St. Thomas University released the 2023-24 budget development report, which forecasts an operating budget deficit of $420,000 before using inter-fund transfers to cover the shortfall. In comparison, last year’s report revealed a $500,000 deficit.
Related: STU budget development report reveals almost $500,000 operating deficit for 2021-22
The report also shows an increment of the provincial operating grant from $14.9 million to $15.1 million, which is a 1.3 per cent increase.
James Culligan, STU’s vice president of finance and administration, said this is not enough to combat inflation and post-secondary challenges after the pandemic.
“Over the last number of years, we’ve received 5.5 per cent growth from the government and inflation expenses for ourselves have been 11 per cent. So there’s still a gap of 5.5 per cent there so they’re not covering,” he said.
The operating grant represents 46.8 per cent of STU’s revenue, and tuition and student fees represent 47.7 per cent. Culligan said the university has been looking to increase enrolment to get more revenue.
Still, the report outlines a series of issues with recruitment, such as the average size of a graduating class in New Brunswick declining and a decrease in liberal arts students.
Culligan said STU is focusing on returning to high school classrooms to better recruitment efforts.
“A lot of research is being done, where are we spending our dollars and where are we getting the best bang for our buck,” he said.
“We are seeing that applications are higher, but applications can [only] be applications until the student arrives in September.”
The report pointed out that STU has the lowest administrative costs as a percentage of the overall expenses in Atlantic Canada, which Culligan said is one of the ways the university is trying to combat the deficit.
Full-time academic wages and benefits are 46 per cent of fixed expenses. Salaries for full-time professors go up every year as per the Full-time Collective Agreement through the Faculty Association of the University of St. Thomas (FAUST), hence longer periods of service correspond with better pay.
“The most significant cost savings occur when replacement of the retiring faculty member is not necessary,” reads the report.
Culligan said FAUST’s Voluntary Retirement Incentive ceased already, but faculty members can retire through the university’s standard retirement process, which would alleviate some of the expenses.
“In cases where there is replacement of a retiring faculty member, there are some cost savings due to a new faculty member normally entering at a lower salary compared to the retiring faculty member,” read the report.
STU has transferred money from its restricted funds to help cover the deficit, but the report calls this usage “unsustainable.” These restricted funds are intended for investments and represent about $20 million, according to Culligan.
He said the university has not overused the funds, but going above a certain threshold would have severe consequences.
Culligan said STU can’t use more than what donors have established from the restricted funds, as investments would decrease.
Still, he said he is looking forward to talking to the new president, Nauman Farooqi, about future plans.
“I want to [understand] where he is at, what his vision is first before I inject my vision or my thoughts,” he said.