Dal grappling with $17.5M deficit

Students could see tuition increase next year to help balance books

This story has been updated since initially published.

The Financial Services, in Dalhousie’s Henry Hicks building, released the Operating Budget Report yesterday. (Photo Credit: mricon)

Dalhousie must find $17.5 million to balance its operating budget. The news came in a discussion paper released by Dalhousie’s Budget Advisory Committee.

The report attributes cuts in provincial government grants for the shortfall in the school’s operating budget. The province has trimmed its transfer to Dal by a combined 10 per cent since 2011, resulting in a grant reduction of $16.6 million. That 10 per cent includes a three per cent cut from this year’s grant, removing $4.9 million this year alone. Government grants make up more than 54 per cent of university operating revenue. The report states the constant cuts to grants makes future financial planning difficult.

The provincial government also capped tuition increases at three per cent for all programs except for law, medicine and dentistry, as well as international students’ tuition.

Dal’s vice-president of finance administration, Ken Burt, called it “the perfect storm.”

“The perfect storm for Dalhousie was a reduction in government grants, increased pension costs, and declining student enrolment.”

Dalhousie’s board of governors requires the school to have a balanced budget. The Budget Advisory Committee expects to have an action plan for erasing the deficit to present to the board by the spring.

The report outlined a few early solutions to the deficit.

The school could increase tuition fees up to three per cent, which would mean an extra $3.7 million in revenue. International students and students in law, medicine and dentistry programs could see tuition hikes greater than three per cent.

“What we really have to look at when we’re setting our tuition fees in those programs is comparable fees to similar institutions in the country because we have to be competitive.”

For perspective, students at Dal would see an extra $1,009 added to their tuition costs to cover the entire deficit.

There is a potential for the school to cut 7.5 per cent from academic faculties and services . The 7.5 per cent decrease would cover the entire deficit. A one per cent cut represents about $2.3 million freed up from the budget.

Dal’s preference is to minimize cuts by reviewing accumulated financial reserves and additional revenue opportunities A one per cent increase in enrollment equals approximately $1million.

Dal has already made significant cuts to faculties and services. A combined six per cent has been taken from faculties in the past two years, while cuts to services have been just below six per cent.

Burt says Dal has a $260 million deferred maintenance shortfall.

“There’s leaky windows, there’s places where water drips. The roofs are leaking. There’s just a whole bunch of issues that need to be addressed that we just haven’t been given money to address.”

The Budget Advisory Committee is looking for feedback from the Dalhousie community before the final operating budget is released in June. Written feedback can be sent to Susan Robertson of Financial Services before Feb. 6, 2013.


Read the discussion paper on the 2013-14 operating budget, here:

Update: Jan. 18, 10:50 a.m.: Document added