More than five years after a financial crisis ravaged the U.S. economy, the Baltimore Museum of Art has finally run out of options.
Museum administrators announced Monday that after exhausting other cost-cutting measures, they have laid off 14 employees, or 9 percent of the 154-member staff. The cuts, which affected 11 full-time and three part-time employees, took effect immediately.
The job cuts are needed to make up a projected deficit of more than $500,000 by July 1, according to museum director Doreen Bolger, and to accommodate a budget that is shrinking by $1 million from its current level of $12.9 million for the 2012-2013 fiscal year.
"We did everything we could think of over the past five years to avoid reaching this point, including salary reductions, furloughs and trying to find ways to raise more money," Bolger said.
Bolger said staff cuts were necessary to avoid trimming programs that directly affect museum visitors. At the moment, there are no plans to reduce hours.
In addition, administrators are taking pains to safeguard two popular and high-profile initiatives:
Admission to the museum will continue to be free, as it has been since Oct. 1, 2006.
And the museum will continue to receive a $24.5 million face-lift, which will be finished in 2014 in time its 100th anniversary.
The BMA is hardly the only arts institution in the nation to be faced with painful staff cuts.
According to a report released Monday by the Washington-based American Alliance of Museums, 16 percent of the 347 museums nationwide surveyed in the report were forced to lay off employees in 2010; 13.4 percent issued pink slips in 2011, and 5.4 percent let staff members go last year.
Alliance spokesman Dewey Blanton said that the greatest belt-tightening occurred in 2010 and 2011.
"Even the Getty Museum in California and the Metropolitan Museum of New York, which arguably are the two richest museums in the world, were cutting staff," he said.
The Walters Art Museum laid off seven of its 150 employees in 2009, eliminated nine open positions and reduced the salaries for those who remained. The budget fell from $15 million in 2008 to its current level of $13.7 million. And last May, the Contemporary Museum suspended operations, laying off its full-time executive director and four part-time employees.
It's been clear since last fall to Bolgerand Christine Dietze, the museum's deputy director for finance and administration, that past money-saving measures were insufficient, and that the 2013-2014 budget was going to have to shrink. Expenses across the board have climbed, while once-reliable revenue sources have dwindled.
For instance, government grants plummeted from $3 million in 2008-2009 to not quite $1.7 million for next year — a 43 percent decrease in the past five years.
At the height of the crisis, the museum scaled back on programs, reducing marketing expenses and cutting salaries. It drew on its own holdings when putting together exhibits instead of incurring the costs of borrowing artwork from other institutions.
To make matters worse, the BMA's endowment, which had reached $73.7 million when the recession began, plunged by 39 percent in the 14-month period ending February 2009. It has since recovered its value and even grown to $81.3 million as a result of the stock market rally.
However, "The size of our endowment hasn't increased enough to keep pace with the losses of government funding," Dietze said.
To make ends meet, the museum has been drawing more money than is ideal from its endowment. The benchmark — the rate at which the principal will be maintained – is a withdrawal of no more than 5 percent a year, Dietze said.
For the past seven years, the Baltimore museum has been drawing 5.5 percent of its endowment; that percentage is expected to decrease to 5.25 percent as of July 1.
In addition to the layoffs, the museum is eliminating five now-vacant positions. It's replacing four of those with new jobs in such fields as fundraising and technology aimed at helping to increase the bottom line. In addition, the museum is going to look into ways of raising more money, such as by renting out the museum for more private events.
"These problems can't be solved by cutting and cutting and cutting," Bolger said. "That won't get us anywhere. We have to find new solutions to increase revenues and earnings. We have to think in different ways."