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Let the Cost-Cutting Begin

Daniels Purdue.jpgThe Wall Street Journal has reported on the cost-cutting efforts of President Mitch Daniels at Purdue University. In the coming year, tuition will be flat, and the cost of dining will drop by 10%. Daniels describes the problem:

… the former two-term Republican governor of Indiana is drawing a line in the sand against which U.S. higher education can be measured. And by freezing tuition, he is forcing his own school to modernize its 19th-century business model with a combination of systemic cuts, organizational realignments and cash incentives.

“This place was not built to be efficient,” Mr. Daniels said when asked about the structural changes he was making at Purdue. But “you’re not going to find many places where you just take a cleaver and hack off a big piece of fat. Just like a cow, it’s marbled through the whole enterprise.”

… At Purdue, there are now 75% more administrators and staff on the payroll than there were 13 years ago.

J. Paul Robinson, a former president of the faculty senate, said Mr. Daniels’s worth as a leader will be tied to his ability to prune that administrative bloat. “Let me put it this way,” Mr. Robinson said: “A blind man on a galloping horse at midnight with sunglasses on can see the problem. The question is, What can he do about it?”

Purdue is not the only school to begin trimming unnecessary expenses from its budget. The attached memo from the President of Mills College details the cuts being made there.

Will Dartmouth join other institutions in leading in this area? Although Phil Hanlon had announced that tuition would rise no more quickly than inflation, his first budget had costs for students and their families rising at twice the rate of inflation, even though the increase itself was the lowest in many years. That’s a timid step. As we have noted in the past, Dartmouth could reduce total expenses by $200 million each year (about 25%), and our cost of operations per student would still be higher than the cost per student at Brown.

Addendum: President Daniels’ phrase that excessive spending is “marbled through the whole enterprise” recalls the thrust of my column in The D dated February 10, 2009:

… if you examine the evolution of Dartmouth’s personnel directory from 1997 to 2007, you will find that every administrative office has increased its headcount dramatically. In 1997, the President’s Office numbered 6.5 full-time employees; 10 years later there were 10.

During that time period, the Dean of the Faculty Office went from 14 to 28 full-time employees. The Dean of the College Office went from 16 to 26; the Provost’s Office went from 6.5 to 11.5; and the combined headcount of the First-Year Office, the Office of Student Life and the Office of Residential Life went from 26.5 to 47.

Poor managment is a disease that invades an entire body.

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