The State of the University:
Day Break at UConn
Michael J. Hogan, President
University of Connecticut
April 20, 2009
Welcome. We gather today to address the state of our university. I thank you for coming at such a busy time when we’re all feeling that last “push” of the semester. Students are staying up late writing papers and studying for exams. As soon as they turn everything in and breathe a sigh of relief, the faculty will stay up late evaluating papers and grading exams. Then, the staff will mobilize to process the results of these mighty efforts. It’s the “all-nighter” portion of the semester, when we welcome the camaraderie of our Midnight Breakfast, revel in cups of strong coffee and admire each other’s disheveled clothes as the uniform of the iron scholar. For many of us in the academic arena, this is our only shot at an endurance sport. But when the day breaks and the heroic mantle is lifted, we must again face the reality that lies before us.
And in the light of day, that reality may be stark. There’s the familiar challenge of intellectual inquiry, of superior service and teaching, and of meeting our commitment to excellence in all of these areas. As a University, we have not wavered in that commitment, despite the unwelcome challenges that have come our way in recent months.
As a student, you may have struggled this year to pay your bills because your family is experiencing unexpected financial difficulties. With our record enrollments, registering for the courses you need when you need them may have felt like completing a Sudoku puzzle. As a faculty member, you may have faced a more crowded lecture hall. Perhaps you’ve been worrying about the future of your advisees or even your department, which has probably run out of paper by now.
As staff, you’ve been managing complaints about the lack of paper and helping us find new ways to make scarce resources go further. And as administrators, you’ve been struggling to find savings, while juggling enrollment, resources, and requests for support.
I slip into theatrical imagery when I come to administrators because sometimes it does feel like a circus; though instead of bowling pins spinning through the air, I picture flaming budget reports. I confess I’ve spent a lot more time with budget issues this year than I would have expected just 15 months ago. Then we were looking to increase state support. It wasn’t long, however, before we moved to a hiring freeze, then to a rescission, and now to another rescission. But before I address the specifics of our current budget, I want to review our funding sources, because it’s important that we understand where our revenues come from.
Over the last 128 years, through both boom and bust, we’ve grown from a state school to a flagship university, enrolling over 29,000 students across all campuses. Our operations require a substantial amount of capital compared to the early days of Storrs Agricultural School, when all students were expected to complete “manual labor between the hours of 2-5pm.”[1] But if we invest substantial capital today, that capital also returns a substantial dividend to the state. In fact, every state dollar allocated to UConn results in a $5 increase in Connecticut’s GDP – a 500% return on the state’s investment.[2]
Of course, not all of our budget comes from the state. This year, 31% came from tuition & fees; another 20% from auxiliary services; and about 15% from gifts and grants. That leaves about 34% of our budget coming from the state. This is a significant amount compared to many other state universities, where tuition long ago surpassed state appropriations as the major source of revenue. But the generosity of the state in funding over 1/3 of our operation means that we feel any cut in our appropriation more deeply than most. And we’ve had some pretty deep cuts lately.
Indeed, the news these days is thick with economic gloom, and we’re all worried about the struggles we face. I get emails from parents who have lost their jobs or homes and can no longer afford tuition; I talk with department heads who fear for the fate of their programs. Part of the worry comes from uncertainty. I’m here today because I don’t want to leave you in the dark – there are no secrets here; but at the same time, there aren’t always easy answers to the questions we may have. Even now the state’s budget won’t be fully resolved until sometime this summer. So why bother? Why not just give up, take exams, grade them, and go home?
Well, the answer is: because the challenges we face are not bigger than we are. I want to clarify these challenges, acknowledge our achievements, reiterate our priorities and shared vision, and convey how we’ll address our difficulties in a way that will lead us to emerge stronger than ever.
I could talk into the night about the details of our budget. Thankfully for all of us, I don’t have to because the faculty and staff on the CORE Task Force have provided useful details on their Web site (http://core.uconn.edu/). CORE, which stands for Costs, Operations, and Resource Efficiencies, has been hard at work, consulting widely with faculty, staff, and students, holding open forums, and making excellent recommendations, many of which are already being implemented.
