Student Fed members are inducted. Emily Blatter | Collegian

Hillsdale College’s Student Federation must reduce its spending to guard against future financial problems, after operating at a deficit for the past several years, Treasurer sophomore Ross Hatley said during the federation’s March 23 meeting.

This semester, the federation has already spent its $10,000 discretionary fund, and Hatley said he expects Student Fed to run at least a $4,000 deficit. Hatley outlined the 2016-2017 budget in preparation for the creation of a new budget to address these financial woes in preparation for the coming school year.

Student Fed has a budget of $100,000. But after it spends the money earmarked for campus publications, senior-class expenses, federation leader salaries, and planners, the governing body only has about $10,000 per semester to fund student clubs and events.

“We’ve been spending more than our income almost every semester for the past few years,” Sophomore Rep. Thomas Ryskamp said. “We’ve been drawing into our surplus that they discovered some years ago, but, of course, that’s not sustainable, because eventually that surplus is going to run out…Eventually someone’s going to get less money, and either we or upcoming federations will have to decide who that’s going to be.”

The federation accumulated a surplus amounting to $78,389.21 in 2013, after several decades of mistaken accounting, Hatley said. The federation, however, has had to dip into the surplus funds to make ends meet every semester for several years, and the deficit spending has reduced the surplus to less than half, about $30,000.

Hatley said it looks like Student Fed is incurring other costs, including phone lines connected to four computers in the Knorr Student Center. Hatley said Student Fed is investigating how the federation came to cover these costs.

But cutting extraneous spending will not be sufficient to eliminate the deficit, Hatley said. The federation will have to cut back on its spending or run the risk of bankruptcy when the surplus disappears.

The federation could begin the process of drawing back as early as this year, Ryskamp said.

“It might happen,” he said. “It’s likely that we’ll continue spending the surplus as long as we have it, but we need to, at some point, change our thinking, because we don’t have an unlimited supply of money, although it seems like it right now.”

Student Fed needs to be proactive about controlling the chronic deficit spending to prevent the problem from becoming dangerous, Freshman Rep. Matthew Montgomery said.

“Right now, Student Fed is in a good position, but we cannot continue spending money the way we have been, even though there is no immediate issue,” Montgomery said. “I think the solution is re-evaluating certain expenses that we have.”