Some Yale departments will shed entire programs and projects due to budget cuts this year, not just trim as they have been doing since last year.
Instead of asking all departments to reduce costs in equal proportion, the University is now targeting some specific units for deeper reductions than others, administrators said. The University’s new strategy for cutting costs on the heels of after two rounds of across-the-board cuts designed to help close a $150 million gap in the operating budget caused by the endowment’s 24.6 percent tumble.
The strategy of cost-cutting has shifted in part because further blanket reductions would hit some departments’ core academic missions harder than others, and so they would cease to be effective, Provost Peter Salovey said.
“Across-the-board cuts can only take you so far,” he said. “Now we’re really looking at each unit and department. If it had to do with less, what could we cut?”
The shift in strategy also stems from a realization that forcing departments to prune more social events, refreshments and other small expenditures might save some money but significantly hurt morale, Salovey said. Finding almost $150 million in savings, he added, will require much more significant cuts.
So administrators in the Provost’s Office have begun meeting with the heads and business managers of each department, unit and school in turn, attempting to identify which ones can absorb further cutbacks. Eventually, the differential cuts could force some departments to postpone, downsize or even cancel entire programs, from special research projects to local outreach initiatives, though administrators said they were not yet sure which departments would face deeper cuts.
The newest cuts, which will be negotiated and implemented through April, will be made in addition to 5 percent reductions to the current year’s non-personnel spending and 7.5 percent cuts in personnel and non-personnel spending.
Twelve department heads said each successive round of cuts has been harder to absorb as the cost-cutting begins to threaten vital department activities such as teaching.
“Once all of the things that are arguably non-essential are gone, what are they going to force us to do?” French department chair Thomas Kavanagh said. “We just don’t see places where we can cut.”
Until now, the administration had pursued blanket reductions as the most equitable way of squeezing savings out of the University’s budget. Administrators said the new strategy will require re-examining the University’s priorities for the next three to five years to ensure Yale is still strong in certain areas when the endowment recovers.
Though the University will continue to support financially initiatives it deems important, Deputy Provost Lloyd Suttle said, it does not have the funds to pay for every single program a department wants to pursue.
“There’s a lot of soul-searching,” Suttle said. “We’ve got enough money to do anything we want to do, we just don’t have enough to do everything we want to do.”
Suttle said administrators will consult with affected departments as much as possible. But ultimately, he added, University officials must decide which programs are most worth maintaining.
So far, that has meant asking departments with accumulated savings and endowed funds of their own to dip into those assets, freeing up funds from the University’s general operating budget to cover other costs.
“They’ve been saving up for a rainy day,” Deputy Provost Charles Long said. “But it’s a monsoon.”
Long said he did not yet know how many departments would face extra cuts.
Members of the Yale Corporation will review the University’s finances at a meeting in December.