Revenue gap and lower enrollment contribute to budget cuts
There is a possibility of upcoming employee layoffs and budget cuts, officials of Saint Joseph’s University recently confirmed.
The impending layoffs and cuts have been caused by the university not bringing in as much revenue as expected, according to University President, Mark C. Reed, Ed.D. This was partially caused by a lower total enrollment of undergraduate students for the 2015-2016 academic year than was budgeted for, according to Joseph Lunardi, ’82, vice president of marketing and communications.
This fall, 4,528 students are enrolled as full-time undergraduates, 27 less than the previous year, according to Maureen Mathis, assistant provost for undergraduate enrollment.
Additionally, freshmen enrollment was lower than expected, totaling 1,176 students. This is about 125 less than the targeted number of 1,300, according to Mathis.
“The admissions world is a tricky world…we’re relying on 18-year-olds to make an admission decision, to make a life decision, and it’s really the first major decision they’re making,” Mathis said. “I think in the end it was just that students had decisions to make and 1,176 of them chose Saint Joseph’s.”
The university received the same number of applications as last year, but decided not to admit as many applicants, said Lunardi and this process improved and lowered the acceptance rate of the university by three percentage points from last year, according to Mathis.
“A decision was made in the spring to not go deeper into the applicant pool, simply for the sake of adding paying students,” said Lunardi. “The quality decision took priority over the quantity decision, so we’ve seen small improvements in selectivity, in test scores in certain majors, in entering GPA, in diversity statistics… [but] there has been no major transformation in the makeup of the entering class.”
Besides enrollment, the budget for the 2016 fiscal year also seems to be in a slight state of disarray. According to an email sent from University President Mark C. Reed, Ed.D., to all university employees, even though the 2015 fiscal year was completed with a positive increase, current projections estimate that there will still be an unresolved gap of $5 million for FY16.
This gap is due to both the lower than projected enrollment and the university’s largest expense—employee compensation—continuing to increase at a faster rate than revenue, according to the email.
But despite the $5 million unresolved gap for FY16, next year’s budget is expected to have a $7 to $8 million surplus, according to Lunardi.
“So what we’re looking at addressing is how much of a healthy surplus to maintain not fixing a deficit. If we did nothing there wouldn’t be a deficit, because the shortfall is still smaller than the projected surplus, but…you don’t want to operate that way,” Lunardi said.
Officials of the university are looking to fix this year’s problems to the greatest extent so that future adjustments are minor and have less impact, Lunardi said.
The university president echoed these sentiments.
“I think it’s very important for Saint Joseph’s on a go-forward basis that we have greater stability and predictability and reliability in our enrollment forecast and what the goals are that we set, and we are comfortable that we can achieve them,” said Reed. “If we have a few more students, that’s only going to help alleviate pressures on the expense side of things. But that’s not a sustainable model to rely on year in and year out.”
Reed explained that the university might have to go through some permanent restructuring, which could come in the form of layoffs.
“We’re a people-intensive business, so when we look at making adjustments and reductions on the expense side, I don’t foresee how it’s possible to do that in a responsible and sustainable way that won’t impact personal in some way, shape, or form,” said Reed.
He also said that there is currently no determined answer as to how many layoffs are to come, but according to Lunardi, the amount will be “modest.”
“Nothing like what’s being seen at comparable institutions,” Lunardi said.
“No one wants to lose their jobs…[and] we have to treat people with dignity,” said Lunardi. “But treating people with dignity also means be- ing fair to our students and their families who are paying tuition because they’re making sacrifices also…their financial well-being is just as important, if not more so than the financial well-being our employees.”
Both Reed and Lunardi said that the goal is to steer cuts and layoffs away from the academic operations of the university.
“In recent years there have probably been more cuts on the academic side, and I think we’ve all seen the lack of popularity of that,” said Lunardi. “I think this time around it’s not going to go in that direction.”
“The way that I view that we start is with the administrative operations of the institution,” said Reed. “We’re not talking about looking at professors who are teaching right now…those are activities which are core to our mission and core to who we are and what it is that we do. That doesn’t mean that we don’t look at those areas, but we need to take more immediate and timely action, [and] look at the administration pieces of it.”
The extent of the layoffs and their timing will be more clear once the official enrollment consensus numbers are released at the end of September, Lunardi said.
“The goal here is to strengthen,” Lunardi said, “not weaken the academic enterprise.”