Dormitories Will Not Close During BreakBy Jenny Zhang
ASSOCIATE NEWS EDITOR
To reduce operating expenses by $35 million this year, MIT will be taking measures that will include freezing employee salaries, closing the campus during part of winter break, and cutting up to 250 jobs, said Provost Robert A. Brown.
MIT’s net assets have dropped 2.1 percent to $6.9 billion in 2003, down from $7.1 billion last year, according to the 2003 Treasurer’s Report. Specifically, the endowment dropped from $5.4 billion to $5.1 billion. Brown has said that this fiscal year should be the last with decreased endowment, and that MIT expects to return to growth next fiscal year.
The endowment cannot be directly spent, but instead generates income through returns on investments. Hence a drop in returns on investment implies a drop in MIT’s income for that year, which cannot be made up by drawing from the endowment itself.
Salary freeze in effect this year
MIT will save approximately 10 million dollars by implementing salary freezes effective immediately, Brown said.
In an Oct. 27 letter to faculty and staff, Brown and Executive Vice President John R. Curry wrote that “there will be a one-year freeze on faculty, staff, and administration salaries on campus next year.”
The letter says that all faculty and staff whose base annual salary equals or exceeds $55,000 will not receive raises this year. Lincoln Laboratory staff “will receive very modest salary increases for [fiscal year 2005] based on performance,” the letter says.
Employees who work more than half time and have salaries between $54,000 and $55,000 will receive increases incrementally to bring their salaries to $55,000, according to the letter. However, Brown and Curry wrote that faculty promotions and the salary raises that usually come with them will not be affected by the salary freeze.
Dormitories not affected by closing
The MIT campus will be closed from Thursday, December 25, 2003, until Monday, January 5, 2004, according to the Finances Web site.
All MIT employees originally scheduled to work during that period will be paid as they normally would during that time of the year, said Curry.
MIT Medical and Police will be operating on a holiday schedule with reduced staff and will provide emergency services “like on any other holiday,” said Curry. MIT “will look and feel like it does on weekends and holidays, and whatever is necessary will continue,” Curry said.
Curry said that some laboratories or buildings that are always operational will not be forced to be closed, and that buildings or sections of buildings that would not be used during the closing would be put on a lower heating and lighting setting.
Director of Housing Karen A. Nilsson said that dormitories will remain open, since many students do not leave during this period. Housing will operate on a similar schedule to previous years.
“We never close. We will have house managers providing coverage across campus” and reduced maintenance and mechanics services, said Nilsson.
Director of Campus Dining Richard Berlin III said that the campus closing will not change campus dining operations, and that most likely, except for Christmas Day, at least one MIT food provider will be open. A schedule of the openings will be published to let students know where they can eat, he said.
The intention of this special closing is to cut some costs in services such as electricity and heating at a time when many employees would be on vacation anyway, as well as to give employees the benefit of paid vacation since there will be a salary freeze, according to the Finances Web site.
Curry said that he was unsure of how much money would be saved, and that they are currently working on calculations.
Impact on grad students neutral
There will be a reduction from 65 percent to 50 percent in graduate student tuition subsidies, which will generate $12 million in revenue, Brown said. However he said that graduate students would not directly feel the impact in the form of a drop in their stipends. Instead, MIT would charge more to outside contractors and faculty will have “less flexibility” in spending, so that graduate students will not be directly hit.
Brown also said that graduate student stipends would be adjusted as much as possible to account for the 60 percent increase in health insurance costs last June and general high cost of housing in Cambridge and Boston, since more graduate students are susceptible to the general housing market, unlike undergraduates living in dormitories or living groups.
Job cuts, hiring reduction in store
Brown said that there would be a freeze on hiring new administrative staff and that MIT would be “very, very conservative about hiring” academic staff.
Because hiring new faculty members is very costly in terms of both salary and laboratory resources and startup equipment, Brown said that faculty hiring would be decreased, but not frozen. He said that MIT would not stop hiring faculty because it could not “afford to get out of the market” and miss opportunities to hire excellent candidates.
He also said that research was very strong at MIT, and if positions were to open up, when possible, MIT would try to hire people already available within MIT instead of looking to the outside.
According to the letter by Brown and Curry, there may be up to 250 layoffs. Brown said that they will not be concentrated within one office or department, but rather spread all over the Institute.
Brown emphasized that MIT’s financial situation is not unique, and many other universities are facing the same challenges due to the general situation of the economy.
Cuts in core funding predicted
Brown said that of the anticipated $35 million reduction, only approximately $16 million will actually be generated by direct budget cuts in the administrative and academic areas. He said that the current plan was that there would be a direct budget cut of $3 million to the academic area and $13 million to the administrative area.
“Large blocks of core funding” would be decreased, and Brown said this means that the budget cuts would be distributed everywhere, instead of impacting a “single unit.”
For example, he said that originally $25 million would be set aside for renovation, but this year it will be cut down to $20 million. In addition, the Provost’s office will be allotted $8 million instead of $10 available for hiring and creating start-up packages, Brown said.
Brown said that target budgets had already been given to MIT subunits lead by deans, but could be adjusted. There is little concern that the goals will not be reached, because “people are very disciplined” and very good at operating under constraints, he said.
The MIT Finances Web site can be found at http://web.mit.edu/finances/.