U. endowment projected to rise by 10 percent during FY2010

The University will not, however scale back the 7.5 percent budget cuts that it has instituted for this year and for next year. Instead, the University will use any investment gains to grow the endowment. The Board of Trustees set a spending band recommending that endowment outlays fall between 4 and 5.75 percent of the endowment’s total value. But during the current year, the University is expecting to spend 6 percent of its budget, Eisgruber said.

Eisbruger, Executive Vice President Mark Burstein, Vice President for Finance and Treasurer Carolyn Ainslie and Vice President for Human Resources Lianne Sullivan-Crowley all expressed optimism about the new projections.

Eisgruber noted that endowment losses, which the University reported at 22.7 percent in September, were better than projections from spring 2009, when losses of 30 percent were expected.

“We are turning the corner,” Eisgruber said. “As a result of the work that has been done, we are in the happy position of being able to report that we are genuinely turning a corner, and we do not have to announce that we are looking at another round [of cuts] ahead of us.”

But, he cautioned, the University still “urgently needs to maintain tight budget discipline and ... continue to search for new efficiencies and savings” in order to “preserve the human capital that is critical to its mission.”

One factor putting additional pressure on the budget is that the financial need of undergraduates is greater than anticipated, Eisgruber said. Slightly more than 60 percent of students in the Class of 2013 are receiving financial aid, whereas the Committee on Undergraduate Admissions and Financial Aid predicted last year that only 59 percent would require aid.

The University continued to meet its overall financial goals, though, as every academic and administrative unit stayed within its budget for FY2009, Eisgruber reported.

In light of the budget situation, Eisgruber said, the Priorities Committee (PriCom) recommended a 3.3 percent increase in the overall fee package for the upcoming academic year, the second-lowest increase since FY1968. Last year, PriCom recommended at 2.9 percent increase in the fee package.

PriCom also recommended increasing base salary pools by 1.5 percent for all faculty and staff members, up to a maximum of $2,000. Sullivan-Crowley noted that members of the President’s cabinet would not receive salary increases.

PriCom also endorsed a 0.97 percent increase in base stipend levels for graduate students.

“Universities are made great by the people who are there,” Eisgruber said, adding that “in order to be able to continue to attract and retain the kind of employees that we need, we’re going to have to need to move back to pre-recession salary pools.”

Burstein also emphasized the need to lower energy costs and discussed a range of cost-cutting initiatives.