The Student News Site of Macalester College

The Mac Weekly

The Student News Site of Macalester College

The Mac Weekly

The Student News Site of Macalester College

The Mac Weekly

Wheaton stresses confidence over next year's budget

By Daniel Kerwin

Earlier this week, Vice President for Administration and Finance David Wheaton presented Macalester’s proposed budget for the 2009-2010 academic year. Although the economic downturn will cause necessary changes in the budget, Wheaton stressed that Macalester is relatively well situated to manage its way through the crisis. However, since the global economic situation is still developing, it is hard, to predict just how deep the effects of the economic crisis will get.

“This is a most unusual year, and the circumstances that make it unusual are still evolving,” Wheaton said.

He emphasized that the proposed budget is aimed at preventing any major changes in the student experience at Macalester and at keeping in line with the college’s traditional values.

“We are committed to building on our historic strengths to ensure a relevant, robust experience for our students going forward,” Wheaton said in the presentation. “In some sense we want to continue what we do. We don’t want to be name brand X college in St. Paul, we want to be Macalester.”

In line with its values, the college is committed to keeping tuition fees as low as possible while also maintaining high levels of financial aid. The budget calls for a net tuition decrease of around three percent, with a 12 percent increase in financial aid — much larger than the average year.

Compared to other similar institutions, Macalester is not seeing many dramatic changes as a result of the faltering economy. According to Wheaton, other institutions have resorted to layoffs, stopped capital projects midstream, undergone additional borrowing to meet cash needs and have been selling their assets.

The ramifications at Macalester will be less visible. Maintenance and repair of campus buildings will slow, college sponsored travel will be reduced and Macalester Today’s yearly issues will be lowered to three to save on mailing costs.

Overall there will be an average of 5.5 percent cuts in program budgets as well as other small measures across the board.

The college is not planning to cut any positions, but there will be an effort to limit the increase in expenses related to salary. Faculty will still see salary increases if they are on the lower end of the pay scale or get a promotion, but all other faculty salaries will be frozen with no new faculty or staff positions created. There will, however, be an increase in wages for student employees, a move in line with the increase in financial aid.

Next year’s budget is still purposefully conservative, constructed around an estimate of 1810 students,

when the current prediction for next year’s student body is 1,829.

However, given the current economic climate it is hard to predict the size of the incoming student body, though Wheaton assured that “students and families will continue to see a B.A. as an important thing to have.”

The college’s endowment has taken a hit in the economic downturn, resting at $475 million in late February compared to $675 million in June of last year. However, because of the conservative wayin which money is drawn from the endowment, the effect of this hit will be delayed, and will not be felt until a few years from now.

Overall, the proposed budget will generate a one percent increase in total income. According to Wheaton, the college has seen an increase in income every year since the mid 1970s, and although a one percent increase is relatively small, it will do in the present circumstances.

“It would be hard for us to live with a one percent increase in revenue year after year,” Wheaton said.

The economic downturn has caused the college to amend its predictions for the trend in income and expenses in the coming years. For instance, the original predictions showed an income of $107 million for the college for the year 2014, but the estimate has been revised to $91 million.

Although the proposed budget is seemingly set for now, ongoing fluctuations in the economy will continue to pose a risk to the model.

“This is all very sensitive to how financial markets will develop as we keep moving forward,” Wheaton said. “We have some more work to do; we want to do it in a time frame that will allow us time to consider our choices.

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