Simpson budget woes


by Kimberly Kurimski

Simpson College has to make budget cuts to compensate for the low enrollment numbers this school year.

Because student enrollment is down 7.9 percent the budget needs to be changed accordingly.

Simpson College President John Byrd says enrollment and budget go hand-in-hand.

“The two are definitely connected,” Byrd said. “The fact that we’re down in enrollment means we have fewer dollars to spend in our budget compared to last year.”

Both Byrd and Ken Birkenholtz, vice president for business and finance, said the budget is down.

“There’s definitely a significant impact on the budget,” Birkenholtz said. “It was a little over $1 million negative.”

Budget cuts must be made to compensate for the loss in Simpson’s budget.

“We’ve had to make budget cuts pretty much all across the board,” Birkenholtz said.

One major cut that is being made is faculty and staff raises.

“We typically give raises Sept. 1, but that won’t happen this year,” Birkenholtz said. “That’s probably the hardest thing for everyone to swallow across campus.”

Talk about layoffs and salary cuts have been rumored, but Marv Van Wyk, chair of the budget liaison committee, thinks differently.

“I think it’d be highly unlikely that there are any faculty cuts and salaries (cut),” Van Wyk said. “There certainly may have to be reduction in staff, but we haven’t started discussing that yet.”

Other budget cuts include memberships to various organizations, travel expenses, conference expenses and diverse things in several departments.

There are four major sources that make up the budget.

“If you take tuition fees, room and board, endowment income and the annual fund that will be the vast majority of it (the budget),” Byrd said.

Tuition fees and room and board come directly from what students pay each semester.

“About 75 or 80 percent of our budget comes from students,” Birkenholtz said.

The endowment income fluctuates from year to year. Each year 5 percent of endowment is brought into the budget. About $2.5 million of endowment was included in the budget this year.

The annual fund comes from alumni and other friends of the college.

“In addition we bring in about $1 million each year in the annual fund, which are donations to the college that are unrestricted,” Byrd said.

Before any expenses are taken out, the gross budget is around $50 million according to Byrd.

Expenses taken out of the budget include financial aid, salaries, utilities and other numerous expenses.

One item that Simpson always has to fall back on is an emergency fund.

“We also have a contingency of about $700,000 we always have going into our fall budget, and we’re going to use about $400,000 of that to help offset the downturn,” Birkenholtz said.

Having an emergency fund is something that Simpson has benefited from this year.

“We build into the budget every year a contingency fund because you never know when something big is going to break or there might be an enrollment shortfall,” Byrd said.

A budget liaison committee made up of faculty helps give the college feedback and ideas on what actions should take place.

“Our committee would primarily be responsible for making recommendations and helping the administration make those decisions, but at this current time we haven’t started that process at all,” Van Wyk said.

The budget data has not been configured completely so the budget committee is unable to begin the process.

“We’re still waiting for some data so that we can make intelligent, thoughtful decisions or recommendations on those matters,” Van Wyk said.

Once the committee has the data it will begin analyzing it and those on the committee will be able to better understand exactly what effects the lower enrollment has had on Simpson’s budget.

“We will be trying to look at all possible options there is to see us through this rather stormy time,” Van Wyk said.

Through all the hardships, Byrd is confident that Simpson will be able to overcome this tough time.

“We’re in good shape, but we have some big decisions to make as we move forward to adjust the budget down to match our enrollment,” Byrd said.