The Corporation approved a $704.8 million University budget for next year during its general business meeting Saturday, raising tuition and fees by 5 percent to bring total undergraduate costs to $45,948 next year. Faculty salaries will increase by 5 percent, and graduate student stipends will rise to $18,500.
The $120 million budget for the Division of Biology and Medicine, which was increased 14.5 percent last year, was only raised by 4.4 percent for next year. The University's general budget, which funds the College and Graduate School, will total $508 million next year - a 7 percent increase.
Brown's budget next year calls for a $9.3 million deficit, which it will make up using some of its $50 million in reserves, which were authorized by the Corporation in 2004. By next year, it will have used half of those reserves. University officials have said the need for reserves is to be expected with the heavy spending called for by the Plan for Academic Enrichment.
"It is clear that the University's aspirations will continue to require the investment of reserves and balances for the next five to seven years," read the University Resources Committee's annual report, released last week.
One of the University's largest expenditures is financial aid, on which it will spend $56.9 million next year - an 8 percent increase. Financial aid for international students will increase nearly 40 percent to $4.4 million over the next four years.
Corporation members also discussed a two-year $190 million budget that would allow the University to begin work on planned facilities projects such as a fitness center, the Walk, the Creative Arts Building and a new cognitive and linguistic sciences building, among others.
The University is also spending heavily to attract new faculty. Seventy-five searches for new faculty are currently under way. Although most will compensate for normal attrition, the number of full-time professors is expected to increase by between 15 and 25 in the next year, bringing the total near 680.
The budget includes $200,000 to replace and maintain athletic equipment and support team travel. An additional $200,000 will be given to the Office of the Dean of the College to support pilot programs related to the curriculum and advising.
The Grad School's budget is suffering from major expenditures on student support, the URC report said, though funding in that area will increase by $3.2 million next year. The Grad School's guarantee of five years of financial support has hurt the University financially not only because of its cost, but because it eliminates revenue from self-supporting students who had paid tuition out-of-pocket.
To offset additional costs, the Grad School will reduce graduate admission - perhaps by about a dozen students, the URC report said. It will also review its policies to see where money can be saved. However, the report acknowledges that the Grad School's budgetary needs will only increase, especially because the size of the school must be increased to support the addition of new faculty.
The Corporation also approved a 10 percent increase in payout from the University's $2.4 billion endowment, the interest of which will provide an estimated $85.4 million in revenue next year - a $9.8 million increase. These figures are based on the assumption that Brown will raise $50 million for the endowment next year, according to the URC report.
University investment policy states that the draw on the endowment should range from 4.5 to 5.5 percent of the endowment's average market value during the last three years. For next year, the endowment draw will be about 5.39 percent.
The budget also reflects the University's expectation that it will be reimbursed by outside sources, such as the federal government, for some of the money it spends on research. Known as indirect cost recovery, this amount is expected to decline 0.8 percent to $31 million next year.
In the past few years, the University has seen an average 10 percent growth in its indirect cost recovery, which reflected increases in lab space, faculty size and research volume. But, according to the URC report, federal funding cutbacks, particularly at the National Institutes of Health, will hurt the BioMed research funding. Though other departments are expected to receive 5 percent more in indirect cost reimbursement, BioMed is projected to see a 6 percent decrease.
The University's revenue projections have typically been fairly conservative. Despite the budgeted decrease in indirect cost recovery, grants have been up nearly 8 percent relative to last year. The University also projected the endowment would return 7.5 percent annually, though it has averaged a 14.3 percent return over the last three years.
