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A Brownian Cost Commotion
Brown now has 36% more students than Dartmouth (8,619 vs. 6,342), but in many ways it is similar to the College. Both schools have far more undergrads than grad students, and Brown and Dartmouth do a similar amount of sponsored research: $162,286,000 at Brown; $181,517,000 at Dartmouth. Neither institution has a law school; both have relatively small medical schools.
However, Brown has the misfortune of being in a city where doing business can be costly. Providence has a much higher crime rate than rural New Hampshire, and therefore Brown has 80 campus police on staff, a portion of whom are trained officers of the law carrying guns and with arrest powers; all these employees are better paid than Dartmouth’s 35 Campus Po security guards. Rhode Island has a 7% sales tax; there is none in New Hampshire. And Rhode Island has a 7% state income tax; New Hampshire has none. Real estate is more costly in Providence, as are services and labor.
□ $1,136,000,000. Good guess. With 36% more students, you might think that Brown costs 36% more to run than Dartmouth.
□ $1,236,000,000. A prudent guess, too. You’ve taken the 36% figure, and you’ve added a big-city cost premium because of Brown’s location in Providence.
□ $1,064,000,000. Clever, as well. You’ve assumed that there are economies of scale in running a school, so even though Brown has 36% more students, it only needs one President, one Provost, one Dean of the Faculty, etc., just like the College, so it is less costly to operate than Dartmouth on a per-student basis.
Fooled ya! You are wrong on all three counts, for you haven’t taken account of the elephant in the room: the bloated, overpaid Dartmouth staff. Despite Dartmouth’s smaller size, the College has 2,995 full-time and 333 partime non-faculty staff members on its payroll; Brown only has 2,574 fulltime and 653 partime non-faculty employees. And if the SEIU wage scale is typical of overall employee compensation, Dartmouth’s staff is much better paid than Brown’s, and its members have more costly benefits, even though taxes and the cost of living are much lower in New Hampshire.
So what’s the answer to the question? As a result of the College’s huge staff payroll, the cost of running Brown each year is, wait for it, not higher than running Dartmouth; in fact, it is lower by $105,491,000. Brown only costs $729,782,000 to run each year, vs. $835,273,000 for the College:
You’ll need to add depreciation to total expenses at Brown to get the sum cost of the institution in 2013: $729,782,000. In its financials, Dartmouth includes depreciation in its total expense figure of $835,273,000:
How the heck does Dartmouth cost $105,491,000 more to run than Brown? It is obvious that the College should cost substantially less, don’t you think? In fact, almost all of the difference comes from the total cost of wages and benefits, which at the College is $475,574,000 and at Brown is $388,859,000 — a difference of $86,715,000.
If you feel outrage at this figure, welcome to the club. You don’t have to be a management consultant to understand that expenses at Dartmouth are still wildly out of control. The cost of running the College should probably be $105,491,000 less than running Brown, not more. By my lights, Dartmouth’s total budget is at the very least over $200 million higher than it should be.
Addendum: There is no reason to think that Brown is a well run institution. Its managers are undoubtedly motivated by the same Rawlsian ideologies that have led to Dartmouth’s near insolvency. But if Brown can be somewhat efficient, then Dartmouth can be, too. After the College reaches Brown’s level of cost management, then we can talk about how lean it really could be.
October 18, 2009
When Love Beckoned in 52nd Street
We were at San Francisco’s BIX last evening, enjoying prosecco, cheese, and a bit of music. A full year of inhabitation in Northern California has unraveled to me no decent venue for proper lounging, but…
October 9, 2009
D Afraid of a Little Competish
So our colleague and Dartblog writer Joe Asch informed me that the D has rejected our cunning advertising campaign. Uh-oh. The Dartmouth is widely known as a breeding ground for instant New York Times successes,…
September 4, 2009
How Regents Should Reign
As Dartmouth alumni proceed through the legal hoops necessary to defuse a Board-packing plan—which put in unhappy desuetude an historic 1891 Agreement between alumni and the College guaranteeing a half-democratically-elected Board of Trustees—it strikes one…
August 29, 2009
Election Reform Study Committee
If you are an alum of the College on the Hill, you may have received a number of e-mails of late beseeching your input for a new arm of the College’s Alumni Control Apparatus called…
August 23, 2009
Fare Thee Well, Tom Crady
And now Dean Tom Crady has precipitously announced his departure from the College after only 20 months on the job. How to read this? By way of background, prior to coming to Dartmouth, Crady had…
May 31, 2009
Kangaroo Court, Indeed
In an interview with The Dartmouth, alumni-elected trustee T.J. Rodgers ‘70 explained his reasons for declining to participate in future evaluations of trustees up for “re-election,” namely the “kangaroo court” nature of such discussion in…