Hillsdale College’s budget will increase by $3 million next year, and students will have to pay about $950 more a year in tuition and room and board as a result.
That number is only a 3 percent increase in tuition cost, said Vice President for Finance Patrick Flannery. Flannery said students should also expect a 4 percent increase in room and board costs for the upcoming 2012-2013 academic year.
Flannery said a 3 percent increase in student tuition was the lowest Hillsdale College could possibly go.
“I’m proud of that 3 percent,” he said.
The college is increasing its budget from $57.6 million (2011-2012 academic budget) to $60.5 million. The college’s fiscal year is from July 1 to June 30, and the budget will go into effect at that time.
“The necessity for the rise is to cover our increased costs,” said Controller in Financial Affairs LeAnn Creger.
Flannery said the budget increase is mainly due to inflation. Factors such as newly hired faculty and the implementation of the new core also require a larger budget. Student tuition makes up for a little less than half of overall college revenue — next in line being revenue from gifts to the college and revenue from the endowment.
The college begins working on the budget as early as September every year, Flannery said, beginning at the individual department levels. Departmental heads review their costs and needs before submitting a preliminary report to Flannery, typically in December. Flannery reviews the requests made by the departments and compares the costs with the college’s revenues. The rough budget is then sent to President Larry Arnn, who sends it to the Board of Trustees. The academic budget is finalized in May.
“The budget planning cycle for the next fiscal year is drawing to a close, and a generally volatile economy encourages caution,” Provost David Whalen said.
Flannery said that although the budget is increasing, it is still a balanced budget.
“We have never had a deficit since I’ve been here,” Flannery said. “The Hillsdale College family is very responsible fiscally.”
There have also been measures taken this year to reduce costs campus wide, Flannery said. Vice President for Administration Rich Péwé initiated the energy savings plan this year. Also, Flannery said the college’s overall attitude about hiring new staff helps keep costs down because the departments only hire someone when they absolutely need to.
“[Hiring] is taken seriously here,” he said.
Flannery said he is proud of the way the college has kept costs down throughout the recent economic downturn, pointing out that the tuition costs did not increase after the initial recession of 2008. Flannery said when colleges mismanage their finances and spend more money than they bring in, there is one group bears the brunt of that.
“It ends up directly affecting the students,” he said. “[Colleges] have to increase tuition.”
Creger said the budget, which still must be reviewed by the Board of Trustees before being finalized, is not likely to need any major changes. But the final decision on faculty salaries has not been made yet, she said. Staff salaries and benefits, along with campus maintenance, are two of the college’s major costs.
“To me it’s always making sure the investment goes where it needs to go,” Flannery said. “We try to spend it where it needs to be spent.”
