– By Josh Durso
A letter to the campus community and staff written by Hobart and William Smith Colleges President Joyce P. Jacobsen outlines the steps they are taking to address significant budget questions heading into the 2020-21 academic year.
“Moving forward we anticipate a substantial FY2021 budget deficit directly related to the pandemic if we do not take steps to correct for it now,” the letter reads. “Over the past month, a trustee-led financial task force has been working on modeling the possible effects of the pandemic on our finances.”
Jacobsen says the modeling considers a number of scenarios ranging from being able to open for in-person instruction this fall, to having to run a fully remote academic year. “In addition, it considers the effects of the pandemic on our first-year enrollment, our student retention and the financial need of our new and continuing students,” the letter continues. “We anticipate a $10.5M budget deficit under the in-person instruction scenario, and the deficits rise substantially from that point based on the extent to which we must move to more remote learning.”
Officials at HWS expect ‘many things to change’ between now and the end of the upcoming fiscal year, but in order to balance the projected budget – the following steps have been authorized:
- Forgo planned raises, except for those receiving a previously planned promotion;
- For each employee, a 7.7% pay reduction or four weeks of furlough; and
- Overall reduction of employer retirement contribution from 10% down to 5%.
Jacobsen says she has already taken a 20% salary reduction, as well as dropping a number of benefit clauses from her contract. “Our senior staff colleagues are taking a larger pay reduction than the 7.7% percent reduction we are asking all other employees to take. We are also implementing a number of other measures in order to close this budget gap, even as we also anticipate additional expenses in order to prepare and maintain the campus during the pandemic,” she explained. “If our budget situation improves over the year, we will first restore retirement contributions. If our budget situation worsens over the year, we will have to take additional budgetary measures, which may include further compensation reductions.”
A memo from Vice President for Human Resources Sonya Williams gave more detail to the budget cuts, employee furloughs, and reductions outlined by President Jacobsen.
However, she was blunt in looking forward. “While we have every intention of restoring compensation in the following years, we cannot yet predict the extent of financial challenges that may continue beyond next year,” Jacobsen added. “This has been an extremely challenging and upsetting process in arriving at these decisions, and it pains me deeply to have to implement these measures, even though they mean that the Colleges will survive and recover from this setback.”
She thanked staff and faculty for their efforts during what she described as a once-in-a-lifetime event.