University of Alberta students may want to start squeezing every penny this year, as the administration is considering various possibilities to negate a $59-million shortfall in next year's budget.
On the table are possible increases in service fees, and increased instances of differential tuition across faculties, explained U of A provost and vice-president academic Carl Amrhein, in a two-hour presentation and question period at a packed Students' Council meeting Tue., Oct. 13.
The administration has proposed splitting the burden evenly between staff, students and administrative costs at $20 million each. That figure demands an extra $540 per student.
"Right now, nobody's relaxing," Amrhein said. "What we are looking at is a two-year period with dramatically depressed government revenue."
Natural gas prices have declined significantly, hurting the provincial government's revenue stream, he said.
The U of A had anticipated a drop from a six per cent to a three per cent increase in their provincial grant allocation, 67 per cent of the 2010/11 operating budget.
As the provincial budget began to materialize, however, the U of A was notified that the amount would remain stagnant, meaning a loss of an additional $15 million in expected funding, Amrhein explained.
This, coupled with dismal interest income on other accounts and a reduction in expected tuition totals, added to the deficit.
"This is a shared burden," Amrhein said. "Nobody's excited about paying more or earning less."
Tuition is scheduled to increase by 1.5 per cent this year as legislated with calculations based on the Alberta consumer price index, but the university had originally budgeted for a 3.2 per cent boost.
"We've got a lot of different things we've got to balance in terms of meeting the funding gap," said vice-president finance and administration Phyllis Clark.
Every U of A department was already asked to cut two per cent from their 2009/10 budgets.
"We've already built that reduction plus the allocation of expenditures into the 2010/11 budget," she said.
Clark explained many administrative efficiencies will likely be implemented for 2010/11 savings, including consolidated email and payroll systems, "smart forms" for quicker payroll entry and joint purchasing efforts with other institutions within Campus Alberta.
"We can be more efficient and it doesn't reduce the quality of life for students. In fact, it increases it," she said.
Increased user fees for services such as wireless Internet, or differential tuition are possible avenues to achieve an income boost from the student side.
"Each of the faculties has an internationally defined market from which they recruit professors. If you look at the average salaries for a professor of finance or accounting versus the average salary for a professor of English literature, you'll see there's a very large multiplier," Amrhein noted.
Differential course fees were introduced for some faculties in 2003. Currently, students in medicine, law, dentistry, nursing and the MBA program pay more for their educations than other students.
Those discrepancies may become more pronounced and spread to other departments as the U of A tries to balance its bottom line.
"If we don't have the professional programs affecting the true underlying cost of staffing those programs, then the entire university subsidizes the differentially high costs of the professional faculties," Amrhein said.
Despite other aspects of the consolidated budget being more long term, such as money committed to capital projects like new buildings, no funds can be temporarily diverted.
"There is no way we can move money from the capital budget into the [operating] budget. We must use the capital money for the exact purpose the government intended," Amrhein said. "If we did we'd simply lose the buildings; it wouldn't help the budget."
The administration is trying to avoid cutting positions to save money on the staff side of the ledger.
"If we get to a staff reduction phase, we will do it in a very balanced fashion," Amrhein said. "It's a people business; everything we do requires people.
"We don't think we have a bunch of extra professors that we don't need," he added.
But even while facing staff cuts and boosted fees, the university is also unable to go into debt.
The Post-Secondary Learning Act prevents the submission of "a budget in which consolidated operating expense exceeds consolidated operating revenue unless the board has the approval of the [Advanced Education and Technology] Minister to do so."
Asking for the minister's approval for debt isn't a responsible action either, Clark said.
"Because accounts are restricted on the capital and research side, then we're borrowing money to pay for day-to-day bills, a very short-term strategy," she said. "It's kind of like borrowing to cover your grocery needs. At a certain point, you just can't keep doing it."
The administration wants to avoid actions that would hurt the U of A's competitiveness or quality, such as shortened library hours or crippled student services.
U of A SU President Kory Mathewson supported this sentiment.
"We're getting as much information as possible," he said. "We know the gap is substantial. We just hope that an accessible, affordable education isn't at risk here."
The administrators noted their intention to include the SU in each step of the ongoing budget decisions.