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Overall budget increases from last year

Aug. 23, 2004

$9.3 million more goes to financial aid

By STEPHANIE FRANKS, editor in chief

In May, the Baylor Board of Regents approved the new budget for the fiscal year 2004/2005 of $341 million, a $28.5 million raise from 2003-2004 budget. Yet, Baylor has dealt with some obstacles in faculty hiring as well as cutbacks in other departments along with increases in new facilities and programs.

Reagan Ramsower, chief information officer and interim vice president of financial administration, said a variety of things happened that got Baylor a lower income than expected.

"We readjusted the budget for this year to be more in line with what the income may be in the future," Ramsower said.

According to Ramsower, this year's budget does not intend to draw into Baylor's quasi-endowment at all as opposed to the past two years when $7.5 million was drawn from quasi-endowments.

Quasi-endowments are the savings off permanent endowments that Baylor does not intend to spend.

Restricted gifts are gifts given to Baylor provided that Baylor does not use the principal amount, only the earnings off the gift that makes our permanent endowments.

According to Ramsower, when the economy faced a slump after Sept. 11, 2001, enrollment went down because of the financial troubles many students' parents faced.

"Everybody in higher education has been impacted by the slowdown in economy. It has come more quickly to public universities."

According to Ramsower, Baylor lags by a year behind the public institutions when dealing with financial situations because of the government support for public institutions.

"I felt that we felt same pressure they felt but we were able to deal with it later than them," Ramsower said. "It was at the point it occurred."

"Baylor is not in any kind of financial problem. Now, we've had to adjust."

In general, the biggest impact was freezing salaries.

"That's the most painful," Ramsower said.

For instance, the Texas Collection, last year, had to cut back on its hours because of unfilled positions.

Looking at the recruiting rate for faculty, Ramsower said that if one talked to a fall candidate, "they would say they haven't talked to a school that hasn't had cutback problems."

"If that hurt our reputation, we won't really notice that till this fall," Ramsower said.

"There's been a lot of statements made that BU is in deep financial trouble but if you look at our finances we're not," Ramsower said.

"Did we miss our predictions? No doubt. Did we have to cut back including very painful ones? Yes. Does this mean we're in dire trouble? No. Sure it needs to be corrected though and as soon as possible."

Also at the regents meeting, a new financial model that would carry Baylor through 2015 was approved. This model included adjusted tuition increases, enrollment targets and endowment increases.

According to Ramsower, this goes out over 10 years and tries to predict the return on savings reflecting how the economy will do. Overall operating expenses for this year have been reduced by 20 percent.

"We live in a time of uncertainty so we want to be conservative in those numbers," Ramsower said. "I'd rather be surprised than disappointed."

According to Ramsower, the money has not gone to campus construction but to increase in faculty and top staff.

"Whatever it is we're doing, we're doing it in the best interest of the students," Ramsower said.

Dr. Dub Oliver, dean for student development, said that total budget continues to expand but also with growing facilities and programs which leads to budget cuts in existing areas.

In the departments under student development, each department was asked what could they cut without affecting students.

"It was intentional to reduced the impact on direct services to students," Oliver said.

Some of the things cut were travel for professional associations. They could attend a state conference as opposed to a national conference which cost more money. Also, printing and publications was adjusted to more online communication in order to conserve on paper.

"That's a challenge," Oliver said. "We've done a lot of our new student communication by e-mail."

Oliver also said that student development has tried to develop strategic partnerships.

For example, one of the new programs started in fall 2003 was the Strengthsfinder tests developed by Gallup news organization handed to every new student and faculty.

"The challenge of the budget is we're still in expansion mode and it makes us take into account what we're spending money on more," Oliver said. "It challenges us to be more strategic."

"I don't feel like we've lost a step because we have great resources for BU."

This year's budget adjustment also features a $9.3 million increase in financial aid. While in his new position, Ramsower said one thing he intends to do is try to communicate more broadly with groups of students.

His initial work is to speak to students and faculty to provide a better understanding too.

"There's a lot of needs there," he said.

Ramsower replaced David Brooks in the vice presidential position in July.