Treasury to aid in NIS 2.7 billion Hebrew University bailout plan

The Hebrew University of Jerusalem is one of Israel’s oldest and most prestigious academic institutions.

Students at Hebrew University (photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)
Students at Hebrew University
The Finance Ministry and the Council for Higher Education’s Planning and Budgeting Committee, together with the Hebrew University, have formulated a NIS 2.7 billion multi-year recovery plan to bail out the educational institution.
The Hebrew University of Jerusalem is one of Israel’s oldest and most prestigious academic institutions. Established in 1918, it enrolls some 23,500 students and some 1,000 researchers across 14 schools.
“The agreement we have reached will enable the university to continue to contribute to the growth of the Israeli economy by investing in research and development and the cultivating of human capital,” Finance Minister Moshe Kahlon said on Wednesday.
Kahlon said that the main goal of the agreement was to ensure that the university would not only be a “leading and pioneering academic institution, but also an institution with financial stability and independence.”
The decade-long plan calls for the university to cover its budget deficit of some NIS 1.8b. through “self-financing sources” that are not used for academic activity, including the sale of some NIS 400 million of the institution’s assets.
Additionally, the university will balance its current budget by means of “institutional efficiency measures” in the amount of NIS 900m., which include cutting positions and salaries, increasing overhead, and streamlining the institution’s management.
In the face of these measures, the state has committed to allocating budgetary supplements beyond the existing budget amounting to NIS 700m. for a decade (NIS 70m. per year).
“The Hebrew University is a symbol and brand of the State of Israel in general and the crown of the higher education system in particular,” said committee head Prof. Yaffa Zilbershats.
She said that the committee would closely monitor the implementation of the recovery plan and ensure that the institution upholds all of the milestones.
The Hebrew University – and other institutions of higher education nationwide – face stark budgetary prospects, since their traditional pension plans guaranteed monthly stipends without requiring that workers pay into the system.
Academic pensions today are now based on professors receiving upon retirement however much they contributed to the system – a model adopted in 2000.
Each year, the Hebrew University transfers hundreds of millions of shekels to cover ballooning pension costs, albeit an amount that is not sufficient.
The university carries the largest pension burden among Israeli universities.
The university was unable to start on time during the 2016/17 academic year, due to a budget deficit and a strike that lasted two weeks. It ended after the ministry stepped in and allocated more funding. Since that time, negotiations were ongoing between the government and university administrators.
“The Hebrew University has been leading academia in Israel for the past generation. In recent years we have found ourselves in a problematic budgetary situation that has created many difficulties and jeopardized our ability to continue to lead Israeli academia,” university president Prof. Asher Cohen said.
“We have built a long-term plan that will require the institution to undertake significant processes and presents many challenges, and will enable academic research, growth and renewal,” he said.
Cohen stressed that these steps would ensure the university’s future as a leading institution in Israel and internationally.
The Hebrew University has consistently placed among the top universities in Israel, according to international rankings.
The institution was ranked 145 in the world by the QS World University Ranking in 2018, though it fell from the top 100 universities in the Shanghai Ranking and was surpassed by Tel Aviv University in the Times Higher Education Asia Rankings this year.
Education Minister and head of the Council for Higher Education Naftali Bennett said the recovery plan places numerous challenges for the university to overcome in the coming years, but said its implementation should ensure that the university will uphold its rankings among the elite educational institutions in the world.