Amott: College to cut retirement benefits

President Teresa Amott unveiled plans Wednesday to cut retirement benefits for all faculty and staff through June 2014.

The decision was one of several stopgaps Knox officials outlined at an open forum on handling the college’s financial woes, which largely stem from overspending the endowment and the 2008 economic downturn.

Treasurer Tom Axtell said that temporarily cutting the retirement funds — a contribution that averaged about 6 percent of an employee’s salary — will save approximately $150,000 this year and $500,000 in total.

“As a labor economist, this isn’t something I take lightly. But we have to find additional cost savings. That’s the reality of it,” Amott said.

Knox began the year with a $3.6 million deficit, on the condition that the budget be balanced by the end of the fiscal year.

The Board of Trustees approved a $1.7 million draw from the endowment — the equivalent of Knox’s savings account — while school officials managed $750,000 worth of cuts.

Still, that leaves nearly $1.2 million in budget cuts before June 30.

Salary freezes, unpaid furlough days and staff cuts are all being considered, Amott said.

“We didn’t think it would be possible to cut [$3.6] million without doing real harm to our students and with our bonds to the community,” Amott said. “We can’t raise tuition more than we already have, and we’re not willing to cut financial aid, so we have to find expense reductions the best we can.”

Library Director Jeff Douglas asked about an email Amott sent members of the Knox community on Monday that posed the possibility of further staff reductions.

“I need to know if there’s a chance that the two positions we’ve lost [at the library] might come back to us. If so, we’ll do one thing. And if not, we’ll do something else,” he said.

Amott acknowledged his concerns, but said she did not yet know: school officials will not meet with the Board again until February, and they are still grappling with a surprisingly high number of fall dropouts.

“I just hope that as we talk in the future about the compromising the student experience, well, let’s just recognize that it’s already started,” Douglas said.

Amott and Axtell presented a 10-year plan they say would give Knox a $5.5 million surplus. It relies on increasing the enrollment by 60 students each year through 2016 and raising the endowment $10 million each of the following six years.

“There’s a short-term period we have in which to endure some pain. But if we make investments now, we will start to see revenue growth three to four years from now,” Amott said.

Some faculty members expressed skepticism toward the model, which showed continued financial decline the next two years before beginning a turn around.

“There’s something driving the projections forward here, but I’m unsure what it is,” Assistant Professor of Political Science Daniel Beers said.

Amott cited a healing economy, slight tuition increases and a jump in enrollment. Among her plans to achieve that goal: full-tuition scholarships, a revamped website and hiring an internship coordinator.

And by Amott’s calculations, the athletic department could also accommodate at least 100 more student-athletes, who she said statistically are less likely to leave Knox.

“Knox College, for over 175 years, has been chronically poor, under-endowed, resource-deprived — whatever term you want to use,” Dean of the College Larry Breitborde said. “But I think this is a model that provides a path out.”

In October, Amott mentioned interest in purchasing St. Mary’s Square Living Center, 239 S. Cherry St., which could provide as many as 250 additional beds. She said negotiations were still in the “early stages.”

But on Wednesday, the message from Knox officials was clear: increasing enrollment — perhaps to more than 1,600 students — is key.

“There’s no other way for a tuition-dependent institution to solve this kind of problem. It works, and it’s our only hope,” Amott said.

Matt McKinney
Matt McKinney is a senior majoring in creative writing and minoring in journalism. His experience with journalism ranges from a year as co-sports editor for TKS to an internship with the Chicago Sun-Times, where he used his Spanish language skills to report a front-page story on changes to federal immigration policy. He has also written for The Galesburg Register-Mail and Knox’s Office of Communications. Matt is the recipient of the 2012 Knox College Kimble Prize for Feature Journalism and two awards from the Illinois College Press Association, including a first place award for sports game coverage. He is currently interning virtually with The Tampa Bay Times and will pursue his master's next year at Northwestern University's Medill School of Journalism.

Tags:  finance finances furlough salary freeze staff cuts student body increase Teresa Amott

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Jan 24, 2013

It’s hard to justify increasing enrollment to 1,600 with current dining facilities, classrooms and dorms. This current academic year has felt especially crowded. Particularly in the caf and GDH classrooms where students often have to drag outside chairs in for upper level classes. I came to Knox for small class sizes and I haven’t had those since returning from a year abroad. Yes, budget cuts are necessary but I think we need to take a hard look at lined items in department budgets and cut all but necessary tools- and keep faculty benefits stable for the time being. Knox faculty know they are paid way under market, and chipping one more aspect of their compensation may have the dire unintended consequences of them looking for a new job.

Jan 25, 2013

I want to know more about our endowment. Specifically, how is it invested? Who manages it? What was the make up of the portfolio in 2008? And now? It seems that the Knox community largely treats it as a black box, but I’m curious what’s inside. How about some digging, TKS?
We should all know how the college is investing.

-Matt Baker, 09

    Jan 25, 2013

    That’s a great idea. We’ll be sure to look into it later this term as part of a series on college finances.

Jan 25, 2013

I have nothing encouraging to say about this. The fact that Knox is overburdened with students and understaffed with unhappy workers has been evident to me since day one. My classes average 30-40 people, the cafeteria is always overflowing to burst, the library hours are too short to give me time to work, I’ve had no proper advising on any issue including basic academics in my time here (everyone is “too busy”), I was put in “transitional housing” my first year, every staff member I’ve ever dealt with has only tried to blow me off repeatedly, etc, etc, etc. People here are consistently rude and basically act as though they’re annoyed that the students exist at all, because we’re just burdens to them. I guess I’m wondering what the point is in “saving” Knox; if it’s really been this much of a scam for 175 years, it needs to be put out if its misery. It doesn’t need to scam more clueless high schoolers out of hundreds of thousands of dollars. I’m just relieved I’m getting out of here when I am.

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