2009-2010 Budget Outlook
I wanted to take a moment to update the Calvin community on our budget situation for this year and next.
This information is particularly timely, in my opinion, because at this past weekend's board of trustees meetings the tuition and room and board rates were set for 2009-2010. The board also decided to defer decisions on the final budget for next year until its May meeting. Typically the board sets tuition/room and board and the budget for the next year at its February meeting, but this year it decided to only set tuition/room and board and to delay the final budget until we have a better sense of what admissions numbers for next year might look like.
Keeping Calvin affordable
Allow me to first note tuition and room and board for next year. Both rates were raised just 3.8 percent from this year to next. This is one of the lowest increases in my almost 14 years as Calvin's president. In fact it simply matches the cost of living increase from last year’s average to this year's. But we felt that this was the right decision to make, although it will mean continued sacrifices for the Calvin community in 2009-2010—including no raises or step increases for faculty and staff.
Why was this the right decision? Simply put we currently are in an economic situation the likes of which we have not seen in Michigan, nor, indeed, on a national or global scale, for decades. Our constituents are struggling, and for us to hold tuition and room and board rates as low as we possibly can is, I believe, an appropriate recognition by Calvin that 2009 is a year of tremendous uncertainty for many.
But this modest increase in tuition has significant implications for our budget, because 85 percent of the college's revenue is generated by tuition. In addition the revenue side of our $96 million budget also has been hampered by the downturn in the stock market. Our endowment dropped about 20 percent in 2008. That's not as bad as the market as a whole which fell nearly 40 percent, but it is still a significant blow to Calvin. The Calvin Annual Fund, which normally contributes almost $3 million to our budget is down 20 percent from last year, and we have also seen a 15 percent drop in the ministry shares we receive from the Christian Reformed Church. Added to this scenario are factors on the expense side over which we have little control—such things as rising health costs (up another eight percent this year) and rising food costs—and our budget is suffering serious challenges.
In light of all this, we felt we had no other choice but to freeze salaries for 2009-2010. It is a decision we do not take lightly. Our people—faculty and staff both alike—are our most valuable resource. Since I came to Calvin I have worked hard with the cabinet and the board of trustees to increase salaries, particularly on the faculty side. And I think we have made great progress in that area, bringing our faculty wages to a competitive level with comparable schools. So it is personally frustrating to not be able to continue that progress this year.
I am hopeful this freeze will be a one-year aberration. It is also my hope that as we look at the world outside this 400-acre campus that we will recognize the situation many of our friends and family are in, and that we will find ourselves grateful to be working at this place. I know and am encouraged that we are together committed to the enterprise that brings us together here at the corner of Burton and the East Beltline: educating young women and men to discern God's call for their lives, equipping them to leave this place ready to make a difference in His world.
We are being cautious about the coming months, but I do not believe we need to go into crisis mode. Enrollment numbers for next year are looking good. If we can achieve a full class of 1,000 FTIACs (first time in any college) I am confident that we can balance the budget for 2009-2010 without cutting positions, ending programs or cutting salaries. Still, we will go into the coming school year with a level of care appropriate to the situation in which we find ourselves. We will continue to maintain the restrictions we have put into place this year—things such as limited travel, no overtime without vice presidential approval, not filling all open positions until we know our enrollment, etc—and we will continue to be prudent with discretionary spending.
Your determination, dedication and grace
As we enter the second semester of the 2008-2009 school year I want all faculty and staff to know how much I, the cabinet and the board appreciate our employees. This has not been an easy year, but people at Calvin have responded to difficult circumstances with determination, with dedication and with grace. People have provided encouragement, they have made necessary sacrifices, they have worked and they have prayed. In the midst of these tough times I have been encouraged, I have been heartened and I have been proud to be part of Calvin.
Let me conclude by saying thanks to the Calvin community for your generous spirits, your ongoing work and your commitment to Calvin. It is appreciated. Please continue to pray, not just for Calvin, but also for our nation and our world.
Gaylen Byker, president