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Meeting Centers On Budget Cuts

By Vipul Bhushan
Night Editor

Tuesday's noontime town meeting, which focused on the MIT budget deficit and impending staff cuts, drew a crowd consisting mainly of faculty and staff to the Sala de Puerto Rico. The audience's biggest concern was how the administration would reduce the number of employees in the face of increasing budget deficits.

President Charles M. Vest, Provost Mark S. Wrighton, and Senior Vice President William R. Dickson '56 addressed audience members' concerns.

At the two-hour forum, Vest said the budget deficit would be solved by reducing the operating budget by $40 million over the next three years -- actually $25 million after indirect costs have been charged.

Budget cuts will reduce the staff size by 400 over the next three to four years, Vest said. The staff currently numbers about 8,000.

Along with the staff cuts, the faculty will be trimmed through attrition by about five percent over the next decade, and the number of graduate students will most likely be trimmed, Vest said.

Few of those in attendance were students, though Wrighton said he remained "receptive to interaction with student groups" and student leaders to gather student input to the deficit reduction process.

`In a budgetary vice'

Vest opened the gathering by describing MIT's predicament. The Institute is caught "in a budgetary vice" because its expenses continue to outstrip its revenues, he said.

"We don't have all the detailed answers" to these problems, Vest said, though the Institute is "going too far into deficit spending," and cannot have its future hobbled by it.

The Institute "cannot balance its budget by increasing tuition at faster and faster rates," Vest said.

The research volume has been growing, as has the endowment, but these have not been sufficient to meet expenses, he said.

Vest invited audience members to identify areas of concern. The three panelists then took turns addressing the two dozen or so issues raised.

Mechanism for staff cuts

All three panelists discussed the mechanism for reducing the number of employees. The administration would "take out the work that we don't need to do" before removing employees, Wrighton said.

Wrighton does not expect that early retirement would be offered, nor does he anticipate a salary freeze, which would yield a savings of $8 million, he said. He does expect "constrained but meaningful compensation in the years ahead."

Bargaining unit provisions, if applicable, would be used to determine who will get laid off, Dickson said. For others, length of service, skills, and retraining potential would be among the factors considered.

The already high employment turnover means that some of the staff reductions will not need to be made through layoffs, he said.

Dickson also said the Institute would "look carefully at opportunities for out-sourcing" some of its operations.

Since the biggest chunk of employees are part of the administrative, support, and service staff, the biggest staff cuts would be in this area, Vest said. He noted that changes in federal defense policy prompted layoffs at Lincoln Laboratory last year.

In addition, over the next 10 years, the size of the faculty will shrink through attrition from 950 to about 900. The policies concerning faculty promotion and tenure will be reviewed within the next year, Wrighton said.

MIT needs to maintain reputation

"Morale is up to you," said Vest, addressing the audience. MIT is not facing a crisis, but "we face difficult times ahead of us," he said. The administration will try to "minimize pain, but [it has] a responsibility to keep the Institute strong."

Vest identified criteria for measuring the success of this endeavor to reduce the budget deficit. The budget must be balanced, and MIT must be maintained as one of the preeminent institutions in the world, primarily focused on science and engineering, he said.

Dickson foresaw little effect on employee benefits, though he cautioned that federal law may impose changes on areas like health care. He also said parking fees would be considered.

Vest observed that MIT's full service medical department takes "a big piece of the financial pie," and therefore "must be looked at very carefully."

Vest said that maintenance and improvements to MIT's physical appearance would continue. "Students pay heavy tuition. We owe them good living conditions and good learning conditions," he said.

The meeting was broadcast live to viewers in the mezzanine lounge in the Student Center, and was rebroadcast on MIT cable last night.