University President Richard Levin announced Wednesday that Yale will undergo another round of budget cuts. In an interview with the News, Levin discussed the University’s financial strategy, how the current cuts will affect Yale students and the future of Yale’s budget woes.
Q. Why didn’t you try to recover the whole budget at once, and do you stand by that decision?
A. I think it was the right decision. A year ago one could not have been certain about the future of the financial markets. It made sense to make a partial adjustment last year and see how things settled out. To have made a 15 percent cut right at one time would’ve been very difficult for the community to work through. Doing it in two steps is a lot easier to adjust to. We couldn’t be certain that the market would stay down even through June 30 last year, and we had to make decisions last January. At that point, there was still a lot of uncertainty. We felt it made more sense to make a partial adjust instead of full cuts. If it turned out we had overreacted, we could have put people out of work who didn’t have to be put out of work.
Q. Do you think professional school deans, directors, and other people responsible for the budget were prepared for the contents of the memo?
A. We’ve been keeping the deans and directors of major administrative units very abreast of our thinking. We laid out the contents of the letter for them two weeks ago this Friday. We had been meeting all fall with department chairs, deans and directors. People who are going to have to be responsible for making decision about the budget had all been briefed pretty fully.
Q. What is the core mission of the University, and how has it been affected by the cuts?
A. The core mission is to advance human knowledge and to educate leaders from all walks of life. Those are things we want to keep as protected as possible. We also want to be a place that creates opportunities for all students — regardless of financial background — to take advantage of the opportunities Yale offers, so financial aid is another focus. Keeping research and financial aid strong are our top priorities, and they’re the least affected by budget cuts. I don’t think this round of cuts affected those things.
Q. Do you have any concerns about reducing the size of the Graduate School?
A. In a previous round of cuts in the early nineties, we reduced the size of the graduate school by 25 percent. It stayed at a lower level then grew back little by little. The graduate school was at level it is now 18 years ago, and this is half the cut that happened in the early nineties. It didn’t create great problems then. We maintained strong graduate programs. Keep in mind that it takes five years for a reduction to fully take effect. That means just the first year class will be cut 15 percent, which means 2 to 3 percent of the graduate school’s full size. I don’t think the educational experience has been compromised for the students in any graduate or professional school.
Q. Why did you choose to cut the numbers in the Graduate School and not in the College?
A. Graduate students are very expensive. We request no tuition from them. They have a salary and a stipend. Each graduate student costs the university $65 to 70 thousand a year. A Yale College student’s tuition doesn’t cover the whole cost of tuition, but there would be no gains to cutting the number of students in Yale College.
Q. Do you feel that cuts have fallen heavily on professional and managerial positions because professors are tenured and staff positions are protected by the unions?
A. No, that isn’t the case. Last year we reduced the number of jobs by 450 or so. That was half managerial and professional jobs, half unionized jobs – roughly equal. There’s no particular bias here. The managers of different units look to where it makes most sense to reduce staff and cut some managerial positions, some unionized jobs. We achieved most of the savings last year through retirements, departures and voluntary layoffs. We had only about 100 involuntary layoffs in total. We hope that will be the case again this year — that we will achieve the cuts mostly through attrition and turnover. We’re enhancing the severance package for people who choose to leave voluntarily.
Q. In what ways will students notice or feel this next round of cuts?
A. I don’t think they will. It’s possible there will be some decisions that will have an impact on services, but only very minor things.
Q. When will the next round of cuts occur?
A. I hope there isn’t one — this is enough for me! I’m ready to start building again. Unless there’s some dramatic deterioration and another collapse in the stock market, I think this should put us in good shape for the next couple of years.
Q. Did having to re-evaluate the budget give you the opportunity to streamline or improve some programs?
A. Yes. Some of the service consolidations we’re thinking about will produce benefits. We’re going to be consolidating certain kinds of business and financial services like IT and human resources, and doing more shared services or centralization across all the officer units. We’re going to experiment in the President’s Office, the Provost’s Office and other administrative parts of the University with whether that provides better service at a lower cost. Once we work the bugs out of that, we would like to roll it out to the rest of the University in a year or two. This could be a major gain in efficiency and bring better services to the University if we can work if out.