PriCom to alter budget to offset aid

Construction projects that are “nearly complete,” such as the new Butler College and the new chemistry building, will not be postponed, Eisgruber said in an interview after the meeting.

When asked about delaying the development of the Arts and Transit Neighborhood, a part of the University’s 10-year Campus Plan, Eisgruber said that the University “ha[s] to look right now at every project.” The neighborhood, which will transform the southwestern corner of campus, was estimated in 2006 to carry a price tag of more than $300 million.

The University is aiming to finalize its decision on which projects will be postponed by the end of the term, Eisgruber added.

Eisgruber is the chair of PriCom, a standing committee of the Council of the Princeton University Community (CPUC) that makes budget recommendations to the University president, who in turn offers a final budget to the Board of Trustees for approval. The committee consists of administrators, faculty and graduate and undergraduate student representatives.

Eisgruber opened the meeting by noting the “extraordinary” circumstances surrounding this year’s budgeting process, explaining that the economic turmoil is unprecedented in PriCom’s nearly 40-year history.

The University’s operating budget, however, is partially insulated from market fluctuations because of the University’s spending model, Eisgruber explained. Instead of tying its annual spending levels to short-term fluctuations in endowment growth, the University sets its long-term average annual spending target between 4 and 5.75 percent.

Because of its conservative spending model and strong endowment returns in recent years, the University will not be forced to make changes to its spending model in the next budget year, Eisgruber said.

“Out of the good years, we reserve some headroom that enables us not to have to cut back immediately,” he explained.

While the target spending rate will remain stable, some of this spending will be redirected to address needs such as higher financial aid expenditures, Eisgruber noted.

“We are seeing other adverse impacts at the same time,” he said, citing the increase in demand for financial aid. A University statement released last week estimated an increase of $3 million to $4 million in financial aid spending this year.

Eisgruber added that “[alumni] donations over time” may also be impacted.

“We continue to believe that our donors are very loyal, but we know that … this may not be the best year for some to give,” he said, adding, though, that Annual Giving income will not necessarily decrease.

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Eisgruber explained that current salary levels will not be frozen or cut. Though he did not announce what the new target rate for salary increases would be, Eisgruber explained that constraining salary increases by 1 percent annually over 10 years would amount to annual savings of roughly $40 million by 2017. He added in an e-mail that the University does not publicize the size of its salary increase pool.

In response to a question by Michael Yaroshefsky ’12 about the effect of budget decisions on undergraduate life, Eisgruber said that the cuts will not affect undergraduate life significantly, though some proposals currently being evaluated by PriCom, like upgrades to Stephens Fitness Center, may be impacted.

“If you take a look back in 10 years, there’s not going to be a major impact [on undergraduate life]” he said, adding that the University considers the impact of its decisions on both current and future students.

Impact on graduate student stipends

At the CPUC meeting last week, Eisgruber noted that graduate student stipends may not necessarily increase at a rate that would keep up with the rising cost of living. At the PriCom meeting, Graduate Student Government (GSG) Academic Affairs Committee co-chair Silvia Bulow GS urged PriCom to prioritize graduate stipend increases over increases in pay to faculty members.

Because graduate students do not have the savings or income levels of faculty members, she said, it is critical for the University to maintain graduate students’ salary increases both for competitiveness in graduate student recruitment and for the well-being of current students.

“The rainy day is here, and we don’t have a lot to fall back on,” she said, adding that “the cost of living is increasing.” Bulow also noted that Princeton graduate student stipends are about 5 percent lower than those paid to their counterparts at Harvard.

Carolyn Ainslie, the University’s vice president for finance and treasurer, added that the procurement office will look to augment savings by bolstering efforts to negotiate the mass purchase of additional commodities, noting that “there are opportunities in a time like this” to push for lower prices.

Graduate students also urged PriCom to consider improving dental coverage, bolstering spending for graduate student travel to conferences and increasing funding to University Health Services, in particular, Counseling and Psychological Services.

While the GSG had hoped to augment general graduate student attendance by offering free pizza before the meeting, a low turnout left the GSG with a stack of untouched pies.