Hidden annual $15 million deficit raises questions about Tulane’s financial decision-making

The fact that the Tulane community, much less the Tulane University Senate itself, had little-to-no knowledge of Tulane’s ongoing annual operational deficit of $15 million prior to January is outrageous.

Fitts first released news of the budget deficit Jan. 13 in a message on Tulane’s website when the university decided to hire the Huron Education consulting firm. Fitts said, however, during the meeting that he was aware of the deficit before Tulane hired Huron, and most of the Senate did not know about it until the meeting on Feb. 2.

Tulane prepares and releases a balanced budget every fiscal year, a budget to which departments often do not adhere. This failure to stick to the budget is what led Tulane to hire Huron. 

According to minutes from the Feb. 2 University Senate meeting, Tulane has “been running a $15 million [operating budget] deficit in recent years.” The operating budget, however, is separate from the capital budget, which includes expenses like Yulman Stadium.

To be clear, the stadium has incurred a debt of $35 million of its own, separate from the annual $15 million operating deficit. This fact is disturbing because the university announced in 2011 that it had raised $40 million in pledges for the $60 million stadium and was attempting to have it funded entirely by private funds.

Outside of the stadium costs, the news of an operating budget deficit came as a surprise to many of the meeting’s attendees. Senator Graham Owen said it was apparent that the deficit was unknown to many in the room, which suggests that former President Scott Cowen purposefully kept the accumulating deficit from the Tulane community. The minutes state that Professor Michelle White, who attended the Senate meeting, “was struck that it seemed to appear out of nowhere.” 

Many students do not understand the differences between the budgets or what their tuition fees fund. To effectively plan its financial future, Tulane must involve the entire community, clear the confusion and dedicate itself to operating efficiently — but more importantly, transparently.