The Board of Trustees will meet this weekend to discuss the University’s finances, strategic goals and increasing tuition prices.
The Trustees are expected to increase undergraduate tuition this weekend “below the average” of what peer institutions have announced, Executive Vice President Tallman Trask said.
Last year, the Board approved a 3.9 percent increase. This year, Yale University has announced a 4.8 percent tuition increase and Stanford a 3.5 percent increase.
Chair and Democratic state Sen. Dan Blue, Law ’73, said the Board’s Business and Finance Committee generally compares Duke’s proposed increase to peer institutions and debates the reasons behind increases before approving them. He added that part of the increase goes toward funding financial aid.
Part of the tuition and fee increase the Trustees will be asked to approve is a 6 percent board fee increase, Trask wrote in an e-mail. That decision may result in a $100 increase to the Dining contract fee next Fall, Duke Student Government President Awa Nur, a senior announced at Wednesday night’s DSG meeting.
The Board will also hear a financial update. At last year’s February meeting, the Trustees decided to cut $125 million out of the University’s budget over three years. Blue said the Board will continue to consider ways to reduce Duke’s deficit.
“If we can eliminate spending and not affect the quality of the institution and not affect what Duke is about, we will encourage Duke to seek those efficiencies and make those cuts,” Blue said.
Duke’s financial situation has improved since last year’s February meeting. President Richard Brodhead announced that the budget gap is closer to $100 million in his address to employees last Tuesday. He added that because cost-cutting measures have already reduced the deficit by about $50 million, the University is about halfway toward its goal.
“The economic climate has changed so much over the last year, but I still think we’ve weathered the storm fairly well,” Blue said. “We created several scenarios—doomsday scenarios—and those are the kinds of things you have to plan for and be aware of. You come back a year later and things are more upbeat.... We had the down period, but you have to look long-range, and that’s what we try to look at as a Board.”
But the University still has another $50 million to cut in the next two years.
Vice President for Finance Hof Milam said Duke appears “to be on track” to eliminate its deficit, but said the University will need to continue to make difficult decisions to cut expenses and look to increase its revenue.
Increasing tuition is “one of the few places [revenue] can increase right now,” Milam said. He added that academic programs, like the Masters of Engineering degree, approved by Academic Council Thursday and under review for approval by the Board this weekend, can also be revenue sources.
Still, Trask said it is up to individual units to make local trade-offs to continue to cut costs. He said the University as a whole will continue reviewing all proposals to fill vacant positions and keep costs down.
“It’s not going to be fun and its not going to be easy, but it’s doable,” he said.
As the Trustees consider the University’s finances, they will also consider its strategic goals and strategic planning for interdisciplinary institutes.
Trask said he expects the Board to consider “some small capital items” and internationalization efforts unrelated to the Kunshan, China site.
The Board will take a “big dive” into the University’s strategic plan and review its efficacy over the last five years, Blue said.
“We’ve got huge aspirations for this University... but we’ve got finite resources and in a time like the one we are experiencing... you have to deploy the resources in a way that you think will benefit Duke in it’s strategic choices not just five years from now, but 25 years from now,” he said.
Although Milam said Duke has dedicated more resources to its strategic goals than most, he noted that “our commitment outstrips revenue traditionally available to meet those commitments.”
Blue said he expects the Board to approve construction on K4, the fourth wing of Keohane Quadrangle. He said the Board will also discuss the construction of a new chilled water plant.
Michael Schoenfeld, vice president for public affairs and government relations, said the plant will include two large chillers and cost about $20 million.
Blue said the project is necessary to provide infrastructure for future campus expansion and changes.
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