An update on College finances
Skidmore College President Marc Conner and members of the president's Cabinet briefed employees on the state of the College’s finances, including ongoing efforts to reduce the College workforce by 10% over the next five years.
Overall, the president described the College as in a strong financial position compared to the more uncertain situation last year associated with the pandemic. But he also emphasized that Skidmore must continue to take steps to maintain its financial health moving forward.
President Conner noted that Skidmore has not been forced to make indiscriminate cuts that many institutions have resorted to since 2020.
“We’re emerging from COVID really without a major financial hit. We have balanced our budgets. We've continued to meet student financial needs and provide other student support. We've largely maintained wages and benefits, and we have generous GSAs (general salary adjustments) budgeted for this year,” President Conner said. “This is a remarkably healthy situation financially, particularly compared to other institutions, but we need to be healthier in order to do all that we want to do.”
Vice President for Finance and Administration and Treasurer Donna Ng said that Skidmore’s current planning model forecasts deficits for Fiscal Years 2023 through 2026. In 2026, an operating deficit of more than $10 million is projected.
Vice President Ng offered context to explain this forecast. She noted that tuition represented Skidmore’s largest source — more than half — of Skidmore’s revenue. Even as demand for financial aid has continued to grow, net tuition revenue has only increased modestly — by about 1% annually over the past five years. Skidmore also has a relatively small endowment that it can draw on relative to peer institutions.
In terms of expenses, salaries and benefits constitute the largest component (64%) of Skidmore’s budget.
“The future deficit is really because our net tuition revenue isn't growing as fast as our largest expense, which is salaries and benefits,” Vice President Ng explained.
She said that these challenges were compounded by the expectation that student enrollment would decrease in the coming years. In order to address the scale of future deficits, Skidmore is working to reduce the size of the budget dedicated to salaries and benefits as it is the largest component of the College’s expense budget. While other expense lines will be reviewed for possible reduction, it's important to remember that 6.7% of the overall services and supplies budgets were already reduced in Fiscal Year 2020, Vice President Ng said.
Dean of the Faculty and Vice President for Academic Affairs Michael Orr said that the number of full-time equivalent (FTE) faculty members had increased from 2011 until 2019, the last year before the pandemic. At the same time, the student-faculty ratio had decreased to a low of around 7.6 students per faculty member.
“That’s the trend that is most concerning especially in regard to the projections of tuition revenue,” Dean Orr said.
A hiring freeze, higher than expected enrollment, and a reduction in students studying abroad in the past two years have all resulted in an increase in the student-faculty ratio since 2019. But Dean Orr said a planned 10% reduction in faculty FTEs — equivalent to 32 positions — over the next five years would bring Skidmore closer to 2014 level staffing levels and result in a total of $3 million in savings, while attaining a student-faculty ratio of about 8.5:1.
Dean Orr noted that a new Faculty Advisory Committee on hiring would hold its first meeting on Tuesday, Nov. 2, and would work to develop consistent criteria to evaluate current and future faculty openings.
Similar to increases in faculty lines, VP Ng noted that staff levels had also increased since 2011 and that Skidmore was working to reduce its staff by 10%, or 65 positions, over the next five years for an anticipated savings of about $4 million.
“Compared to most liberal arts colleges, we continue to be in an enviable situation,” President Conner said. “We are not faced with across-the-board cuts. We're not anticipating the elimination of currently filled positions. As I’ve said before, we're cutting open positions, not people. We don't have to cut whole elements of our curriculum or of our support. And we are able to determine where these reductions can best be accomplished.”
President Conner, Vice President Ng, and Dean Orr answered a number of questions from employees. A recording of the presentation is available.