University Business - August 2008 - (Page 19)

VIEWPOINT Budget Crises Create Opportunity Embracing a chance for change during diﬃcult times By Rocky Young O NE OF THE MOST VALU able opportunities created by budget problems is the chance to put in motion some long-awaited changes for your college or university. These types of changes—even positive ones—can be diﬃcult at any time, but they are often easier to accomplish in times of ﬁnancial crisis because everyone recognizes that sacriﬁces must be made. Still, it’s important to be focused and selective, by ﬁrst increasing revenue, then making the unavoidable cuts. INCREASING REVENUE Surprisingly, most students would rather pay higher fees than see cuts made that directly aﬀect them. So instead of simply reducing expenditures, ﬁrst focus on revenue. Some potential sources of revenue include: • Fee increases. Such an increase can be considered if it is clearly relevant to the student and is not a general, across-theboard increase. • Sponsorships. These usually take the form of targeted advertising and can be done in a tasteful manner that also creates a new partnership with possible future beneﬁts. • New enterprises. A variety of new college enterprises exist as possible sources of income. These vary depending on the speciﬁc programs and situations at each higher ed institution. The most important idea is to explore the variety of public-private partnerships, ranging from joint training programs to energy sources to joint-use enterprises. • Real estate. Consider developing real estate assets—either by selling unused col- Across-the-board cuts are politically easier, but are not reasoned reductions. lege land or by utilizing it to facilitate a public-private partnership or other enterprise, as mentioned above. MAKING SURGICAL CUTS After fully exploring revenue possibilities, it is time to consider expenditure reductions. Be sure they are done in a manner that maximizes revenue. Too often cuts are made that do very little to improve the college’s ﬁnancial position because the resulting reduction of revenue is nearly as great as the reduction of expenditures. Be a surgeon, not a butcher. Take your time in deciding where to cut, and how. Consider previously set priorities, and don’t act in the heat of the moment. Making across-the-board cuts is politically easier, but unilateral cuts are not reasoned reductions. Try to reduce expenditures in a manner that makes the most sense for students and the institution based on recent experiences and data. While considering which changes to make, keep in mind that the most eﬀective changes result when student demands drive the decision-making process. For instance, when cutting course offerings the goal is to keep enrollment as high as possible by simultaneously increasing the average class size. How might that be accomplished? By preserving—or even increasing—the number of general education introductory sections and decreasing the number of specialized classes. This option is not without potential conﬂict. At most IHEs, the student demand is for more introductory classes. On the other hand, faculty typically want to teach more specialized classes in order to broaden the curriculum. While this argument has merit, it cannot be maintained on a large scale during tough ﬁnancial times. Instead, the introductory courses need to be preserved and the specialized courses either placed on hiatus or oﬀered on a rotational basis (once per year or once every other year). This is reasonable as long as the dates of the oﬀering are published so that students can plan accordingly and any transitional problems are handled. OTHER CONSIDERATIONS • Align the timing of course oﬀerings with maximum student demand. Take into account the time and day a course is oﬀered and the coordination of that course with companion courses. Just as discrimination must be used within a discipline, the same level of critical analysis must be used between disciplines. Not all disciplines should receive the same level of cuts. • Make smaller cuts to disciplines with greater demand and larger average universitybusiness.com August 2008 | 19 http://universitybusiness.com

Table of Contents for the Digital Edition of University Business - August 2008

University Business - August 2008
Contents
College Index
Company Index
Advisory Board
Editor's Note
Behind the News
Sense of Place
Viewpoint
On the Hill
Future Shock
Independent Outlook
Community Colleges
Dorms of Distinction
Streamlining Admissions: Opening the Front Door
E-mail, Gmail, and Beyond
EduComm Deals a Winning Hand
What's New
End Note

University Business - August 2008