March 1, 1997
It's March, a time when the fancy of many administrators on campus turns to next year's budget. While deans, directors and department heads across the university can look forward to the arduous task of budgeting for the next fiscal year (beginning July 1, 1997), the rest of the Tulane community can savor a long-awaited 3.5 percent increase in the salary pool.
The salary increase for faculty and staff, which is part of the general guidelines for the 1998 budget that was approved by the board of administrators in November, comes after a one-year salary freeze in the current budget and is consistent with the two-year plan that was shaped during the Tulane 2000 process.
"The two elements of a great university are a great student body and a great faculty and staff," said Tulane President Eamon Kelly. "In order to be able to attract and retain a great faculty and great staff you have to compensate them competitively." Kelly, who during Tulane 2000 advocated for, but failed to get, faculty and staff raises for the current fiscal year, said, "Of all the goals we have achieved at this university, the one I am least satisfied with has been the level of compensation. I think this is a very modest step in terms of addressing that problem."
Beyond that modest step, the 1998 budget looks very similar to the current budget, said Tony Lorino, senior vice president of operations and chief financial officer. "All of next year's budget assumptions are generally in agreement with the two-year plan that was passed by the board of administrators and University Senate in January 1996," said Lorino. "There are no surprises in this budget," agreed Yvette Jones, vice president of finance and operations, noting that outside of the salary pool, the only significant differences from this year's budgeted expenditures will be a $200,000-compensation adjustment for professional librarians and a $500,000 allocation for "an incremental adjustment in information technology."
An additional reduction of $900,000 in travel and consultant fees, which was budgeted for but not made in the current fiscal year, will again be budgeted for next year, said Jones. Lorino added that those reductions may also include savings through renegotiated insurance contracts. According to Lorino and Jones, the cumulative pool for the Faculty Hiring Incentive Plan will be increased by $250,000, library acquisitions will be increased by $100,000 and scholarships and fellowships will be increased by $1.1 million, as they were this year.
Also, a $300,000 deferred maintenance budget and the budget for the medical center's faculty practice plan are among the current expenses that will remain the same for next year. In terms of revenue items, Tulane will again raise undergraduate tuition and fees by 4 percent, a figure Kelly predicts will be "at least one percentage point" below the university's competitors. "There has been a real concern among various senate committees that our sticker-price level of tuition ($19,670) was too high," said Kelly, "and that while we provide a financial aid package that effectively makes our tuition less than that of our competitors, we may be frightening away very able students with that sticker price."
The 4-percent increase will apply to the schools of Architec-ture, Business, Engineering, Law, and Newcomb, Tulane and University Colleges. Jones said, however, that when fees for room and board, the student health center and recreation are calculated, the actual cost of attending Tulane will increase by only 3.7 percent. While tuition in the School of Medicine will increase by 3 percent, the School of Social Work will see an increase of 12 percent in its tuition. "We are below the statistical mean and underpriced in comparison to our peers," said Suzanne England, dean of social work. "We had a frozen tuition in the '80s, and we hope to reach the mean in the next several years and have more competitive salaries for our faculty."
The School of Social Work's tuition, which is currently $16,000 for a two-year program, is more than $9,000 below the mean of private schools. England said she hopes her school to be on par with its competitors in five years. The largest decline among next year's revenue items will be a decrease in indirect cost recovery, the compensation for overhead and other expenses that are incurred during federally funded research projects.
The rate of indirect cost recovery, which is determined by the federal government, is currently at 51 percent of the dollar award of a grant. Next year, said Lorino, that rate will be adjusted down to 49 percent. The loss in indirect cost recovery does not reflect a decrease in research activity, said Lorino. Lorino also said that the new budget will project a $600,000 net decrease in athletics revenues.
"That decrease," said Lorino, "reflects the discontinuance of the $1.6 million endowment subsidy that appeared as a one-time revenue item in this year's budget. That loss, however, was partially compensated for, said Lorino, by the new four-year corporate sponsorship of athletics by Columbia HCA. That sponsorship will be paid out at $1 million annually. According to Lorino, the budget will go before the board of administrators as a detailed report for final approval in May.
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