University announces budget cuts to slash $10M deficit
By Natasha Marar
News Editor
March 26, 2008
 The University of Windsor is attempting to eliminate its $10 million deficit over two years through budget cuts of four to six per cent across all departments.
The budgetary changes are the first of its kind since the mid-1990s.
“It’s just a tightening belt,” said university president Ross Paul.
“Our continuing costs are greater than our continuing revenues,” explained university vice-provost Neil Gold. “There is a gap that develops, which leads to a structural or systemic deficit that is built in.”
“The Board [of Governors] gave us two years to balance the budget because if you cut too much too soon you end up with a downwards spiral,” explained Paul. Similar budget reductions are also expected for the 2009/2010 school year, but will depend on enrolment numbers and base funding from the government.
Gold indicated that although reductions are similar for each faculty, departments might experience larger cuts but “That just depends on their financial record, and those who have done better will face a lesser amount. Certain faculties are in a better financial position than others...so I think there will be some instances were some areas are finding it hard to manage than others.”
Paul assured that the university is trying to minimize the impact of the budget cuts, and that required courses would not be interrupted. He agrees, however, that “There are gong to be fewer options in some [departments].”
Paul and Gold both cited a number of reasons for the deficit.
Decreased enrolment
The number of full-time undergraduate and graduate students for 2007/2008, 12,407, is down eight per cent from 13,496 student in 2006/2007.
According to the 2007/2008 operating budget, the university predicted that enrolment would fall 0.5 per cent from the 2006/2007 to 2007/2008 school years because the double cohort would be leaving the system, but the decline was actually 7.5 per cent or 1,005 less students.
With the double cohort moving onto graduate studies, the university also predicted that full-time graduate enrolment would increase by approximately 20 per cent from 1,205 students in 2006 to 1,500 in 2007. While graduate students did increase, the result was only a 1.1 per cent difference to 1,321 students.
Gold admitted that the university was too “optimistic” in its enrolment predictions for this year. “Our prediction for student retention for year one and year two was less than we expected,” he said at the reduced number of students continuing after their first year. “We now have a more realistic picture of where we are at. So we will be more successful in predicting for next year.”
Gold mentioned that it costs between $9,000 and $10,000 a year to educate each student, between tuition and government grants. “So if we lose 100 students we thought we were going to have [in their second year] we lose one million dollars.”
“Enrolments are our single most important financial consideration,” remarked Paul, who believes that the university’s distance from Toronto is to blame for the lower enrolment numbers.
“The double cohort swelled everybody’s [enrolment] numbers, and we knew there was going to be a fall back,” said Paul. “But the universities near Toronto...didn’t fall back. Their first year entering numbers are just as high as during the double cohort.”
“That’s why are trying to put more emphasis on marketing [the university],” added Paul, who claimed that fall enrolment numbers are promising.
Gold indicated that although most universities experience deficits, the situation in Windsor is different because the amount of local students attending the university is shrinking.
“We don’t have a growing local population to bring in growing local [student] numbers, and since the Toronto and area schools have grown in capacity...we are not drawing in very many students from [Toronto] to make up for the dip in students locally.”
Unexpected expenses
The 2007/2008 budget predicted an increase in base expenditures of 8.1 per cent over the previous year. This was mainly due to “the unforeseen increase in the University’s contribution to the Faculty Pension Plan [$3.3 million] and an operational shortfall of $1.66 million.”
“We have an annual amount we have to pay the deficit to keep the pension healthy and it was more than we expected,” said Gold.
Government funding
The Ontario government’s 2005 budget included the multi-year program, Reaching Higher: The McGuinty Government Plan for Post-secondary Education, which is infusing $6.2 billion into the province’s universities, colleges, and trade institutions.
Paul explained, however, that capital profits such as one-time investments by the government for construction and equipment expenses, and the university’s bond issue of $50 million cannot be used to ease the deficit.
“I think a lot of institutions are facing the same basic [deficit] problem we are facing,” said Gold. “And it’s because our government grant is going up at a very slow rate–two per cent.”
Paul hopes to solicit additional funding, usually reserved for northern Ontario universities, from the government. “I will be meeting with the deputy minister at the beginning of April,” said Paul, who thinks a special case can be made for Windsor since “We are the only university in this region, and if we cut our major programs we are going to lose students in this region.”
The effects
Brian Brown, president of the Windsor University Faculty Association says that faculty members are expressing concern over the announced cut backs. “It’s going to put more stress on the departments because enrolment is going up and they don’t have the resources . . . to teach classes.”
Brown believes that the cut backs will affect the quality of education that professors can deliver. “As enrolments increase that will affect how professors teach,” he said, indicating that professors will have to remove essay questions from exams to accommodate for the additional marking.
“Its very difficult to [make cuts] especially if you are trying to deliver a quality education to students,” said Brown, who claims that “all departments are stretched to the limit.”
Vice-president, university advancement, Amanda Gellman, said it is currently difficult to determine the effect cuts will have on student scholarships and bursaries. Although the university’s contribution to scholarships and bursaries may decline, Gellman assured that past and future fund-raising efforts will secure these needed resources.
“One of the things we will see this year is an increase in the number of scholarships because of the past fund-raising. When a scholarship is endowed it generally takes eighteen months before it is given out because the interest has to build,” said Gellman. “So even though there may be cuts, we will still see an increase in scholarships from the endowments [because of] fund-raising.”
When asked if faculty and student recruitment and retention may become a problem due to the budget cuts, Paul replied, “I hope not—that would be serious. We don’t want to make cuts that will hurt our enrolment obviously, because you are going to create further costs and reductions.”
Brown believes that recruitment and retention may become an issue. “It’s a global marketplace now so you have to make sure you get the best faculty that you can, and . . . that you retain them, and part of that comes with how much they are going to be paid, what the research facilities are like . . . and also what the environment is at the University of Windsor. We want to make sure will are able to retain not only our faculty but the students coming to the University of Windsor,” Brown added.
Looking ahead
“Sometimes you have to find new ways of doing things and it’s stressful to do that,” said Gold. “But [the budget cuts] have the potential to do . . . positive things: firstly, it makes us more financially healthy . . . secondly, it will ensure we are not overspending in certain areas . . . and thirdly, it will give rise to new ideas not only for saving money but for generating new income.”
Gold admits that the university should have made budget cuts earlier. “We knew last April we would have to make these reductions but the amount was unclear.” He feels, however, that this extra time allowed the faculties to prepare for the changes. Faculties submitted revised budgets on March 3, and the Board of Governors is expected to approve the 2008/2009 budget by the end of May.
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