One of the things that is very much on our minds concerns why the university is doing TransformUS.
TransformUS is one of seven strategies we are following to bring the university’s budget into sustainable balance.
At root, the issue is clear and simple: as a university we need to live within our means.
We have entered a post-secondary environment where 2% funding increases from government are likely the most we can expect in the foreseeable future. Meanwhile our costs have been growing by more like 5% pretty much every year for the last decade. A gap of a few percent may not sound like much, but on a $400-500 million operating budget (growing over the years) it amounts to a lot of money. And these shortfalls will be additive: roughly $10 million in year one, $20 million in year two, and so on. We have presented the more exact projections in town halls and on the finances website. The result would be a $44.5 million gap by 2016 – a growing deficit if no action were taken.
Fortunately, unlike some universities that have seen steep cuts, we are not facing an immediate large deficit. There is no financial crisis. We have time to prevent a large deficit from occurring. To do so, we need to cut costs, increase revenues, and narrow what we do to what is most important. We have to be sure we can fund what we do within reasonable projections, not proceed wishfully and hope that future growth will bail us out.
TransformUS will do three important things for our university. It will provide a basis to find $20-25 million in savings, a target identified for TransformUS by the president as prudent in light of overall financial projections. It will direct $5 million of the savings to high-priority initiatives. And it will help us learn prioritization as an ongoing way of thinking and operating.
All of this is in order to sustain the things we most care about as a university: learning, discovery, and positive impacts for students and communities. We need to manage our resources well in order to be free, and autonomous, and successful, and highly regarded, which are the things all people in universities hope for.
Brett and Greg