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>  News Releases >   2009 >   February

Dartmouth announces budget-reconciliation plan

Dartmouth College Office of Public Affairs • Press Release
Posted 02/09/09 • Media Contact: Roland Adams (603) 646-3661

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President James Wright Sets ‘Protecting Excellence’ as the Highest Priority: ‘We have been guided by our commitment to protect the excellence of the academic programs and to continue to provide access for the best students regardless of their financial means’

College to Protect Tenure Positions and Increase Financial Aid and Tuition; 60 Staff Members Face Layoffs as a Result of Reorganizations

Dartmouth today announced a budget-reconciliation plan to decrease its $700 million operating budget by $72 million between now and 2011. The Board of Trustees has endorsed the Administration’s plan, which includes a reduction of $47 million in the $450 million College-only budget (excluding the three professional schools: the Dartmouth Medical School, the Thayer School of Engineering and the Tuck School of Business).

To read about the full plan, and hear an audio interview with Dartmouth President James Wright, go to http://budget.dartmouth.edu

In a letter to the community Monday following a weekend Board of Trustees meeting, President Wright announced that the Board had endorsed the plan as well as Dartmouth’s strategic priorities: to preserve the excellence of the academic programs and to maintain its commitment to need-blind admissions and financial aid for U.S. and international students.

Under the budget-reconciliation plan, budgets will be reduced by $35 million in fiscal year 2010 for a total of $47 million through 2011. In addition, no tenured or tenure-track faculty positions will be eliminated; the financial aid budget will increase 13 percent by $8 million in fiscal year 2010 to an estimated $72 million, and undergraduate tuition will increase 4.8 percent (see full news release). Almost half of undergraduates now receive some form of aid. Last year Dartmouth expanded its financial-aid program to offer free tuition to students from families earning $75,000 or less. Applications for the Class of 2013 have set a new Dartmouth record this year (more than 18,000).

The worldwide economic downturn has resulted in sharp declines in endowments for colleges and universities. Dartmouth relies on its endowment to fund about 35 percent of its College-only operating budget. In the six months ending Dec. 31, 2008, investment returns dropped 18 percent, leading to a $700 million drop in Dartmouth’s endowment value to $3 billion.

Last fall, Wright asked the Dartmouth community to participate in a bottom-up process to contribute ideas for budget efficiencies. Hundreds of suggestions were submitted through College-wide open forums, and at the divisional and departmental levels. The budget-review process has involved three main committees: the Budget Committee of deans and vice presidents, the Faculty Committee on Priorities and the Student Budget Advisory Committee. The budget-reduction plan was developed by Dartmouth's senior officers and finalized by the President.

Over the last several weeks Dartmouth has announced decisions to delay several construction projects and on Monday shared plans to reorganize services, reduce activities in a number of areas, and examine opportunities for additional efficiencies.

Despite steps introduced last November to reduce compensation expenses, which represent half of Dartmouth’s operating budget, as well as non-compensation expenses such as travel and discretionary budgets, Dartmouth this week will lay off 60 staff members through reorganizations that involve the elimination of about 150 positions. Twenty-eight other staff members will work reduced hours. Steps taken last fall, in the effort to minimize the number of potential layoffs, included a retirement incentive offer, which 70 staff members accepted in January, and a hiring freeze on most vacant positions, which will continue to be in effect.

James Wright, President of Dartmouth, said, “Approving these reductions, especially those affecting staff employees, has been one of the most difficult decisions of my presidency, but they are necessary to maintain Dartmouth’s strength and advance our academic mission.” He added, “In making targeted reductions, we have been guided by our commitment to protect the excellence of the academic experience for undergraduate and graduate students, to provide support for faculty and student research and scholarship, and to continue to provide access for the best students regardless of their financial means.”

Ed Haldeman, Chair of the Dartmouth Board of Trustees, said, “On behalf of the Board of Trustees, I want to express appreciation to the entire Dartmouth community, as the College Administration begins implementing its plan to bring expenses in line with revenues. The plan, developed with input by community members, requires job eliminations as a result of reductions to non-core programs and services. We appreciate the service and dedication of the staff members who will be leaving Dartmouth. The College will be as supportive as possible of these individuals through this difficult period of transition. The worldwide economic downturn has challenged all of us – as individuals, as employers and employees – to consider how to do more with less. We share a common commitment to preserve and enhance the academic excellence of Dartmouth, and to provide financial aid to ensure access for the best students to a Dartmouth education.”

Additional detail on Dartmouth’s budget-reconciliation plan:

  • All administrative areas of the College are reducing workforces. Sixty people face layoffs through elimination of staff positions as a result of reorganizations, most effective April 10, 2009. The layoff package includes two weeks of pay for each consecutive year worked at Dartmouth, with a minimum of four weeks and a maximum of 52, plus a lump sum payment towards the full cost of maintaining health benefits for three months, career counseling, and consideration as internal candidates for open positions through this calendar year.
  • There will be a reduction in hours for 28 other staff employees, with a payment to offset any increased cost for health benefits through the end of the calendar year.
  • The College will freeze most salaries for fiscal year 2010, which begins July 1, 2009. Exceptions include adjustments for faculty promotion and tenure and supplemental payments of $1,000 for full-time employees earning $50,000 or less.
  • No tenured or tenure-track positions will be eliminated. However, approximately one-third of faculty searches in Arts & Sciences will be postponed with a goal to fill these positions over the next three years. The full array of off-campus programs will be maintained. Dartmouth remains committed to offering small classes taught directly by Dartmouth faculty. The College will also maintain full support for graduate and undergraduate research, faculty scholarship and research, and for graduate and professional programs.
  • Undergraduate tuition for the 2009-2010 academic year will be $38,445, an increase of 4.8 percent. The financial aid budget will increase 13 percent next year to an estimated $72 million. Professional school tuition will increase 4.8 percent at Thayer, 4.9 percent at Tuck and 6 percent at DMS.
  • Decisions have been made to continue some building projects and to defer others. Construction of the Class of 1978 Life Sciences Center will continue. Plans for the Visual Arts Center and the C. Everett Koop Medical Science Center remain under review. Deferred projects include the Thayer Dining Hall replacement, the Class of 1953 Commons, renovation of the West Stands at Memorial Field, and renovation of a second sorority on East Wheelock Street.

The $47 million in reductions over the next two fiscal years reflect decreases in compensation ($28 million), building project expenses ($10 million), and non-compensation costs ($8 million), as well as increased revenue ($1 million). The majority of the decrease in compensation results from the freeze in salaries for fiscal year 2010.

President Wright wrote in his letter to the Dartmouth community, “I am confident [however] that with these changes Dartmouth is positioned well for the future. These steps are necessary to protect resources that provide an unparalleled educational experience, inside and outside the classroom, for all who come to teach and learn and for the continuing employees who sustain the work of Dartmouth, both now and in the future.”

Dartmouth has television (satellite uplink) and radio (ISDN) studios available for domestic and international live and taped interviews. For more information, call 603-646-3661 or see our Radio, Television capability webpage.

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