Wesleyan College has plans to reduce expenses by $1.3 million during its next fiscal year, which starts July 1, college officials said Tuesday.
The near 10-percent budget reduction includes cuts to pay and retirement contributions for about 100 full-time employees, as well as spending cuts for travel, meetings, office supplies, publications, postage and memberships, according to a statement from the college.
The college’s approved budget for fiscal 2010, which includes the cuts, is $13.6 million.
“The economy has impacted our fundraising efforts and endowment earnings,” Rick Maier, Wesleyan’s vice president for finance and treasurer, said in a statement. “Although our tuition is among the most affordable in the nation, it is quite possible that we will experience slightly lower undergraduate enrollment for fall 2009. In anticipation of these lower revenues, we intend to reduce expenses by $1.3 million to balance our operations.”
The college’s revenues from its endowment will be about $500,000 less than the current year, Maier said in a telephone interview. The endowment — along with Wesleyan’s $17,500 tuition and unrestricted gifts — is one of the college’s main sources of revenue, he said.
The struggling economy has caused college endowments nationwide to take a hit.
The average return from college endowments dropped 3 percent in the fiscal year ending June 30, according to an article in The Chronicle of Higher Education. Returns dropped an estimated 22.5 percent in the five months after that, the Chronicle reported.
Also contributing to Wesleyan’s revenue decline is the conclusion of a $1.8 million federal grant that provided $365,000 in funding for each of the past five years, according to the college.
In addition, enrollment is expected to take a slight dip. About 700 students were enrolled at Wesleyan in fall 2007, and there were about 730 students in fall 2008. But the college anticipates 692 students to enroll this fall, said Susan Welsh, Wesleyan’s director of communications.
Projections are based on retention rates and the number of students who already have put down deposits.
“It’s really early for us to have a good feel for that kind of thing,” Welsh said.
Faculty and staff pay is planned to be restored as more students enroll, Maier said.
Until then, full-time faculty and staff who make more than $30,000 face a 5 percent pay cut.
The college’s retirement plan contribution also will decrease from 10 percent to 5 percent, Maier said.
Members of the president’s cabinet will see their retirement plan contribution reduced from 10 percent to 1 percent, he said.
The pay cuts and retirement contributions are planned to be restored on an incremental basis and could occur as early as September.
For the cuts to be fully restored, enrollment would have to exceed the projected figure by 22 students, Maier said.
To contact writer Jennifer Burk, call 744-4345.