Surprise, Surprise: University Provost Running Deficit of $55 Million for Five Years

In order to address a 5-year reoccurring deficit of $55 million, the University is trimming annual budgets across all colleges by 2 to 2.3 percent. Total budget cuts to be enacted by July 1 of this year, according to Interim Provost Harry Katz, will amount to $27.5 million, as originally reported in the Cornell Daily Sun.

Katz explained the origin of the deficits to the Sun, saying the provost’s office five years ago began “giving out allocations to both the colleges and the central administrative units that exceeded the revenues that were coming in.” Katz said previous Provost Kent Fuchs, now the president of the University of Florida, did not want to press the colleges to cut budgets after weathering the financial crisis. The provost’s office partially funds each college, as well as funding some administrative units and student services like libraries and building maintenance, according to the Sun.

The budget cuts, plus increased revenues from a 3.9% increase in tuition effective next academic year, will remove the deficit from the University’s finances, Katz said. Through the University Support Pool Tax, the provost’s office takes 10% of undergraduate and graduate tuition revenue.

This past fiscal year, Cornell’s Ithaca campus operated with a balanced $2.1 billion budget, and across the entirety of the University there was a $1 billion increase in net assets. Inspection of Cornell’s financial statements reveals, however, that the University-wide budget is only balanced due to the medical care revenues from Weill Medical College and clinical affiliates in New York City. The Ithaca campus itself runs a deficit, as previously noted by Vice President Susan Murphy ’74, Ph.D. ’94.

Readers should refer to this Daily Sun report for more on the impending budget cuts, and how they will affect select colleges.

Another Daily sun report on the subject concerned faculty reactions to the budget cuts. Faculty members say they want more information about the budget cuts and the University’s finances. This report also mentions Katz and the college deans will not cut student services or lay off staff in order to trim their budgets.

This last point is quite interesting, considering the Daily Sun a few days later reported that Cornell’s faculty count is at an all-time high. The University’s run-up to its current total of 1,625 faculty began with a “faculty renewal program implemented after 2010,” according the Sun. Coincidentally, five years ago is when the provost deficits began.

During the forum with Vice President Murphy last month, it was revealed the University is engaging in increased hiring in order to prepare for a series of retirements from older faculty. This increased hiring, Murphy explained, is a major strain on the University budget. Even though pre-emptive hiring makes sense, the Sun report quotes Dean of the Faculty Joseph Burns Ph.D. ’66, astronomy saying, “While we’re hiring, the main demographic trend is that faculty are not retiring.”

So, do the “faculty renewal program” and the origination of the $55 million yearly deficits occurring at roughly the same time have anything to do with each other? The Sun quotes Professor Adam Smith, anthropology: “The impact of budget cuts in Arts and Sciences will be felt most acutely in hiring…”