Potential Cuts in the School’s State and Self-Sustaining Budgets February, 2009 Principles
The approach to budget reductions was guided by the following principles: 1. 2. 3. 4. 5. Focus on preserving core activities Maintain high levels of teaching and research performance Eliminate redundant services Obtain efficiencies in operations through the use of technology Make decisions that will allow the Foster School to rapidly improve and expand once the current economic crisis subsides
Cuts in State Budget
8% Cut: $1,608,608 • • • • • Do not replace faculty denied tenure Return state funding for vacant faculty positions Eliminate 3.5 filled and vacant staff positions Move 3 staff onto self-sustaining budgets Revise the BA curriculum to eliminate a course
The inability to hire into faculty positions will have a significant negative effect on the Foster School’s strategy which requires additional faculty who are outstanding in teaching and research. The elimination of staff positions will decrease student service and reduce our visibility among prospective students and recruiters. Moving staff to self-sustaining budgets will add stress to budgets that are already facing uncertain revenue streams due to the economic downturn.
10% Cut: Additional $402,152 • • • Cut 10 MBA electives (reduces demand for part-time and full-time lecturers) Cut 50 BA classes (reduces demand for part-time and full-time lecturers) Eliminate a number of classes aimed at students outside the Foster School. These classes may be offered through UW Extension.
On the BA side, class sizes will be increased—some dramatically. This strategy may be difficult to implement due to the limited number of large classroom on campus. Reducing the number of MBA electives may have a negative impact on student satisfaction.
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12% Cut: Additional $402,152 • Cut approximately 45 additional BA classes (reduces demand for part-time and full-time lecturers)
Cutting these classes will have a significant negative impact on time-to-graduation, which may increase to more than 5 years.
Cuts in Self-Sustaining Programs
It is also important to note that the economic crisis will have a significant impact on our nondegree executive programs and our self-sustaining programs (Executive MBA, in particular). We anticipate revenue from these programs will be down approximately $1 million in FY10. To mitigate the impact of this on the School, we are planning significant cuts in the operations of our self-sustaining programs and Centers. Staff will be laid off. Additionally, a number of new and vacant positions will not be filled and there will be cuts in IT equipment and software. To reduce the need for cuts in self-sustaining programs, we will be increasing the tuition in all related degree programs.
Future Plans
Upon completion of PACCAR Hall in fall of 2010, we plan on increasing the number of students admitted to the day MBA and Evening MBA programs. The increased revenue may allow us to hire one or two new faculty members and enhance student services, especially those related to career services for undergraduates. However, it is important to recall that these funds must also be used to pay off $15 million in debt related to PACCAR Hall.