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Jim Kenyon: Dartmouth Must Make Do With What It’s Got

The news that Dartmouth finished the past fiscal year nearly $2 million in the hole is no cause for panic. With the college sitting on an endowment of $3.7 billion, it’s not as though it has to pawn the silver in the president’s mansion.

And as Bloomberg News reported in a story about Ivy League school finances that ran on this newpaper’s front page on Dec. 13, Dartmouth was in good company. Harvard, Yale and Cornell also finished the fiscal year that ended June 30 in the red.

“Obviously, we’d love to have revenues exceed expenses, but a ($1.8 million loss) is not a concern,” Dartmouth President Phil Hanlon, who arrived in Hanover this summer, told me in an interview Friday. “A whole bunch of predictions go into (budgeting). We never expect to hit it on the dollar.”

Still, when the balance sheet doesn’t balance, the memories of the bad old days come flooding back. The 2008 Wall Street meltdown, which saw Dartmouth’s endowment take a $700 million hit, led to several rounds of layoffs and other belt-tightening measures at one of the Upper Valley’s major economic engines. In 2009 and 2010, about 115 employees lost their jobs as the college maneuvered to close a $100 million budget gap. (By June 2010, 30 of the laid-off workers had been rehired in new positions.)

On the same day the Bloomberg News story appeared, Hanlon sent out a lengthy “message to the Dartmouth community” that did more than just wish happy holidays.

“Underlying any and all of our grand plans is a very real cost imperative,” wrote Hanlon, a mathematician by profession. “Every campus across the nation is contemplating a new and challenging future with potentially declining returns on endowments, reduced federal research funding, and real constraints on the costs that can be shouldered by students and their families.”

Talk about a holiday cheer killer.

Has Hanlon forgotten that he’s no longer at the University of Michigan? Although the feds have become more stingy with research dollars and the stock market can’t be counted on for endless double-digit returns, since when did an elite private institution such as Dartmouth start worrying about the cost of enrollment?

It’s just not the Ivy League way. I always thought Dartmouth considered its $60,000-a-year price tag a badge of honor. If parents and students weren’t paying top dollar, then something must be wrong. In higher education, the more you pay, the better the school. Or so we’re told.

But Hanlon broke ranks. “At Dartmouth, we must commit to holding down growth in cost of attendance while maintaining the high quality of everything we do,” he wrote. “We must prioritize programs of excellence and innovation, increase rigor in how we allocate resources, commit ourselves to strategic self-investment, and reach historic levels of philanthropy. It’s a tall order, but one I am confident we will meet by working together.”

What was Hanlon’s underlying message? Was he warning that Dartmouth is about to enter another do-more-with-less era as in the Jim Kim days?

During Friday’s interview, I brought up the dreaded “L” word. “I don’t anticipate any institution-wide layoffs,” said Hanlon. But he’s asked the dean of the faculty’s office and other large departments to allocate 1.5 percent of their budgets to new initiatives. The catch? The departments won’t receive additional money to fund the priorities. They have to make do with what they’ve got.

I wondered how Dartmouth’s faculty took Hanlon’s message. Last week, I emailed four faculty members who serve on the college’s “committee on priorities,” which deals with budgetary and cost issues, but didn’t hear back from anyone. I figured they must be busy, or maybe they’re not sweating what Hanlon had to say. (In the layoffs of a few years ago, the faculty was spared.)

I also stopped by Earl Sweet’s office in the basement of Dartmouth Hall. Now that Hanlon’s been on the job for six months, I asked Sweet for his impression of the new president. “I don’t have one,” he told me. “I haven’t met him.”

That’s worrisome.

Sweet, a custodian who has worked at the college for 33 years, is president of Local 560 of the Service Employees’ International Union. Local 560 represents Dartmouth’s blue-collar workers — the people who clean dorms, fix broken water pipes and flip hamburgers in the dining halls.

I used to sense that Dartmouth took pride in paying a livable wage to its rank-and-file employees. The starting pay is often $15 or so an hour. But during Kim’s tenure, the college seemed to adopt the attitude that the fewer union employees, the better. Local 560 is down to 520 members — about 60 fewer than a couple of years ago. When union workers retire or leave, “they just don’t fill the positions,” said Sweet.

As with colleges across the country, Dartmouth has discovered it can save money by replacing union workers with outside contractors who don’t have to pay their employees livable wages, said Sweet. “Kim’s job was to bust the union,” he said. “I don’t know if it’s Hanlon’s job to finish us off.”

It’s odd that at a time of growing income inequality, a leading academic institution would be contributing to the problem rather than trying to fix it.

Then again, I never thought an Ivy League college that charges $60,000-a-year could lose money, either.

Jim Kenyon can be reached at Jim.Kenyon@valley.net.