Dear Faculty and Staff,
As we begin the planning process for the FY2027 budget, we write to share an update on Pomona College’s current financial position. This includes information about our multiyear savings and reallocation program, current budget priorities developed in collaboration with the Faculty Inflation and Budget Advisory Committee, and key planning assumptions guiding the FY2027 operating budget.
Financial Context
Like many colleges and universities, Pomona has faced financial uncertainty amid changes in federal funding and policy since early 2025. Importantly, Pomona has avoided the most concerning potential outcome—a substantial increase in the endowment tax first levied in 2017. Beginning in FY2027, the College will no longer be subject to that tax. However, threats to federal grant funding and financial aid remain, and we continue to experience pressures on the operating budget from higher inflation, tariffs, and increased benefit costs.
Working together, we have made significant preparations to proactively address these challenges. In May 2023, as we were still scaling up post-COVID and feeling the effects of the inflationary peak (9.1% in June 2022), our financial modeling showed that expenses were projected to grow significantly faster than revenues. In response, we launched a five-year, college-wide savings and reallocation program, now in year three. Its goals are to:
- Identify $5 million in recurring revenue and expense initiatives to strengthen the unrestricted core funds budget;
- Slow expense growth by asking divisions to fund new needs through the reprioritization of existing allocations whenever possible; and
- Free up unrestricted budget capacity to invest in high-priority areas, particularly within the academic program.
Although we continue to operate in a challenging planning environment, the groundwork we laid together through the multiyear savings program has positioned us to sustain our core operations and to be able to invest in priority areas.
Core Funds Budget Priorities and Ongoing Collaboration with the Faculty Inflation and Budget Advisory Committee
Each year, the College’s core funds budget is developed within available revenue constraints, while maintaining strong support for our teaching mission, need-blind admissions, and competitive salary and benefit increases for faculty and staff. When possible, we also invest in new strategic priorities.
In recent years, Pomona has raised its minimum wage to $26.50 for all benefits-eligible employees and implemented market-based adjustments for many staff roles. Our work with the new Faculty Inflation and Budget Advisory Committee has sharpened academic budget priorities, which are now incorporated into our long-term model. We are pleased to share progress in three key areas:
1. Adding Faculty Lines
Starting in 2000, enrollment growth outpaced the addition of new faculty lines. Following the resolution of the post-COVID bubble, we anticipate steady enrollment (unless, as discussed in the Access and Enrollment report, the College makes the collective decision for future expansion). However, to address the prior increase, we developed a plan to add 18 new faculty positions (net hires above separations), restoring the average student-to-faculty ratio from two decades ago. Since 2022, we have added a net total of 11 lines—eight of which occurred this fiscal year with 14 new tenured and tenure-track hires offset by six retirements. The remaining seven lines will be added over the next three years.
2. Addressing Cost-of-Living Pressures
The College’s strategy to mitigate cost-of-living challenges includes two main components:
- Large-Scale Faculty/Staff Housing Initiative: Pomona has long supported faculty through mortgage and rental assistance programs. Over the past two years, we have studied opportunities to leverage our TCC land assets to develop below-market housing for all employees. The Council of Presidents and TCC Board recently approved the next phase of planning for a large-scale faculty and staff housing initiative on the vacant golf course one mile from campus. This step will strengthen recruitment and retention while ensuring that Pomona remains a place where faculty and staff can both work and live within our community. Our work has been guided by a 2023 housing demand study and best practices from peer institutions, including UC Irvine’s successful University Hills model, whose Housing Authority CEO is advising our project.
- Salaries: increased investment in faculty and staff salaries is part of our strategic vision. As described above, we have made significant progress on staff salaries. For faculty, Pomona remains committed to a long-term, trustee-approved goal of compensating assistant, associate, and full professors at levels that keep us among the top three peer institutions. Recognizing the cost-of-living differences across peer markets, we continue to invest in housing programs to help bridge those gaps. The Faculty Inflation and Budget Advisory Committee has rightly emphasized that our compensation goals should account for cost-of-living factors beyond housing. Work is underway to integrate this consideration and—assuming a sustainable funding plan is achieved—we anticipate higher-than-usual increases to the faculty salary pool over the next three years. The Dean’s Office will share additional details with department chairs this spring.
3. Supporting Academic Affairs
The current Academic Affairs Self-Study stems from concerns expressed by department chairs—particularly in Economics and Computer Science—about administrative and instructional challenges tied to sustained student demand. The self-study working group is developing recommendations to address these issues. We will continue to work with the Dean’s Office to fund priorities identified through the Self-Study and other means.
Development of the FY2027 Budget
Funding these priorities from existing resources will involve tradeoffs, and we ask for your continued partnership in this process. Non-academic units are being asked to identify ongoing savings under the principles that there should be no impact on current staff and minimal impact on campus services. Non-personnel budgets will not receive an inflation adjustment, requiring departments to make strategic choices regarding non-discretionary expenses. We will also set new targets for utilizing available restricted fund balances and will work directly with department chairs to ensure that approaches reflect departmental needs and priorities.
This year, we are expanding stakeholder engagement in the budget process. This includes meetings with the Faculty Executive Committee, the reinstated department chair and academic coordinator kickoff breakfast, budget conferences with each vice presidential area, and ongoing community updates throughout the process.
Key aspects of the FY2027 operating budget include:
- Stable revenues, with normal year-over-year net tuition growth and an above-average endowment payout (+6%) following consecutive strong investment returns;
- Expense growth primarily driven by wages, benefits, and financial aid, contained by ongoing savings initiatives and flat non-personnel spending assumptions;
- Year 4 of the savings program, generating new unrestricted revenues and compounding savings from prior initiatives;
- New targets for the use of restricted fund balances, with plans developed in consultation with department chairs; and
- Strategic investments in priority areas: additional faculty lines, enhanced faculty salary funding, and resources reserved for implementing the academic affairs priorities identified through the Self-Study and other planning.
We close with sincere appreciation for the collective effort across our community to maintain Pomona College’s financial health and strength. While uncertainty persists, our long-standing commitment to fiscal responsibility continues to safeguard and advance the College’s educational mission for current and future Sagehens.
Yours sincerely,
G. Gabrielle Starr
President, Pomona College
Philip and Gertrude McConnell Professor
Departments of English and Neuroscience
Brent Carbajal
Interim Dean of the College
Jeff Roth
Vice President, Chief Operating Officer, and Treasurer