Daily Herald the Brown
vol. cxliv, no. 6 | Wednesday, January 28, 2009 | Serving the community daily since 1891
simmons REPORTS huge losses
Endowment stands to lose $800m Deep budget cuts to come as U. tightens belt By Brigitta Greene Senior Staff Writer
Kim Perley / Herald
Top University Hall officials shed light on Brown’s dark financial situation Tuesday.
Budget an obstacle to ambitious plans by Jenna Stark News Editor
With the University expecting to lose $60 million in planned operating revenue due to huge endowment losses, budget cuts and tempered ambitions may dominate the University’s planning for the next several years. Initiatives central to Brown’s recent plans that are likely to slow or halt because of the souring economy include expansion of the faculty and of graduate programs, while the University expects to slash administrative budgets and all but do away with salary increases for the near future. “The best estimate we can make at this time is that we need to reduce projected annual expenditures by approximately $60 million” compared to previous budget projections, President Ruth Simmons wrote in a campus-wide e-mail announcing the news Tuesday. However, the decision to reduce
the number of new faculty hires for the next fiscal year will not have a large effect on the University, said Dean of the Faculty Rajiv Vohra P’07. “In a natural way we were already coming to the end of the faculty expansion,” Vohra said, adding that he still expected a small increase in the faculty next year. The Plan for Academic Enrichment, when it was first announced in 2002, aimed to expand the faculty by 100 positions, and about three-quarters of those positions have already been filled. Still, the University may be more hesitant to fill vacated faculty positions. “I think that it’s going to be difficult, nearly impossible, to get new faculty positions,” said James Dreier, professor of philosophy and chair of the Faculty Executive Committee. “In some cases it’s going to be difficult to replace faculty who leave.” But the postponement of the expansion of the Graduate School will
See page 4 for highlights from Simmons’ e-mail likely have major consequences. The expansion of the faculty has not been matched by commensurate growth in the Graduate School, leaving faculty without enough graduate students to fully support their research and teaching needs. The FEC requested in March that the University slow the hiring of additional faculty to help stymie the problems created by the lack of support. However, given the current economic situation, Brown has been unable to move forward with one of the original goals in the Plan for Academic Enrichment — to increase the size of the graduate school. “It will make research more difficult,” Dreier said, adding that “in teaching, we expect there will be some pressure on TAs.”
Confronted with staggering losses to its endowment, the University plans to scale back nearly all of its most ambitious goals in the years ahead, President Ruth Simmons announced Tuesday. The University has adopted a “working assumption” that the endowment, valued at $2.8 billion in mid-2008, will be worth $2 billion at the end of June, according to Simmons. The dramatic news, announced in a campus-wide e-mail from Simmons Tuesday afternoon, came amid violent market turmoil and economic contraction that has rocked the country especially hard since the fall. As 2008 came to an end, Simmons wrote, administrators faced “significant credit, liquidity and revenue constraints on our near-term planning.” The expected losses to the endowment mean its payout to the University’s operating budget will fall $40 million short of projections, officials said. Combined with expected fundraising shortfalls and increased
demand for financial aid, officials will need to slash $60 million from next year’s budget, said Richard Spies, executive vice president for planning and senior adviser to the president. As credit markets froze, large American banks failed and a series of peer schools announced unprecedented losses in recent months, the University before yesterday had remained largely silent on the health of its endowment. The last time the University publicly announced details about its investments was September 2008, when Simmons reported that the endowment grew by a modest 6.3 percent in the 12 months ending that June. That figure compared favorably with Brown’s competitor schools, many of whom witnessed stagnant or negative growth during the same period. But if officials’ current estimate proves correct, the endowment will have lost almost 30 percent of its value in just one year — approximately $800 million. In her e-mail, Simmons outlined a number of avenues to trim expendicontinued on page 2
Year-end total value of Brown’s endowment $3.0b 2.5 2.0 1.5 1.0 0.5 0.0
FY97 F798 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 (anticipated) Sources: FY97-07: U. report to the Senate Committee on Finance, Mar. 3, 2008; FY08: The Herald; FY09 projection: President Simmons’ campus-wide email
continued on page 2
UCS to fight pre-reqs, push for young alum seat on the Corporation By Ben Schreckinger Senior Staf f Writer
inside
The Undergraduate Council of Students’ aspirations for this semester include lobbying the University to end enforcement of prerequisites on Banner and advancing an effort to create a seat on the Corporation for a young, recent alum, members of the council’s executive board said. Last semester “totally exceeded my expectations,” said UCS President Brian Becker ’09. Becker also
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said he wanted to increase transparency in the student governing body and boost community engagement, bringing in members of the administration to weekly meetings. Becker said President Ruth Simmons will attend a meeting this semester and he hopes Chancellor Thomas Tisch ’76 will do the same. UCS continued its opposition to the enforcement of prerequisites Tuesday, making a presentation to a meeting of the Faculty Executive Committee.
The council passed a resolution expressing its disapproval last semester when Banner started blocking students from registering for courses if their records lacked the formal prerequisites unless a professor gave them an override. “We’re not against the idea of prerequisites” when they are used as guideposts for students, said UCS Academic and Administrative Affairs Chair Tyler Rosenbaum ’11. But Rosenbaum, a Herald opinions columnist, said he worries about
“a very slow chipping away at the New Curriculum and what it stands for.” “We don’t want there to be a death by a thousand cuts,” he said. Members of the executive board said they also hoped to work with the Corporation in coming months to discuss adding a permanent seat on the board for a recent alum — a proposal that is aimed at bringing the latest concerns of students to the attention of the highest-level
decision-makers. “Corporation members are very out of touch with student experiences,” Becker said. “They don’t understand what it’s like to be a student in 2009.” Along with advocating for “new blood” on the Corporation, Becker said he planned to introduce forums for informal interaction between students and Corporation members. “I would be surprised” if the Cor-
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