The Otago University Students Association has decided to go into the red next year in order to retain its existing level of services and financial support to students.
While the organisation would "ideally" have liked to break even, its executive had decided to budget for a deficit of just over $89,000 in its operational budget, president Edwin Darlow said last week.
"We didn't want to decrease services unless absolutely necessary, because of the value they provide to students . . . Things like the foodbank, welfare assistance and advocacy are needed now more than ever."
Students will debate and vote on the draft budget at a student general meeting this week.
Next year's deficit is almost the same as the figure anticipated in this year's budget, meaning that in just two years, the OUSA will have spent almost $180,000 more than it earned and will have to dip into its reserves of about $3.4 million to meet the shortfall.
As a not-for-profit organisation, there was a "philosophical argument" reserves should be used when necessary rather than being left to build up, Mr Darlow said, although he conceded that could not happen every year or the reserves would disappear.
The 2010 capital budget is expected to return a surplus of $318,062, $93,400 less than this year.
A sum of $300,000 was going to be set aside next year towards rebuilding the Unipol gymnasium at the Forsyth Barr stadium site, but Mr Darlow said the executive had decided no funds should be committed until more information about the project was known.
The OUSA is a 40% shareholder in Unipol.
The OUSA receives its income from compulsory student levies, business activities and sponsorship.
The draft budget anticipates an additional $232,600 from student levies next year.
Levies have been increased by the official rate of inflation - 2.3% - to $179.59, $4.04 more than this year.
One reason for the operating deficit next year was an anticipated $67,000 fall in income from commercial activities, attributed by Mr Darlow to "the environment everyone is in".
The executive has made only one significant budget reduction, cutting the subsidy to students travelling to national university games events by 44%, from $27,000 to $15,000.
• OUSA operational budget
Income
Student levies: $1.48 million ($1.3 million this year)
Commercial revenue: $580,000 ($647,100)
Total income: $2.07 million ($1.95 million)
Expenditure (selected line items)
Administration: $539,000 ($503,800)
Student support centre: $204,000 ($188,000)
Events: $195,000 ($180,500)
Executive honoraria and operational costs: $192,000 ($186,500)
Planet Media (Critic etc): $108,170 ($108,170)
Sport and clubs and societies grants etc: $709,642 ($671,255)
Total expenditure: $2.15 million ($2.04 million)
Deficit: $89,076 ($89,189)
