With the United States economy mired in the worst financial storm in recent memory, Ohio State’s Board of Trustees met Thursday to discuss the university’s financial outlook and strategies for navigating the choppy waters ahead.
Ohio State has not been affected by most state budget cutbacks, but the extremely volatile October stock market has battered the university’s finances.
Ohio State’s long-term investment pool, which lost 8 percent of its value in the 2008 fiscal year and 12 percent in the first quarter of fiscal year 2009, lost an additional 13 percent in October, said Ohio State Chief Investment Officer Jonathan Hook.
Abigail Miner/The Lantern
President E. Gordon Gee contemplates Ohio State’s financial situation at the Fiscal Affairs Committee meeting in the Longaberger Alumni House Thursday.
October also saw the Dow swing at least 100 points almost every day, Hook said.
“On a relative basis, we’re holding our own, but it still doesn’t feel good to see the market move like this,” he said.
Ohio State will look to build their assets through private sources that are not subject to market volatility, Hook said.
Board of Trustees chair Les Wexner proposed that the Board’s Development and Investment Committee meet more regularly than previously scheduled in light of the market’s volatility.
“We have to continue to be diligent,” Hook said.
There might be a silver lining among the turmoil. Possible decreases in interest rates and the costs of energy, labor and construction could benefit Ohio State, said Senior Vice President of Business and Finance William Shkurti. The economic downturn also affects competitors, he said.
Although it is hard to determine how other schools are weathering the storm, Hook said “it’s fair to say that many [other schools] are in much worse shape than we are.”
Enrollment can also increase during a downturn, as it has this year at Ohio State. This was not the case during the early years of the Great Depression, Shkurti said.
Shkurti researched the effects of the Great Depression on Ohio State, and presented his findings in a report to the Board of Trustees Thursday.
“I’m just using that as an example of how the university was affected by the worst crisis in recent memory,” Shkurti said.
Ohio State received federal aid in 1934, which Shkurti said is a “question mark” in the current financial crisis.
Dan McKeever can be reached at [email protected].
