The International Business School and the Heller School for Social Policy and Social Justice have undertaken their own budget cuts in order to help close the University's budget gap, according to Dean of IBS Bruce Magid and Heller School Dean Lisa Lynch.Lynch explained that both IBS and the Heller School operate under a system called Responsibility Center Management, in which the University sets a target of how much more revenue the school needs to take in relation to its expenses to determine how much it must contribute to the University's budget as a whole.

IBS is projected to make a direct contribution of $1.9 million to the overall University budget in fiscal year 2009, an increase of $400,000 from the previous year as was specifically requested by the University, Magid wrote.

In fiscal year 2008, the University's target under the Responsibility Center Management system for the Heller School was $1.2 million, Lynch said, which Heller exceeded by bringing in $2.6 million. "That net revenue all went to the University," she said. To help meet the University's overall projected budget deficit this year, "I committed to increase our target . to $1.8 million," she said. Lynch explained that there had been some concern among Heller faculty that "we could have used [the $600,000 difference in target revenue] for financial aid at Heller." Lynch said she responded to those concerns by stating that the Heller School has a responsibility to support the University as it is, "not independent of the University."

At a Jan. 21 budget briefing for faculty, Prof. Steven Burg (POL) expressed concern that IBS and Heller would be exempt from budget cuts and that the administration was not being transparent about the financial role of the professional schools, which he characterized as "cash cows" for the rest of the University. Burg told the the Justice last Thursday that those concerns had been "redressed" after he communicated them to senior administrators who he said are now more transparent about the professional schools' role.

"They have both made, voluntarily, very generous additional contributions to the University's bottom line in light of the severe current situation," Provost Marty Krauss said at a press conference held last week for campus media. "I think they have acted as true citizens of the University. . They are sharing in the pain."

IBS has reduced its operating budget for fiscal year 2009, put a long-term growth plan on hold and stopped new faculty and staff hiring in response to the economic crisis, Magid wrote in an e-mail to the Justice. He said IBS can't increase revenue by increasing its class size. "We do not see significant new sources of tuition revenue at the present time because we have increased our enrollments by over 10% over the last two years and, as a result, many of our classes are full," he wrote. The number of applications has remained constant after a number of years of significant growth, he added.

Also in response to the financial situation, IBS is looking to expand its options in the summer to increase its revenue, add new courses addressing the current economic climate, encourage students to look at a wider range of career options in a changing job market and reach out to alumni to support current students.

"As a school for social policy we are obviously not a 'cash cow' for the rest of the University given our students' ability to pay," Lynch wrote. She elaborated that students at Heller interested in social policy "finish their Heller degree with maybe [$40,000] or $45,000 worth of student loans and are going into jobs that are probably paying about $45,000 or $50,000; they're not in too high-paying jobs." She said, therefore, that she could not raise tuition or cut financial aid.

The Heller School has also been hit by a decrease in the value of its endowments. It currently has 33 endowments worth $456,000 that are now "underwater," which support faculty, financial aid and summer internship programs. Lynch wrote in an e-mail to the Justice that Heller is consulting "with donors to raise additional funds or modify gift agreements so that a portion of restricted gifts can be moved to current use funds." Lynch also said she halted three faculty searches and left staff positions unfilled to cut operating expenses.

Lynch hopes that Heller can raise revenue due to an increase in applications. She wrote that applications are up 18 percent since last year compared to the undergraduate school. She said this phenomenon is common in a recession because applicants believe they are not "losing some big high-paying job by going back to school right now." She added, "it's a good thing that we have these professional schools on campus that will have this capacity going in to next year and the year after to help out the University as a whole.