Word: knowleses
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It remains to be seen how the Faculty will deal with the structural deficit, which will require a long-term fix, Knowles said.
A deficit can occur when a temporary cost—such as a new construction initiative—pushes expenditures above current income. Reserve funds can cover that gap. But, as Knowles wrote, "a structural deficit where we have incurred permanently-committed expenses (e.g., for the salaries of faculty) that...
"[J]ust as when any of us buys a new house and our mortgage payments seem high in the early years, the cost of the Faculty’s current capital investments will necessarily constrain our choices for some time," Knowles wrote.
Yesterday, Knowles pledged to pursue that plan. And he added that Fiscal Year 2006, which ended on June 30, actually produced rosier results than the Resources Committee predicted.
But that black ink might be a red herring—the surplus appears to stem from stalled initiatives rather than the Faculty’s fiscal fortunes. "[S]everal major projects were delayed or deferred and a number of new faculty recruitments were not completed," Knowles wrote.