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New Budget Model to Require Charter Change

One of the big changes to the University's budget in coming years will be the implementation of a new budget model. The new model will be a significant deviation from current practice in that all undergraduate tuition will be pooled centrally and then disbursed to the colleges by the Provost. Currently, most of the colleges at Cornell "own" their own tuition:

Perhaps the biggest change the task force calls for is to pool all undergraduate tuition -- Cornell's largest revenue stream, which provides about 35 percent of the Ithaca campus's revenue -- which would then be redistributed by the provost, based on several considerations and data such as university priorities, college of enrollment and college of instruction, Streeter said.

This will be useful because it will mean that the University will be able to divert some of the funds going into the Hotel School into the Schwartz Center. Right now, the only way that the Hotel School is supporting the Scwartz Center is either by a) paying the tuition credits for any Hotel Student enrolled in a Schwartz Center class, or b) any Hotel School professors or staff who pay to see Schwartz Center productions.

The catch is that the contract colleges currently have language written into the University's charter explicitly targeting their tuition to their own expenses. For instance, here is the language for the Ag School:

The tuition fees charged to students shall be regulated by Cornell university after prior consultation with the state university trustees and all other fees and charges in said college of agriculture and life sciences shall be fixed by Cornell university, and the moneys received from these sources and from the sales of products shall be credited to a separate fund and shall be used for the current expenses of the said college of agriculture and life sciences.

It will be interesting to see if re-opening the University charter will draw any political attention in Albany.

Late Update: The Sun follows up today with an article detailing one of the Q&A sessions held about the budget model:

The discussion began with a bang. As soon as Fuchs, Streeter and Cathy Dove, the co-chair of the task force report, opened the floor to questions, Prof.Robert Smith, labor economics and associate dean of academic affairs, shot up.

He said that the proposal would create a “Soviet central planning agency…with homogenization across the University” in a “zero-sum game.”

Smith’s fear is that the proposal would turn over too much power to the Provost, giving him unprecedented control over how much money each college receives in return from the Provost’s office.

In a later interview, Smith expressed concern about how the proposal would change the incentives of some of the colleges. “If [we] have to adapt to a formula that’s imposed on us, I’m worried that it will change [our] behavior,” Smith said.

Some of the meeting’s attendees snickered audibly at the Soviet remark, but it quickly became clear that Smith was by no means alone in his reservations about the task force’s suggestions.

He was soon supported by fellow ILR faculty-member Prof. John Bishop, human resources. He said that his “great worry” is that the proposal will “greatly increase power at the center,” adding that Cornell’s diverse, “decentralized” colleges are “what has made the institution great.”

Of course, it's entirely possibly that the amount of duplicity and decentralization across the colleges has also kept the institution from becoming even greater.

Final Update: Paul Streeter writes in with the following:

Please be assured that if it is decided to pursue implementing the budget model as has been proposed we will be working with state officials to make sure we implement in a manner that is consistent and supportive of our stewardship responsibilities for use of state funds.

Matthew Nagowski | Posted on February 07, 2010 (#)

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