Whereas the tuition percentage raise of 5.95 percent garners attention from undergraduate students, a different budget figure peaked faculty and staff’s interest at Tuesday’s Faculty Senate meeting. Namely, Saint Louis University’s merit increase pool-salary increases-is set at 2 percent for fiscal year 2003.

The average increase for the past seven fiscal years has been 3.4 percent, with the highest percent increase being 4 percent in FY98 and FY99.

The decrease to 2 percent was caused by an effort to keep tuition-the primary fund for salaries-as low as possible for next year.

In an e-mail sent to faculty and staff, Vice President for Human Resources Kathy Hagedorn stated, “A larger pool would translate directly into higher tuition, and we did not feel it appropriate to raise tuition more than the recently announced 5.95 percent.”

Each employee’s merit increase is based on that individual’s performance, relative to the standards of his or her department. Not necessarily every employee receives a 2 percent increase; that figure is an average, Hagedorn said.

Vice President for Business and Finance Rob Altholz acknowledged that, because of inflation, some employees’ paychecks may actually be worth less after the new fiscal year begins in July. “That’s painful to say, but it’s true,” he said. “We’re just going to keep pace with inflation.”

The University will also offer an additional $50,000 equity adjustment pool, designed to assist the lowest paid employees.

Another significant change involved the University’s Retirement Plan. Effective Jan. 1, 2003, SLU will adopt a Safe Harbor Plan Design in which the SLU contribution will increase for employees contributing two, three or five percent into the plan. Employee contributions of zero percent will no longer be matched by the current SLU contribution of two percent.

Employee contributions of 5 percent or greater will be matched by a SLU contribution of 8.5 percent.

The numbers were revealed during Altholz’s presentation of the hard-dollar educational and related budget, which totals $221 million, or approximately half of the total operation budget. He cited a number of “uncertain, confusing and unfavorable” environmental factors that played heavily into finalizing the budget, including:

 a national recession

 uncertainty of high school students’ college consideration behaviors

 financial aid pressures exerted by other colleges and universities

 a low interest rate environment that reduces earnings on operating cash balances

 the effect of the stock market’s severe decline on families’ college savings

 the reduction in spending caused by the stock market’s severe decline

“[These] serve as the groundwork for the decision process we went through,” Altholz said.

Also significant was the fact that health care costs are rising by as much as 15 percent annually. And, though exact numbers will not be known until May, insurance

costs-including property insurance, liability insurance and worker’s compensation-are expected to skyrocket, possibly by as much as 75 percent or more.

One faculty member commented that the 2 percent merit increase was, in fact, not a raise at all and asked how the University expected to maintain quality faculty without offering more substantial salary increases. Johnson replied that although the increase is less, the University does not have to lay off employees in order to cut expenses. Also, with the University paying greater matching contributions, “you get more than 2 percent,”

Johnson said. Also, SLU still offers a zero-cost health insurance plan to its employees.

During the Question and Answer period, Philosophy professor John Kavanaugh, S.J. asked, “What’s going to change next year that will make [the budget numbers] different?”

Johnson replied that an increase in the number of incoming freshmen-and, therefore, tuition dollars-would help. “We have enough faculty for 1,400 freshmen. We have enough res hall space and enough classroom space for that same number. [If we reach 1,400], then we’re talking about a different pool of money,” Johnson said. She added that paying close attention to where the University could save money by reallocating resources is also key, as well as possibly capitalizing on “auxiliary enterprises,” such as the new Water Tower Inn, SLU’s hotel located in the Salus Center.

Johnson added that more external funding for research will be sought, rather than spending tuition dollars to support research. “A major university does not do that,” she said. “It’s not fair to undergraduates.”