New cuts to affect academics

The University will cut into both administrative services and academic programs and lay off more staff starting this year as it seeks to recover a budget deficit of more than $100 million, University President Richard Levin and Provost Peter Salovey announced in an e-mail to faculty and staff Wednesday.

The cuts mark the deepest foray yet into Yale’s academic offerings since the recession hit in fall 2008, and department chairs interviewed said they anticipate that preserving educational programs will be more difficult during this round of cuts.

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To balance a budget devastated by the endowment’s 24.6 percent plunge during the 2008-’09 fiscal year, administrators have already slowed the pace of expansion into the West Campus, nearly halved the cost of YaleNext (an overhaul of the University’s administrative systems) and frozen most construction projects. Though last year’s budget reductions closed more than half of the original $350 million gap caused by the endowment’s 24.6 percent plunge, Yale’s departments will have to cut more deeply this spring as the recovery they had hoped for never materialized.

Last year’s two rounds of across-the-board departmental cuts mostly hit entertainment and travel funds, but this year, everything from the salaries of top administrators to the number of new graduate students will be adjusted to save money.

“We’ve had cuts before, but this one will require a much more University-wide approach and more collaboration,” Salovey said in an interview Wednesday afternoon. “Before, you were cutting the big chunks, like construction projects. Now you have real work to do.”

Levin said a combination of cost-cutting measures that are, for the most part, worth less than $2 million each will bring down the budget deficit for the 2010-’11 academic year to just over $100 million. From there, it will be up to individual departments and professional schools to cut the remaining $100 million from their individual budgets.

THE CUTS

In addition to adjusting salaries and reducing benefits for Yale employees, the new budget guidelines call for reducing the number of new Graduate School students by 10 to 15 percent, rolling back funding for research and outreach programs, and capping International Summer Award funds for students studying abroad.

With input from Graduate School administrators, each department has the discretion to decide how many fewer graduate students it will accept in the coming year, Levin said, while still meeting the overall target. The overall number of new admits will decline, he said, but the number of graduate students may stay flat or actually increase in some departments, such as Ecology and Evolutionary Biology, which has several research positions that are currently available because of funding from the federal stimulus package.

The move to cut doctoral students is consistent with measures taken by other major universities, including Columbia and Emory, Graduate School Dean Jon Butler said. Each program will likely lose one or two incoming doctoral students, he said, adding that the exact reduction in each program will depend on how many students it has enrolled recently.

Yet graduate student stipends will continue to increase by 2 percent to keep Yale’s programs attractive to good students, Butler said.

“The University needs to maintain its position in attracting the best-quality Ph.D. students,” he said.

The salaries of Yale officers, deans and other highly compensated employees who report directly to the officers will be frozen. Staff and faculty will receive a 2 percent raise — a slight overall increase from last year, when raises for salaries under $75,000 were capped at 2 percent and raises for those over $75,000 were capped at $1,500. Managerial and professional staff will receive their raises on Sept. 1, two months later than usual, allowing Yale to save the two months of increased pay.

Meanwhile, staff will have reduced vacation and sick days: Staff will now receive 24 days of personal and vacation days and six paid sick days. The bonus vacation program will be phased out, and vacation time carryover will be reduced, meaning that staff will lose unused vacation days at the end of each fiscal year. . But they will now be able to take up to 26 weeks off without forfeiting their pay if they have an extended illness or injury.

“This is a long-needed and well -deserved change,” Levin and Salovey wrote in the memo.

Research groups that receive money from the central University budget will be scaled back, a move the Provost’s Office projects will save about $1 million, Salovey said. He added that most research programs are funded by federal grants, not by Yale. A department, program or professional school can always choose to trim or eliminate programs, as the Law School has done with its visiting scholar and seminar programs, Levin added.

In addition, the business, human resources and information technology services that currently serve the offices of Levin, Salovey and Vice President and Secretary Linda Lorimer will merge to cut costs and increase efficiency. After administrators are satisfied that the same services can be delivered at a lower cost, they will consolidate more administrative services throughout the University beginning in the 2011-’12 academic year, Salovey said.

Administrators have left few stones unturned: For instance, thermostats will be adjusted in all Yale buildings from 70to 73 degrees down to 68 degrees in winter and from 72 to 75 degrees in summer, saving a projected $1 million in energy costs.

PRESERVING THE CORE?

When administrators first realized the endowment’s value would plunge in the wake of the global economic crisis, Levin pledged to preserve Yale’s academic core and maintain financial aid throughout the entire cycle of budget cuts. Through two rounds of across-the-board reductions and a series of major cost-cutting measures — cuts that halted the construction of two new residential colleges, slowed the pace of expansion into the West Campus complex, laid off 100 staff and slashed the funds given to YaleNext — students were largely spared.

Yet there has been some impact on academic activities, such as the postponement of faculty hires. Reducing the number of graduate students accepted will also affect Yale’s teaching mission, Levin said. But Salovey said administrative units have so far borne the brunt of the budget crisis, and will continue to do so.

“Generally speaking, the supporting units have taken more,” Levin said. “Everyone’s sharing in the burden of this.”

The annual memo was released after months of conversations between the Provost’s Office, deans, program directors and department chairs — meetings in which administrators scoured Yale’s operations for extra savings yet ultimately decided to dip, once again, into personnel costs and academic activities to make up the remaining $100 million gap.

Besides asking departments and programs funded by the central operating budget to slash expenses by up to 7.5 percent based on the availability of their own restricted endowment funds, Levin and Salovey said professional schools and self-supported programs such as the Yale Center for British Art will receive 13.4 percent less endowment funding than before.

Department chairs have already seen faculty hiring and recruitment delayed by a year or more, and every fresh round of budget cuts, they say, comes closer to threatening their teaching and research mission.

