Wesleyan’s operating budget in the last fiscal year included a total of $206 million in expenditures, with $210 million in revenue. Most of the university’s revenue (68 percent) comes from student charges, while the endowment, private gifts and government grants account for most of the rest. The operating budget lies behind everything Wesleyan does, and we’ve asked Nate Peters, vice president for finance and administration, to explain some of its highlights:
Q: What is Wesleyan’s projected total operating expenditure in the current fiscal year, and what has been our annual rate of increase? What are the primary drivers of that increase?
A: Total expenditures are projected at $214 million. Our cost trends are in the +4 percent range. Compensation (salaries and benefits) is the biggest driver – whether for existing faculty and staff or for new hires. Higher education is a labor-intensive enterprise. We are watching our medical benefits as they have dramatically trended upwards during the past several years. We are also making some investments in additional faculty, financial aid and major maintenance as outlined in Wesleyan’s strategic plan Beyond 2020.
Q: Are we more dependent upon tuition revenue than many of our peers? Why? What are the implications of this?
A: Yes, we are more dependent than many of our peers on student charges (tuition, room and board) revenue. Over two-thirds of Wesleyan’s revenue comes from this source. This is why enrollment is so important to our finances. Schools with larger endowments will rely less on student charges. For example, Williams relies on its endowment for about 50 percent of its revenue and only 35 percent on student charges.