Budget gap shrinks 33 percent after first round of cuts
Calvin administrators are one-third of the way to closing the school’s $11.5 million budget gap after cutting 3 to 7 percent of spending in most departments across campus this fiscal year.
“I’m elated with the progress we’ve made,” said President Michael Le Roy. “Our goal is to get this behind us as soon as we possibly can so we can focus on the future.”
But the progress comes at the expense of campus-wide cuts: 8 percent from the president’s office, 7 percent from administration and finance, 6 percent from student life, 5 percent from advancement, 5 percent from academics and 3 percent from enrollment, according to a 24-page report obtained by Chimes.
Information technology, physical plant and human resources were not cut.
Le Roy hopes to use fundraising and more income sources to reduce the number of cuts Calvin will have to make in the near future.
“We’re looking at a variety of steps to close the gap by 2017,” Le Roy said. “We’re going to try to be very successful in revenue growth strategies. The more successful we are there and with fundraising, the fewer expense reductions we will need.”
Cuts also included a 9 percent reduction to the Prince Conference Center, 4 percent to the Hekman Library and 3 percent to Creative Dining Services.
“We are determined to close our gap by 2017,” he said.
The $11.5 million budget gap mainly comes from having to add a debt service payment of $9.7 million to the operating budget by 2017. The rest of the gap stems from balancing the current budget.
This first round of cuts did not go through the full prioritization process expected to end this spring. Instead, heads of departments around the college identified 5 percent and 10 percent cuts in their division.
Then, Le Roy’s cabinet and the planning and priorities committee decided which of those items to cut.
“Each division came to the table with their 5 and 10 percent cut as promised ,” said Sally Vander Ploeg, vice president for finance and administration. “We didn’t take them evenly across the board, though. We tried to be strategic about the cuts we chose.”
The board of trustees approved the budget last May, ending 22 staff positions and saving the college millions of dollars on healthcare coverage.
About $2 million of the current $6.2 million debt service payment is currently integrated into the operating budget and administrators hope to have another $1 million added by the next fiscal year, according to Vander Ploeg.
However, administrators hope the debt service payment will be lowered from the expected $9.7 million in 2017, through possible debt restructuring.
Looking forward, Calvin leadership is optimistic, but realizes there is still work to be done.
“We made a lot of progress last year, and that’s gotten us a long way,” said Vander Ploeg. “But we’re going to have to continue to be innovative and creative about how we go about the business of higher education.”