Subject: Update on SAS and the Economy
To: SAS Faculty and Staff
From: Rebecca W. Bushnell
Date: March 16, 2009
As I am sure you are all aware, the global economic turmoil has continued since I wrote to you last fall, and it shows no sign of abating soon. Recently President Gutmann sent the entire University an update on the effects of the economy on Penn as a whole (you can see her statement at http://www.upenn.edu/pennnews/economy.php). In turn, the leadership of SAS has been working closely with chairs, directors, and other faculty and staff to plan SAS's budget for the upcoming year and beyond.
As a follow-up to the President's message, I'm writing you now to give you a sense of the issues affecting our planning here in SAS.
You will remember that last fall we announced a series of management actions designed to keep SAS financially stable in the face of declining revenues. We had already significantly slowed faculty hiring, given our recent rapid growth. These new measures included a staff hiring freeze and a 10% cut in current expense budgets for all departments and programs. We also reduced the scope of several of our building projects.
These actions are essential to securing our future, and I deeply appreciate that the faculty and staff have worked hard to make and sustain these cuts.
You may be aware that our peer universities are experiencing similar problems, some much worse than ours. Many have instituted faculty and staff hiring and salary freezes (and in some cases, layoffs) and stopped major construction projects. Some have reduced graduate student admissions.
Since last fall, the economy has slowed further. The Trustees have announced that the increase in tuition and fees for next year will be 3.8%, the lowest increase in over 40 years. This lower increase is essential to keeping Penn affordable for our students, but it will also have an impact on SAS's budget, which is highly dependent on tuition. Further, we must now anticipate a higher demand for financial aid, which comes largely from the SAS operating budget. The decline in the value of the endowment is greater than was anticipated last fall. While only 7% of SAS revenue comes from endowment, we will still feel the reduction in income. Finally, while the SAS development staff and I work hard to raise money for the capital campaign, the pace of fund-raising will abate while there is still so much economic uncertainty.
In the coming years, our highest priority will be to sustain the quality of our core mission: providing outstanding undergraduate and graduate education and supporting our faculty's essential research. However, all of us in SAS are going to have to come to terms with the fact that with budget cuts and plans to reduce the standing faculty and staff by 5-8% over the next 3-4 years, there will be less money and fewer people to help us get this important work of teaching and research done. This is not going to be a short-term situation: the consequences of this down-turn will be with us for quite some time, and SAS will have to adjust to these new circumstances.
There is good news, in spite of everything. We have made a commitment to increase graduate stipends next year, and the quality of this year's applicants is exceptionally high. Applications to the College have held steady and we can expect a new crop of diverse and talented undergraduates next fall. The federal stimulus package promises significant support for scientific research and the renovation of facilities in the next two years.
If all of us continue to be both prudent and innovative in our efforts to steer SAS through these troubled times, we will remain a great school. SAS rests on a solid foundation, with excellent faculty, staff, and students and sufficient financial resources to get the most important work of teaching and research done. There will be many things that you can do to help sustain us in the short and long term. I will be relying on your energy and your creativity to find ways to solve problems, work more efficiently, and reduce our expenses. There may be things we don't need to do anymore, and there are surely ways to combine our talents and resources to do things better.
In the coming months I hope to meet with as many of you as possible, to hear your concerns and your new ideas. I am available to attend department meetings and can arrange special sessions for faculty and staff as needed. As the semester progresses and we have more concrete information about budget and salary figures for next year, I'll be writing you again. In the meantime, feel free to contact me as well at sasdean@sas.upenn.edu.
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