“It may seem like eating out and traveling are luxuries, but to the extent that faculty are limited in their ability to attend conferences or attend speakers to campus, that’s part of the core too,” said Steven Fraade, chair of the Judaic Studies program. “When people speak of the core of the University … does that imply that everything else is somehow frivolous?”

TOUGH TO TRIM

Three department chairs and two professional school deans interviewed Wednesday said the 7.5 percent reduction — coming on the heels of another 7.5 percent cut in personnel and non-personnel spending and a 5 percent cut in non-personnel spending last year — would be difficult to find over the next month. None had specific plans for finding savings yet.

“Although obviously they’d like not to impact educational programs, it’s starting to get close,” said Ecology and Evolutionary Biology head Richard Prum, whose department has already eliminated most social events and saved money on guest lectures by inviting local speakers or even Yale’s own faculty. “Trying to make decisions about where additional cuts would come is starting to get difficult. We’re pretty bare bones.”

Salovey acknowledged finding more savings would be a “challenge,” but he said departments should be able to make bulk purchases and trim research programs to meet their quotas. Departments or programs that have their own endowments funds or “rainy day” funds, such as Judaic Studies and Southeast Asia Studies, should use those savings to cover costs that the University’s operating budget can no longer support, Levin said. In addition, they will reexamine restricted gifts — donations given to pay for a specific purpose — to see if donors’ original wishes allowed for alternate uses of their gifts.

And the University will not be able to make these cuts without eliminating some staff positions, Levin and Salovey warned.

“We are, of course, hoping to keep staff reductions as low as possible, but some will be necessary,” they wrote in the memo.

Though it is too early to tell how many layoffs there will be or what parts of the University they will come from, they hope to avoid them by relying on retirement and turnover to eliminate positions, Salovey said. The University ultimately laid off 100 staff last year after projecting a total reduction of 300 staff, Vice President for Human Resources Michael Peel told the News in October. He could not be reached for comment for this article.

Five department chairs interviewed Wednesday said the budget guidelines had not come as a surprise, since the memo followed several meetings in which administrators projected further budget cuts.

“In September, I was warned these things were likely, barring a miracle on Wall Street,” said Religious Studies chairman Harry Stout.

But despite administrators’ fears that severe budget cuts would be necessary, they were optimistic that the endowment would recover enough by now to lighten the burden. That recovery did not happen, Salovey said.

“We’ve known for a long time that if there was no recovery, there would be deeper cuts,” Salovey said. “But provided there are no surprises in the economy or the endowment, if we can do these things, the worst will be behind us.”

Working with the Provost’s Office, deans, directors, department chairs and business managers will begin the process of preparing a 2010-’11 budget this week.

Comments

  • Andrew

    If these cuts don’t include Levin’s ponying up at least a quarter of his own salary, then we’ll see what he’s really made of.

  • academic/administor

    The proposed reduction in new graduate students could make room for departments to programmatically embrace “minor” advisees from Yale College who would benefit in many ways from informal oversight of their proposed minor course structure.

  • ’10

    I agree with #1. It’s ridiculous that Levin can justify making cuts to academic programs or firing staff while still raking in the better part of a million dollars a year.

  • ’11

    taking a pay cut would be the right thing to do. Many non profit presidents and CEOs have done that recently.

  • Yale10

    @ ’10,

    This is the Yale Corporation we’re talking about. How can a corporation retain a retinue of administrators who could all join their alums i-banking if we don’t pay them out of their fired staff members’ pockets?

    Be reasonable, please!

  • Egalitarian

    To #1: I couldn’t agree more. Levin could have his salary chopped in half and still be in the richest 1% with plenty of room. Why should prospective graduate students be rejected to keep him filthy rich? And then we wonder why our country can’t produce enough good scientists!

    To #5: Maybe the Democrats need to raise taxes on those i-bankers and provide incentives for people to work for educational and non-profit organizations.

  • Hmm..

    Do they realize by lowering the temps in buildings during the winter, it will just make staff plug in high-wattage space heaters? Thus, negate any cost savings.

  • mc 00

    it’s not his fault the economy’s tanked, and he’s after all stewarding us through the downturn. i agree that their voluntary pay freeze is a weak gesture, but my first thought wasn’t really for the top administrators to take a disproportionate pay cut.

  • Staff M&P

    Paying for the Yale Heath Plan?
    A freeze on childrens tuition reimbursement?
    A Decrease in Sick Days?
    2 days less time off?

    Now why did I take a pay cut to come work for Yale? If you continue to take away the benefits and alter the culture to be “more corporate”, you better bump the salaries or your talent will start looking for greener pastures. Unless you don’t care about the talent and just care that there is body to plug the hole.

  • @#5

    You’re assuming that they would leave if the salaries dropped. Don’t assume. Prove it.

  • to 10

    hahaha, I agree…with this job market, where you gonna go?

  • Frustrated

    The question is not whether people who are at Yale are going to stay or not, but what kind of employment pool this university will maintain. Those desperate will stay. Those talented will likely leave at some point. Maybe not this year, but possibly the next year. This is the issue of adverse selection. Does Yale really want to keep only those employees whom nobody else wants to hire?

  • think about it

    Benefits at Yale are still better than most companies out there. M&Ps better look out – it’s not like staff cuts are coming from the bloated union jobs.

  • @13

    When you add the value of your benefits offered by Yale to the pay you receive (something you can actually view now on My Benefits page), and then compare this to what your peers are making in a corporate world (including both; their pay and benefits), you might realize that actually you are not really better off than they are. Furthermore, you might discover that you are worse off compared to their combination of pay and benefits. This is true for most M&P jobs. It’s a different story with C&Ts and Facilities staff who often receive a lot more than they would somewhere else with their education and experience.