Speaking on the “State of the School,” Nye said the school is “doing well” with plans for cutting a fiscal year 2002 loss of $5.9 million to $2.9 million for this fiscal year.
But because only first quarter financial results are in, Nye acknowledged that he could not be sure the school would meet the goals.
In a similar address at the ARCO Forum last November, Nye told KSG students and faculty that the school would run a $3 million deficit for fiscal 2002, but that number ballooned to $5.6 million in April and $5.9 million when the fiscal year closed in June.
Plans last spring had called for a $2.5 million deficit this year, but the figure was increased after the final 2002 deficit was higher than expected, Executive Dean J. Bonnie Newman said after the speech.
The school still plans to be in the black by next fiscal year, Nye said.
The deficits—the highest of any school at Harvard—resulted from years of expansions of KSG faculty and programs made possible by a strong economy in the 1990s and large increases in payouts from Harvard’s endowment.
Following the recession and economic downturn from Sept. 11—which cost the school millions in cancellations for its executive education programs—the school could no longer finance large overhead costs of several of its centers and research projects. It cut 47 staff and adjunct faculty positions, and Nye now meets quarterly with the Harvard Corporation to review financial plans.
Despite his optimism, Nye said he worried that a war in Iraq could diminish executive program enrollment. Newman said she was working on contingency plans to make substitutions for executive programs—like those for foreign officials—that might be particularly impacted by a war.
She said tightened visa requirements have already slightly impacted executive enrollment.
Initial revenue from both degree programs and alumni donations—generally limited because KSG graduates often go into public service—has been higher than expected during the first quarter of this fiscal year.
But the school has still been unable to sublet some Cambridge offices vacated as a cost-cutting measure last year, while subletting Washington offices took longer than Newman expected. If the school cannot dispose of those properties, it could lose $1.9 million per year.
In response to a question from a student worried about cuts in financial aid, Nye said he had asked the University for help to ensure the school could maintain current levels of aid but was unsure whether it would come through.
“If you’re running a non-profit, you can’t run it into the ground,” he said. “What we’re going to have to do is hold the line on financial aid.”
He said the school spends 10 percent of its budget on aid and subsidizes tuition for half the student body by 50 percent and for the entire student body by at least 20 percent.
The aid budget was flat this year, and Nye said he could not rule out cuts for next year but thought they were unlikely.
Before addressing the budget deficit, Nye touted improvements in the diversity of the student body and said that for the first time in school history more than half of incoming students were women. Racial diversity increased as well, he said.
But these figures were challenged by students who said that faculty diversity remained low.
Nye said that when he became dean in 1995, the school had only one tenured female professor and that although it now has five, any major changes would come slowly.
“When you have a large stock, changes on the margin take a long time to show changes in the average,” he said.
“We only have two years here, so ‘on the margin’ doesn’t really do much for us,” countered Allen Smith, a second-year student in the master of public policy program.
Smith added that Nye had focused on “quantitative” aspects of diversity rather than the “qualitative.”
“In the classrooms, a lot of times our voices are silenced, or you feel like you represent that one black man, or one Latino, who’s in the classroom,” Smith said.
Nye said he encouraged students to “exercise leadership” by organizing discussions on controversial or uncomfortable issues. He said the school had held faculty seminars on classroom diversity but added that he could not force faculty to attend those or student-run meetings.
Nye and one KSG student, Esther Hernández-Medina, had a heated discussion on whether the school had responded sufficiently to sexual harassment.
Hernández-Medina said several women had been victimized this year and had not received support from the school.
“In one of the cases with sexual harassment, the victim has been going around to different people in the administration without having a specific answer,” she said.
She added that few students actually read the school’s sexual harassment policy.
“If people don’t feel safe and don’t know where to go, that might be an indication that there’s a problem in terms of policies and procedures,” she said.
But Nye said all students were given a copy of the harassment code and a list of ombudspeople who could investigate complaints.
“If we give people a pamphlet, and you say people don’t know about it, if we give them a pamphlet and they don’t read it, what can I do?” he responded.
But another student added that in her experience, faculty and staff did not read the policy and did not know where to direct students.
Nye that people had been kicked out of the school because of the policy in the past, and that students should contact the dean who is conducting a review of sexual harassment procedures.
Hernández-Medina said referring individual students to the dean avoided a bigger problem.
“The problem is much deeper. There’s need to be a system,” she said.
“I’m telling you there is that system,” Nye said.
—Staff writer Elisabeth S. Theodore can be reached at email@example.com.