Amended budget goes to Board
by Eric Smith
Budget considerations for the next academic year, submitted to Senate last month, will now go to the Board of Governors with a few modifications.
In her outline of the current context, Vice-Principal (Administration and Finance) Phyllis Heaphy anticipates a grant cut from the provincial government of $18 million. This year, McGill's government grant represents a little over 70% of the University's total operating budget and amounts to approximately $200 million. The actual amount of next year's cut has not yet been announced. It will depend both on the final figure for total provincial post-secondary cuts--currently anticipated at $130 million--and the Ministry's decisions on amending the formula for distributing the total grant amount across the provincial university network (Reporter, January 13).
But even as it tries to put together its budget for next year, McGill is encountering some nasty surprises for this year. As part of the provincial government's public sector cut, the University was informed at the end of February that it will be receiving close to $1 million less than anticipated in its March grant from Quebec.
That money will have to come out of this year's surplus of $6 million. The surplus was planned to cover the costs of this year's early retirement package. It is a little higher than expected thanks to low interest rates.
In order to return McGill's operating deficit to its 1995 level of $66 million as targeted in the budget model, the University will need to produce a surplus again next year. And that will mean that additional revenue or cuts will have to be made on top of those outlined in the current model.
Some options under consideration include using the money from the sale this year of HostExplorer, a software package developed at McGill, to Hummingbird Technologies. But since this is one-time-only income, Heaphy said she hopes to find a more creative use for it. "I would prefer not to spend it to balance the budget. That would be going into a black hole. Ideally, we would save all or part of it and set money aside for computing services."
McGill is also consulting with the government on the possibility of keeping all tuition revenue from international students and forgoing the corollary grant. This would represent $3 million in additional income for McGill, but according to Heaphy, "This is a very slow process. We're just starting discussions."
In the current model for next year, the cut does not target specific academic areas in the University. Faculties will see their operating budgets reduced by 6% across the campus. At Concordia, budget discussions have included the possibility of shutting down some programs, but no similar exercise is under way at McGill, according to Heaphy.
The across-the-board cut is manageable, Heaphy says. "It can be done. But it is very painful. It means not replacing professors, increasing class sizes."
On the revenue side, the budget model plans to offset some of the shortfall by increasing administrative and academic services fees for students. Additional charges will total $255 per student and will, combined, bring in a little under $6 million in revenue. The additional charges have been reduced by $10 from the initial model presented to Senate.
"This is not a disguised tuition fee," according to Heaphy. Part of the extra money raised will go to new financial aid resources. Altogether, the budget model plans to contribute $3.8 million to student aid and scholarships. This is the first time aid monies are to be drawn from the operating budget. The increase was deemed necessary because of the province-mandated tuition increase for returning out-of-province students. The current model calls for 82% of the additional aid money to be disbursed in the form of scholarships and bursaries, with the remaining $700,000 going to loans.