SGC and VP Finance discuss college financial system
At the April 26 meeting of the Ithaca College Student Governance Council (SGC), Tim Downs, vice president of finance and administration, spoke to the board about the financial health of the college.
Downs began his work at the college in August 2021, after Bill Guerrero left the college in February 2021. Guerrero’s departure came after the COVID-19 pandemic accelerated the college’s financial crisis. Lower enrollment and retention rates caused the college to rethink its financial system and place greater emphasis on income diversity as a means of preventing tuition hikes.
At the April 25 meeting, Downs presented the SGC with a five-slide presentation on the college’s financial situation. Downs said during the presentation he had hoped to give SGC members an consumable way to understand where the college stood financially.
“Issues [I get] are very common to what I get all the time,” Downs said. “Hopefully what I can do is help demystify that a bit…My job is to try to take something very complicated and make it digestible.”
Enrollment and tuition revenue
Downs began by explaining how the pandemic has affected registrations. The first full academic year of the pandemic — 2020-21 — saw the college’s freshman class drop below 1,000 students for the first time in years. Downs said that the college will continue to see the number of classes decrease and that many other colleges have seen enrollment decline due to the pandemic. By January 2022, one million fewer students were enrolled at the University of United States than before the pandemic, according to NPR.
“We know for the next two years we’re going to drop before enrollment starts to pick up,” Downs said. “But what we’re really trying to understand, as well as higher education, is what’s going on beyond. What are the behaviors of the students? What are the college education needs of families? This is where we are aiming for the next few years.
Although the class of 2025 is larger than the class of 2024, tuition revenue has continued to decline: 2018-2019 saw tuition revenue rise to $149,868,870, 2019-2020 at $142,202,961, 2020-2021 at $125,050,482 and 2021–22 to $121,942,403. Downs said the college is looking elsewhere to diversify its revenue streams.
Disposals of fossil fuels
Sophomore James Zampetti, vice president of communications, asked Downs about Ithaca College’s Green New Deal, which the SGC passed in the spring of 2021.
“One of the purposes of this bill was to request or recommend that the Ssuperior Lleadership JWe are divesting from fossil fuels,” Zampetti said. “I wonder what your goals and those of the management team are to become carbon neutral by 2030.”
Downs said his approach to fossil fuel divestment aims to be as strategic as possible.
“The goal is not to say, get rid of anyone investing in fossil fuels,” Downs said. “There are a lot of fossil fuel companies investing in renewables. This, for me, is very important when we want to divest.
College credit score
Junior Senate President Austin Ruffino asked about the college’s credit rating. Downs said Moody’s – a financial services company and credit rating agency – gave the college an A2 credit rating. Downs said he would call an appraiser from Moody’s during the week to discuss credit ratings.
“We’re in really good shape,” Downs said. “I’ll tell you – I’m going to be careful over the next few years because as our operating budget shrinks, we’re going to look at our metrics to make sure [that if] we go into debt, does borrowing hurt us?
However, the accuracy of Moody’s credit ratings is questionable. In 2017, Moody’s paid a fine of 864 million dollars to the United States Department of Justice for knowingly granting high credit ratings to risky securities prior to the 2008 financial crisis. Lows too mentioned the college is a Moody’s loan service customer. This could be a conflict of interest for Moody’s and a problem for the college because it buys both credit ratings and loans from the same company.
Prioritization of Majors
Freshman Noah Richardson, a legal studies major and senator in the Class of 2025, asked Downs how the various majors would be affected by the upcoming financial changes. Richardson said students in majors with lower enrollment rates worry that their major will be more financially impacted than majors with more students.
“I have a lot of friends who aren’t in what they would call popular majors at this college,” Richardson said. “The perception among students — especially with freshmen — is that there’s a bit of a bias and that physical therapy and communication majors and basically everything in Park. Whatever Ithaca is known for [becomes] the college goose that lays the golden eggs.
Downs said that regardless of actual biases, student perception needs to be addressed.
“I appreciate that because whether it’s right or wrong, it doesn’t matter, it’s the perception,” Downs said. “We can either help correct this perception or if there is a bias [in favor of larger majors] we can help make sure it’s sanitized… That being said, what I will say is that the programs that are growing are going to get the resources. It’s just the reality…we need to be invested in these areas that are growing.