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What you need to know about the projected $6 million budget shortfall

Going in-depth on Bethel University's projected $6 million deficit next year, largely due to lower undergraduate enrollment.

Going in-depth on Bethel University’s projected $6 million deficit next year, largely due to lower undergraduate enrollment.

By Alayna Hoy and Callie Schmidt

IN BRIEF

  • There is a $6,163,700 budget shortfall projected for next year.
  • The President’s Cabinet is saying the shortfall was primarily caused by a decrease in student enrollment.
  • This deficit could potentially mean staff cuts this year and department cuts next year.
  • The Cabinet has temporarily cut $1.6 million from the budget this year that would have been used for maintenance and general projects around campus.
  • The Cabinet has issued a temporary salary freeze, which will mean no raises for faculty, staff, and administrative members within the next year.
  • Staff cuts will be announced May 1, which could include any employee at Bethel who does not teach a course, such as librarians and administrative assistants.
  • The Cabinet plans for the budget to be balanced by next year after enacting these temporary measures.
  • Humanities professors are worried Bethel is steering away from a liberal arts university and more towards a science and career-based institution.
  • The Campus Master Plan – which includes changes such as growth in business and engineering – comes from a fundraising budget, so this budget shortfall will not affect it.

An email sent out to faculty Jan. 17 revealed a projected $6 million shortfall in the 2018-2019 academic year due in part to a drop in total enrollment in the College of Arts and Sciences (CAS).

Total CAS enrollment was 47 students lower than it was a year ago and about 50 students short of Bethel’s projections, which they use for budgeting, according to the announcement.

The email prompted a Bethel community meeting of faculty, staff and administration Feb. 6, where Bethel president Jay Barnes spoke.

“We’ve done this before, we’ll do it again in terms of finding our best way forward,” Barnes said. “We’re not interested in excuses. We’re interested in finding our way forward.”

More than 80 people gathered Feb. 7 at the Faculty Senate meeting in the Eastlund Room to get more information on Bethel’s budget shortfall and hear the Cabinet answer faculty’s questions, which they compiled into a list.

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Deb Harless, Executive Vice President and Provost, sits and listens during an open panel discussion with cabinet members regarding the budget deficit Feb. 7 in the Eastlund room. | Photo by Maddie Christy

The budget problem is a recurring one and will remain so until Bethel can find a sustainable solution to increase student enrollment, according to Bethel’s Executive Vice President and Provost Deb Harless.

Katie Finney, Bethel Student President, attends every Faculty Senate meeting.

“Though I was surprised (by the budget shortfall), I recognize higher education in general is faced (with) many challenges, none of which Bethel is excluded from,” Finney said. “It is a harsh reality that higher education is having to accept and adjust to.”

IMPACT ON STUDENTS

With no mention of the budget shortfall in the Bethel E-announcements, many students do not know about the projected deficit – but how will this affect CAS students?

The Cabinet has issued a $1.6 million cut from this year’s budget, which would have been used for general maintenance projects around campus such as repainting walls and replacing carpeting.

“I hope (students) are not going to be feeling this pinch,” said Patrick Brooke, Bethel’s Chief Financial Officer. He said a commitment to providing financial aid will hopefully keep the budget crisis from greatly impacting the net cost of tuition.

Susan Brooks, English professor and previous Faculty Senate President, agreed that faculty will try their best to prevent the budget shortfall from impacting students.

Still, Brooks and other faculty worry that if professors are stretched thin by increased workloads and hours, the result could be decreased responsiveness and individual engagement with students.

“I think this directly threatens the quality of the education (students) are receiving,” said Chris Gehrz, Faculty Senate Vice President. He added that if budget problems continue, they could someday lead to courses or even departments being cut.

A small number of staff reductions will be announced May 1. Though no professors will be cut, it is uncertain which staff positions will be eliminated and how many.

Erica Ross, Bethel Library Circulation Manager, said staff are hit hard in these circumstances, because they don’t have contracts to protect them like employees.

Ross added that staff cuts will lead to overworked employees. In the library, this will equate to fewer open hours, decreased resources and unanswered questions and concerns for students.

Wade Neiwart, Faculty Senate President, remains more hopeful.

“There will undoubtedly be renewed energy behind recruitment and retention, which impacts student experience,” Neiwart said. “My hope is this helps to further strengthen the close connections students make with faculty and their ties to Bethel.”

RESPONSE FROM FACULTY AND STAFF

“Deja vu.”

That’s how Gehrz described the feeling among faculty in light of the budget shortfall.

