Finance VP Says Big Changes Ahead
The Institute’s budget is balanced, but James Watters, senior vice president for Finance & Administration, is not satisfied. After reviewing the current picture, he predicted several changes at the Dec. 9 Staff Council meeting.
Tuition growth will need to slow, said Watters, because families will have less money. “We cannot rely on charging families more and more and more into the future as we have done in the past decade, in the past two decades,” said Watters. “The days of us charging them three times the rate of inflation are over.”
Enrollment growth, too, may need to slow. The Institute planned for an additional 200 tuition-paying students in this year’s budget, but admitted 247. The money from the extra students came in handy to cover budget holes. “This is the way we’ve survived for a long time now,” Watters said. “[We] have lots and lots more students coming in every year in order to drive the revenue picture.”
But the Board of Trustees has been wondering how big the Institute should get, Watters said.
The Institute has weathered tough times, but there may be more ahead. “We’re going to need to re-stack the deck as far as some of these expenses, and spend a little differently,” Watters said. “We can do it in a way, ahead of any problems, so that no one’s negatively impacted.”
He expressed some frustration that study abroad programs were costing the institute money. Tuition dollars are sent to the universities where students study abroad, which means less money for RIT. Watters sees the Institute’s global campuses in Dubai and Croatia as a solution to that problem. “We should be driving our students through those because we can keep money inside the system,” he said. “There needs to be an appropriate balance here, but about $685,000 is now leaving us to go to other schools.”
Watters also touched on why alumni donations are low compared to other universities. He said it was due in part to the limited wealth of many RIT alumni. Roughly 50 percent of alumni graduated in 1990 or after. “[They] haven’t had a chance to accumulate wealth yet,” he said. Many alumni graduated before RIT started granting four year degrees in 1954 and only have certificates from RIT. And alumni outreach efforts were minimal until recently.
Other schools can tap their endowment to pay for financial aid, but because of limited gifts from alumni, RIT’s endowment is too small to do that, Watters said.
To illustrate the disparity in gifts, Watters cited the University of North Dakota, which recently received a $100 million check from one alumnus to build their new ice arena. “The guy owns a casino in Las Vegas,” said Watters. “That’s who we need. We need one of them.”
But with alumni wealth increasing and the current level of outreach, Watters believes gifts will grow. “I suspect we’re going to do a much better job raising funds in the future,” he said. “Great universities grow through gifts.”
Anna Fiorucci, a staff assistant in the School of Mathematical Sciences, asked why beautification projects are receiving priority over other needs. She cited the millions spent on new bike paths and a brick fašade for Orange Hall (ORN, 13) as evidence. “For students, they want to know why they don’t have more classrooms, more faculty,” Fiorucci said. “From the staff standpoint, we want to know why we only get 2 percent raises.”
Watters responded that beautification had been made a priority nine or 10 years ago after studies showed students hated the campus. “They were adamant to us in their response to us about how cold, uninviting, how corporate it felt,” said Watters. “It didn’t feel like a campus. It wasn’t the environment they expected. And you saw 40 percent of our students leave. We have, historically, an atrocious retention record.”
Other universities also ramped up their spending on construction, said Watters, because potential students expected better housing and prettier campuses.