Budget Balanced

April 01, 2004, vol. 29, no. 7
By Diane Luckow



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Hundreds of possible scenarios discussed to mitigate a $10.5 million deficit.

SFU will balance the 2004/05 budget by raising tuition fees 15 per cent and reducing the non-salary budget by 4.2 per cent.

The budget was set after dozens of community meetings and the discussion of hundreds of possible scenarios to mitigate a $10.5 million deficit.

Until the provincial government's recent announcement restoring $4.34 million of an $8 million reduction to this year's operating grant, the university was staring at a $15 million deficit. A deficit that large would have resulted in a higher tuition increase - some scenarios pegged it at 35 per cent - and a larger and potentially damaging budget cut.

There aren't any more budget breaks on the horizon, however, and the university's proposal to the SFU board of governors at the end of March represented the best efforts of the SFU community to deal with the deficit while maintaining educational quality and student accessibility.

Pat Hibbitts, VP-finance and administration, says operating expenses for 2004-05 are up 7.3 per cent, or $18 million over last year. These include commitments to the double-the-opportunity program to provide more student spaces in computing and engineering, as well as salary and wage increases attributed to step or progression through the ranks, market differentials on salaries to attract and retain faculty, start-up funding for the new health sciences faculty, expanding university programs, the new U-Pass expense, the expansion of the third floor at Harbour Centre and increased funding for the department of advancement in order to achieve higher targets for donations and gifts.

The budget proposal accepted by the board of governors recommends a base operating budget of $268.3 million and a 15 per cent increase in basic tuitition fees, with $1.3 million of the tuitition increase earmarked for scholarships and bursaries.

Pondering ways to balance the budget involved a lot of considerations, says Hibbitts.

Tuition increases were inevitable, she says, but at what level? Students had already borne increases of 30 per cent in each of the past two years. Fortunately, the restoration of the $4.3 million grant provided some relief. “We felt the benefit of the restored grant should accrue to the students,” says Hibbitts, “so the tuition fee increase is much less than originally anticipated.”

Scholarship and bursary awards were another consideration. In the last two years, 25 per cent of the tuition increases were set aside to fund these awards.

“SFU remains committed to funding scholarships, bursaries and awards,” says Hibbitts. “With a 15 per cent tuition increase, we have established a 15 per cent set-aside for the coming year. And, to continue to meet the needs of students from less privileged economic backgrounds, we have placed an additional $985,000 in the bursaries budget.”

Also to be considered was the impact of potential budget cuts. Did existing faculty and departmental budgets have enough room for cuts without affecting people's jobs? “Above all,” says Hibbitts, “we wanted to protect faculty and staff positions.” She says no layoffs are anticipated but some departments may choose not to fill vacant positions

As Joe van Snellenberg, budget officer for the faculty of applied science points out, a 1.3 per cent cut to budgets, after salaries and wages, can be significant. Hibbitts says it translates into a 4.2 per cent cut to non-salary expenditures, which will be applied equally across vice-presidential portfolios. Individual departments, says Hibbitts, are encouraged to use any available carry-forward funds (monies saved from previous budgets) to buffer the impact of the cut this year.

“The student society raised some interesting issues around our budgeting,” says Hibbitts. “They said there hasn't been any rigor around lining up budgets with actual expenditures.”

She agrees. “We should have more open and transparent and understandable information and we will be working on that.”

“The students put a face on the issues and spoke at each meeting and with a great deal of credibility,” says Hibbitts, who was impressed at their ability to understand the extremely complex information. “They did have a mitigating influence on the extent of the tuition increase.”

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