Faculty, staff and cabinet members all remember the sting of a budget shortfall five years ago that led to faculty and staff cuts. Many have expressed frustration in finding themselves in the same precarious position.

Ross recalls feeling anxiety-ridden when cuts were made in 2013. “Many of my coworkers were in survival mode,” Ross said.

Ross’s previous position at Bethel was eliminated in 2013. Her current role once belonged to four staff members. Ross said this has become a new normal at Bethel, with a reduced staff size having to assume the responsibilities of employees who are cut.

Kaylin Creason, Acquisitions and Interlibrary Loan Supervisor, has also experienced extra pressure in her role, which used to be the job of two different employees. She feels angry and hurt by the news of the budget shortfall and impending staff cuts, but not surprised.

“When staff are cut out of that community, or do not receive the pay they deserve, it hurts the entire community,” Creason said.

Other Bethel employees want to know how this budget shortfall happened, why they didn’t know sooner and what is being done to fix it. Professors at the Faculty Senate meeting asked why the solutions set into action then are not keeping Bethel out of financial trouble now.

“If all of these strategic plans are so fantastic, why are we sitting here again?” Brooks asked at the Feb. 7 meeting.

Cabinet members blame budget issues largely on decreased enrollment. Harless said Bethel is not the only college facing this problem. Between 60 and 70 percent of schools in the Council for Christian Colleges and Universities are also experiencing decreased enrollment, according to Harless. Still, professors wonder how the projected budget plummeted this far, this fast.

Recently, much of Bethel’s marketing and funds have gone into building up departments like business, physics and engineering.

Especially in the face of a budget crunch, professors in the humanities are concerned with protecting their courses and departments against a higher ed movement toward the sciences.

Paul Reasoner, a philosophy professor, appreciated Brooke, the CFO, taking some responsibility for not communicating the data with faculty members in a timely manner.

“I still think there’s a kind of dissonance in that we’re a Christian liberal arts institution, but it’s pretty clear that any departmental track that automatically leads to some kind of career is where the money is going,” Reasoner said.

Reasoner suggests better marketing to prospective students and their parents about the benefits of the humanities.

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Bethel University faculty members listen as the President’s cabinet address the $6 million budget deficit issue in a faculty senate meeting Wednesday afternoon. | Photo by Maddie Christy

WHAT HAPPENS IN THE FUTURE?

Faculty Senate will meet again in two weeks and will continue discussing the shortfall.

Other short-term adjustments to the deficit problems will include salary freezes for all faculty, staff and administration next year, the elimination of some current staff openings and encouraging professors to begin phased retirement as well.

Ross, a 2011 Bethel graduate, reports that with setbacks like salary freezes she can’t afford to pay off her student loans on her staff salary.

The Cabinet plans to introduce working group committees to begin dealing with the fall-out of the projected budget shortfall. Those groups will look at innovation, annual review of academic programs, faculty load models and structures, staffing models and health plan review.

“I believe in Bethel. Though this is not an ideal situation, I have confidence in the administration for the changes that have been made to create a balanced budget for next year,” Finney said. “However, these changes are temporary, one-year solutions and the next step is for the Bethel employee community – faculty, staff, and administrators together – to come up with longer-term solutions.”

UNANSWERED QUESTIONS

Due to a lack of time, other faculty submitted questions from the Senate meeting remained unanswered. Some questions that still need to be clarified by the Cabinet include:

  • The $6 million budget shortfall seemed to be blamed largely on 50 fewer students in CAS than was projected. Even if all 50 of those CAS students were paying the full sticker price of $46,550 (which they certainly would not have been), missing them only amounts to $2.3 million or so in revenue. (And the latest issue of Bethel Magazine trumpets growth in CAPS/GS and Seminary.) What accounts for the other $4 million shortfall?
  • At a budget committee meeting just before Christmas break, the projected budget deficit for FY19 was estimated to be $3.9 million. A month later it had ballooned to $6 million. How did the numbers change so quickly and dramatically?
  • $6 million deficits don’t just happen – who knew that we might be running into significant difficulties? What can be done to help the community to meet the challenges before they become large? Especially given what was just in the last issue of the Bethel magazine, which showed double-digit growth in adult and seminary programs, how did we get into this situation?
  • Who are we as an institution?  How do we need to change or how do we need to remain the same?

2017-2018 News Editor of The Clarion. South St. Paul native. Left-handed middle child, which explains everything. Avid adventurer; enjoys singing and playing guitar. | callie-schmidt@bethel.edu

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