university’s projected size, leading the university to believe that this fiscal year will end in deficit as well. The full-time, first-year class size in 2018 was 613 students, while this year’s class size was 532. This is a 13 percent decrease.
The university expects that its budget will not return to normal until the next fiscal year.
“We all have to live within our means,” said Adams. “The message that I am trying to convey to the campus is that we need to adjust ourselves so that the university can live within its means. It’s important; we don’t have an infinite budget, and we can’t raise the tuition on our students.”
According to the university, it is unlikely that donors can be depended on in the next few years, as many of the university’s most generous donors are currently fulfilling commitments to last year’s Gateway to the Future campus construction campaign.
The incentivized retirement program will be offered to faculty and staff who are 65 years and older and have been working for Wilkes for at least 10 years. This plan is expected to garner $1.7 million in savings. More details of the plan are expected on March 9.
The salary reduction of one percent is valued at $477,000. The retirement plan reduction is valued at $1.3 million. Division heads have also identified $2.4 million in reductions in other areas.
Adams lists heightened college recruiting, increased price sensitivity, competition in other countries for international students, as well as a decline in traditional college-age students.
Dr. Donald Mencer, associate professor of chemistry and chair of the Faculty Affairs Council (FAC), spoke about faculty’s concerns.
“Everybody that works at Wilkes cares about the institution, and we want to be sure it is successful in the future,” he said. “At the same time, anytime people start to talk about items that affect paychecks, they become concerned.”
According to Mencer, faculty worries more for the staff rather than themselves.
“Faculty members that are tenured have a degree of protection that staff members are not afforded,” he explained.
The FAC will discuss the proposed budget changes at their next meeting.
According to Mencer, people seem to be more concerned about retirement changes rather than salary changes.
“When you lose retirement match, it affects your ability to feel safe and comfortable for retirement,” said Mencer. “I don’t think anyone is panicking yet, they realize this is ideas that are being considered, but they know that the decisions are not finalized.”
Jeanne Rabel, chair of University Staff Advisory Committee (USAC), mirrored Mencer’s comments.
The USAC plans to meet the first week of February, and much of the discussion will be focused on the budget announcement.
“My plan is to have a dedicated portion of that meeting to making sure I get a better sense of what staff are feeling across campus, what are the things they are hearing, what is of most concern to them at this point in time,” she explained.
While staff members are concerned about the possibilities of layoffs, however, Rabel believes that the university puts its community members, employees and students, first.
Keith Klahold, strength and conditioning coach, explained how the Athletics department feels about the proposed changes.
“Nobody wants the budget cuts, but we have to make it work to help get the university in a better place financially,” said Klahold.
Dr. Mischelle Anthony, TITLE, feels that Dr. Adams’ announcement was alarming. She is concerned about budget cuts to different department’s budgets, which already has strict spending.
The salary cut and the retirement contribution cut are estimated to only last one year. According to Anthony, there is low confidence in the cut remaining temporary.
“I’ve been hearing that we think [the changes] will be permanent,” she said. “I should note, that for me personally, in the next 16 years I work here, that if I retire at 67, I will lose over $50,000.”
“One of the reasons to work in higher Ed., is those contributions to our retirement because we get paid less teaching than out in the industry using our skills,” she continued “Obviously we have a love of teaching, and it is very rewarding work. One of the ways the university rewards us for this rewarding work is that contribution.”
Anthony plans to suggest to the Budget Task Force to consult with other faculty in neighboring universities.
“The across the board cuts are not advisable,” she said. “I think that if perhaps the people making more than $100 thousand are able to take more of a cut in salary, even if it is just 1.5 or 2, then we allow those who make 50 thousand or less to take no salary cut, I think that would be really important.”
Anthony emphasized her willingness to take a salary cut, emphasizing that the problem is not about herself but rather everyone as a whole.
Dr. Kenneth Klemow, TITLE, says that the changes being discussed are more extreme than he has seen in the past.
“I am disappointed that this has happened, but I guess the question is how do we fix this moving forward,” he said. “From my perspective, most of the problems are caused by the fact that we are just not bringing in enough students, and especially enough good students.”
Klemow explains that by good students, he means confident, likable students who will benefit from the Wilkes education.
“The thing that frustrates me is that I know we have a very good product to be able to sell our students,” he explained. “I think there are a 1001 reasons for students to come to Wilkes, for whatever reason they are not choosing us.”
Klemow thinks that the next steps are creating a situation where the university is being advertised better to prospective students.
Adams says he understands the faculty and staff’s anxiety towards the situation but wants to emphasize the university seeks to protect the value of education first and foremost.
“[Our second goal] is to ensure that we do no harm to our best sources of revenue,” he said. “Do not impact positions that are influential to our campaign and enrollment goals.”
He also explained the importance of keeping tuition prices low, while also remaining sensitive to the needs of the staff.
“Wilkes is experiencing what colleges and universities across the country are experiencing, and that is a shrinking demographic of traditionally-aged students, along with increasing costs,” he said. “We are all struggling to do this work and in an imaginative way, but there are a lot of things in the external environment that are influencing the ways all colleges and universities are doing their work.”
“There is anxiety with this stuff,” added Gabrielle D’Amico, head of Communications. “But this is Wilkes looking forward a bit and anticipating what the next couple years are going to look like in the next couple of years in the higher education landscape.”
Kirsten Peters, Parker Dorsey and Ben Mandell contributed to this report.