The Overnight Budget

By Hussain Abdul Hussain  ---

   
      The silence of the administration on student inquiries about the possibility of an increase in tuition next year is ridiculous.  Two probable scenarios stand behind this silence.  It could be either that the administration is hiding budget numbers, or that it prepares the University's annual budget overnight.
   If the administration is concealing numbers until after it presents them to the Board of Trustees, then the administration's transparency is at stake.  If the numbers, which are usually forwarded to the trustees in mid-March, were not ready by the first of March (the date of the recent student strike), then AUB certainly has a bunch of amateurs occupying the fifth floor of College Hall and running the University's financial affairs.
   Personally, I do not know much about budgeting.  Yet, what I gathered from official statements can be put as follows.  The University budget is divided in two: the capital budget and the operating budget.  
   On the one hand, the capital budget comes from gifts and stands in the form of endowments invested mostly in the US stock market.  A certain formula, which takes all economic factors into consideration (inflation, variation in stock market growth, etc.), allows AUB to use a percentage of this capital budget revenue for maintaining and expanding the AUB campus and its facilities.  
   The University has its projections for this budget and can foretell its expected revenue for at least the coming five years.  For example, in the coming future, with the slowing American economy and with the expected relative recession in the US stock market, AUB is not expected to gain revenue equal to that of the previous five years from its capital budget.
   The operating budget, on the other hand, comes mainly from investors' (student) revenues and from the revenues of hospital services.  This budget, presented annually at the Issam Fares Hall, pays for University expenditures, which include salaries and purchases.  This budget becomes suddenly visible in April and takes the issue of balancing the books of the coming fiscal year into consideration.
   The operating budget always seems to have been prepared in an overnight.  In an overnight the University announces an increase in tuition fees.  The administration seems to have no expectations for this budget, no formulas, nothing (or as we said, has them but hides them).  When students inquire about the reasons behind the annual increase in tuition the administration gives one of two answers: l) the inflation rate in the Lebanese economy, which affects the University's purchases (In the case of deflation or decrease in purchasing expenses no decrease in tuition fees is expected.) and 2) additional expenses.
   In the case of inflation, students were saying, we can swallow an equivalent increase in tuition; otherwise, the administration should cut the rhetoric.  The students were absolutely right.  At least they were pushing the administration to keep up with its "no inflation, no increase" slogan.
   What bothers students most is the second answer, that the increase is necessary to meet additional expenses.  In this case, the administration underestimates the ability of both students and faculty to comprehend budgeting principles.  When students ask the administration to cut down its additional expenses, the administration shows them a list of these expenses, something that looks like a shopping list, and asks them to scratch out whatever they think to be unnecessary.
   Heavens!  That is funny!  A budget that is prepared in an overnight with a shopping list next to it.  Doesn't the administration have any expectations about the operating budget for the coming five years?  Don't they have any graphs or projections that might justify the administration's views based on given economic factors in the region?
   Financial administrators must have set formulas for the operating budget in which they take into consideration the Lebanese inflation rates, the shrinking student market, the expected alumni contribution, the expected expansion of the academic infrastructure, and the expected losses of the hospital.  Then they can draw some projections to say to students: look, over the coming five years, we will increase tuition by x, y, and z and you will have problems a, b, and c solved and the academic infrastructure completed.
   Then the administration can say: listen, at this point we think we are operating at high standards.  There will be no further increase in tuition unless we cannot meet the pressure of inflation in a given year.
   The students might swallow justified increases in tuition provided they were assured that no other variable could help achieving what's in the best interest of the University's growth.  Yet, they are not expected to remain calm while they find themselves to be the only negotiable digit in the operating budget's balance sheet.
   The student demonstration on February 28 against tuition increase was right.  The students might have included some false arguments, which the administration tried to exploit to show the immaturity of the students' action.  Yet, it seems that the immature party was the one who was beating around the bush while never answering the main concerns about tuition increase.