May 4, 2010
Dear Students, Faculty and Staff:
As we approach the close of the spring term, we are moving to implement the remaining elements of our budget-reduction plan, a sequence of cost-saving strategies developed last year in response to the global economic downturn. While some indicators are pointing toward an improving economy, and while financial markets are starting to recover, it remains a fact that the crisis has both reduced our endowment and increased students’ and families’ financial need. The specific measures announced this semester-space reductions, faculty reductions, and changes to employee benefits-follow a number of significant cuts already made in staffing, compensation and programs. Taken together, these measures represent the full realization of our budget reduction plan.
When we began our budget planning, in the fall of 2008, we estimated that we would need to reduce our planned expenditures by $30 million. We were fortunate in being able to reduce that amount to $22 million. We had a one-year salary and faculty-hiring freeze and 44 staff members had their positions reduced or eliminated. We invested one-time funds to pay the remaining balance on the co-generation facility and other sustainability projects in areas such as lighting, heating, insulation, refrigeration and water conservation, allowing the energy savings to be realized immediately in the budget.
This year, the Committee on Academic Priorities (CAP) completed the hard work of identifying 13.5 faculty positions that will not be replaced when their incumbents retire. CAP went about this process in a careful and thoughtful way, and Provost Schuster and I have accepted their recommendations. The clarity we have reached has enabled us to make allocations for nine faculty searches next year, ending the faculty hiring freeze.
Another important step taken this year was identifying potential buildings for release in order to achieve a five-percent reduction in our use of space. Several factors, including the fact that Smith has more square feet per student in both residential and academic buildings than most of its peers, make this a reasonable place to seek savings. As presented in a number of forums and meetings this semester, the buildings under discussion are on the periphery of the campus and include academic buildings, administrative buildings, student houses and college-owned rental buildings.
The space reductions will take five to ten years to implement, and no student house will close in the next two years. The next stage of planning will be to relocate services that would be displaced, including departments such as public safety, public affairs and health services. We will then consider selling or leasing a number of properties that are not in strategic locations for the college.
Although the economic downturn has been the immediate motivation for these reductions, it is not the only one. The financial crisis has highlighted the weakness in the financial model of selective liberal arts colleges like Smith, which value small class size, low student/faculty ratio, residential education, and rich extracurricular programming, and which rely on full-paying families, generous aid budgets and philanthropy to address these expenses. It is clear that families have become increasingly pressed to meet the full costs of a Smith education, and that investment growth alone cannot cover the increased demands for aid. At its meeting this past weekend, the board of trustees reiterated its concern about the challenges facing higher education and underscored the importance of maintaining the budget discipline we have enacted. The cost controls we have put in place, as well as the important commitments we made to protect financial aid, position Smith on a trajectory that is much more sustainable, ensuring that we can keep tuition increases relatively low and operate with financial stability over the long term. This is not merely a balancing of the books but a critical, strategic advantage and a commitment to the excellence and diversity of the student body.
None of these decisions was reached easily or lightly nor without enormous consideration for their effect on people and programs. I am grateful to the faculty, staff and student members of the Committee on Mission and Priorities (CMP) and the Advisory Committee on Resource Allocation (ACRA), who have advised me over these last two years on the creation and implementation of our plan. The decisions underlying our budget reductions reflect the courage, creativity and common purpose that they - and each of you - have brought to this process. I thank you for the commitment you showed and the important questions you raised throughout the process.
In recent weeks, we have welcomed record numbers of admitted and prospective students for visits to campus. After a year’s hiatus, we have been able to restore funding for faculty and staff raises and are proceeding with important facility improvements this summer, including renovations to Wright Hall, Sabin-Reed and Lawrence and Morris houses. We are celebrating the awarding of more than 100 Fulbright Fellowships to Smith students and alumnae in the nine years since we established our fellowships program. To date this year, we have received more than $5.3 million in foundation, corporate and government support, and alumnae giving is returning to prior levels. Together, we have much to celebrate, not least the achievements of the 733 remarkable seniors and Ada Comstock Scholars who will graduate in a few short weeks.
Carol T. Christ