MIT's evolving plan for coping with the growing gap between income and expenses was outlined by President Charles M. Vest at the October 20 meeting of the faculty and includes a $25 million net cut in operations over the next four years and a work force reduction of about 400.
In facing the fiscal constraints posed by the FY 1993 deficit of $10 million and the projected $13.6 million deficit for FY 1994 , Dr. Vest said it is imperative that MIT maintain excellence and the flexibility to evolve and innovate.
"The biggest danger is that we may lose this flexibility," he said.
While stressing the evolving nature of the Institute's fiscal battle plan, Dr. Vest said there is a consensus that MIT must strive to maintain its lead position as the premier institution of higher learning focused largely on research and education in science and engineering.
"We also believe that we should maintain need-blind and merit-based admissions," he said.
"We must do this to maintain the access of bright young men and women to our programs."
It is also important that faculty and staff be compensated "consistent with their high quality."And, Dr. Vest said, MIT "will certainly not step back from our commitment to increasing diversity in our faculty, staff and student body. This goal will remain a high priority despite budget constraints." An overriding challenge is the need to improve the efficiency of operations and services, the MIT president said.
"We must learn how to operate more effectively with a smaller work force."
More detailed information will be provided in a special issue of MIT Tech Talk in the first half of November, he said.
In the meantime, Dr. Vest said, Provost Mark S. Wrighton and Senior Vice President William R. Dickson will join him in spearheading the continuing effort that will include the appointment of cross-functional teams in many areas, assisted in some cases by outside consultants, as the Institute goes about the important task of "finding out how to do our jobs differently and better." The need to make a force reduction is "crystal clear," he said, especially in an organization in which the budget "is so dominated by salaries and benefits."
Some of the job reduction may occur by attrition, he said.
In any given year, the Institute "has very substantial turnover in its employee base. That means that if we are willing and have the ability to understand better. how to do some retraining, some redeployment, we may be able to considerably ameliorate the pain and let a fair amount of this occur by attrition."
Dr. Vest also said that a slight reduction in faculty also was being contemplated.
Graduate enrollment will probably be reduced about 10 to 20 percent, he said, a change he said was driven in part by the federal government's revisions in how it treats indirect costs of research. Those changes, he said, "tell us that we are not going to be able to support the same number of RAs (research assistants) and TAs (teaching assistants) as we have in the past."
Although such a reduction might in fact enhance graduate instruction in the short run by alleviating the pressure on space, facilities and faculty, Dr. Vest said the university would continue its efforts to achieve a change in the current government position on tuition for RAs and TAs.
"But we must move forward under the assumption that the guidelines promulgated by the federal government will stand," he said.
Among the concrete actions the administration believes should be taken, Dr. Vest said, are these:
- ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½Continue a two percent overall reduction in the academic budget. It will not be applied uniformly across units, he said, but in ways arrived at after discussions with the provost, deans and department heads. Such discussions will be faculty driven.
- Follow the recommendation of the Widnall subcommittee of the Academic Council to reduce the size of the faculty over a decade by about five percent. This can largely be accomplished by the loss of "TBAs" (to be announced), that is, the loss of approved slots not yet filled.
- Apply the indirect cost rate to virtually all funds in the Institute. A small group of staff members is studying the issue and will soon place a recommendation before the administration.
- ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½Analyze quickly the possibility of consolidating the administrative functions in the smaller schools and units of MIT-Architecture and Planning, Humanities and Social Science, Whitaker College and the Sloan School. Dr. Vest emphasized "that we are not saying we want to dictate reorientation of the academic and intellectual organizations, but to look at the administrative and service functions of the units to find out if there are ways of sharing and increasing the efficiency of delivery of service."
- ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½Consider reducing the unrestricted funds used for student aid. While this works against a commitment to maintain need-blind admissions, Dr. Vest said it must be considered. He referred to a committee headed by Graduate School Dean Frank E. Perkins which several years ago "gave us a goal that the unrestricted funds used for student aid should not exceed 15 percent of the tuition revenue." MIT is now significantly beyond that and is closer to 20 percent. "It is a warning sign that there is an imbalance there that we are having great difficulty dealing with." Dr. Vest said there are hopes of attracting additional gift funds for the quality of student life, and that would include financial aid.
- Consider reducing the number of academic visitors to the campus.
Among items being considered on the administrative side, the president said, is a parking fee. "We are about the only university in the country that provides free parking and it is a substantial drain on operating funds."
Dr. Vest said that there is a need to restructure a variety of support and administrative functions and systems and reduce over time the number of employees required to operate them.
Under review, he added, are the health-care benefit and the various ways it is available on campus; the medical fees charged members of the community who are not members of the MIT health-care plan; MIT's printing and publishing costs; charging the cost of administering the pension plan to the plan itself and not subsidizing it from the general budget; outsourcing various activities and services; and fund-raising activities.
Dr. Vest said he expected that there would be "some attenuating of salary growth over the next three years."
In the months ahead, Dr. Vest said, the Provost and the Senior Vice President will work with the President to involve the entire community in improving our effectiveness and cutting costs.
"Structuring more efficient systems and services, in my view, if undertaken with the appropriate attitude, can be really an exciting opportunity for us to provide leadership not only within MIT but for the nation's research universities. As you know from your colleagues at other schools, there is not an institution, public or private in the US, that is not grappling with these very issues. To the extent that we can lead the way, as we do in so many areas, I think that it can be an exciting time for us."
A version of this article appeared in the October 27, 1993 issue of MIT Tech Talk (Volume 38, Number 11).