So, rather than repeating what CORE has said and done, I’ll provide an overview of our budget situation so that together we can start to envision the big picture: Last fall, we endured the first 3% rescission of state funds from our current budget. The Governor has the authority to rescind a full 5% and she rescinded the remaining 2% a few weeks ago. Thanks to the good work of CORE and our candid realization of the potential for a full 5% rescission, we were not caught unprepared. We can manage this second rescission with funds set aside for that purpose at the time of the first rescission and with the savings identified by the CORE Task Force.
We have also asked ourselves if funding in the federal stimulus package might help us out. But, there’s still a lot of uncertainty about the final destination of those funds, and the package itself is essentially a two-year bridging program to help our nation through some difficult times. It’s not a permanent solution for state budget cuts that are basically permanent. In other words, the stimulus funds may buy us a little time to think more strategically about our future, but they will not eliminate the need to make some choices.
So, I’ve talked about stimulus funding, which is uncertain at this point and temporary at best, and about our state appropriation, which is important, but only about 1/3rd of our budget. What about other sources of revenue? What about fundraising, for example? Although our endowment has grown by over 50% in the past five years, it remains modest compared to the endowments of many other large universities and it, too, has been challenged by the economy, losing more than 20% of its value in the last year alone. Annual giving remains pretty much on track, but clearly there is more work to be done before we can count on private giving and our endowment to offset any reduction in state support.
Additionally, we rely on the revenue generated by our auxiliary services. These include everything from the fees charged by Residence Life and dining services to the money we make every time someone buys a UConn t-shirt or a malt from the Dairy Bar. Considerable money is generated this way, but almost all of it is earmarked for specific, non-academic services. Another key resource, research grants and contracts, is a high priority in our Academic Plan. The bad news is that research funding is growing increasingly competitive. The good news is that the new administration in Washington is infusing more funding into agencies like the National Science Foundation and the National Institute of Health, which are primary supporters of sponsored research at UConn. Our Office of Sponsored Programs, by the way, has a new website dedicated to informing the UConn community about potential grant opportunities.
This leaves us with tuition, which next year will constitute at least 33% of our revenue. The Board of Trustees approved a 6% increase in tuition for the upcoming academic year. This is within the range of an average annual increase, but with the loss of state appropriation, it is not enough to maintain our current level of programming and services. So where are we? The governor’s proposed 5% rescission with our 6% tuition increase leaves us with a funding gap of about $15M next year. With the many cost-savings measures we’ve taken, including spending reductions and a potential wage freeze, we can manage this gap in FY10. But the following year could be very challenging, with yet another budget gap of between $10M -$15M, and with many programs already cut to the bone. We need to be strategic in managing this deficit, if we hope to avoid the stagnating and eroding effects of across-the-board cuts.
Fortunately, to the extent that difficult economic times require difficult decisions, our Academic Plan is there to guide us. Our goals for undergraduate, graduate and professional education, for research, scholarship and creative activity, for diversity and public engagement are still our goals. We shape the future of UConn not through financial hardship, but through a defining vision. Our fiscal constraints can help, not hurt, our efforts to sharpen that vision, but only if we use them to sculpt the identity of UConn with an eye to sustaining and advancing our mission.
We’re putting into place new organizational structures and policies to achieve key goals, such as growing our research enterprise, advancing diversity, and improving experiential learning opportunities.
I realize that new practices can be perceived as threats to the programs involved. Some were alarmed when we established the new position of Vice President for Research, with a substantial portfolio; others when we established committees to review graduate programs and practices, and even one to review the Graduate School itself. I know that some of you think we’re departing from the tried and true ways of the past or targeting research, or graduate programs, or other services for an unfair share of the cuts that need to be made. But we are not in the past; nor should we want to be. And sometimes being the target of attention is a good sign, which I assure you is true in this case.
Achieving ambitious goals, like growing our research enterprise and developing top-ranked graduate programs, requires better ways of operating and aligning our resources, however limited, with our priorities. We need to provide more fellowships, for example, if we hope to attract the world’s best graduate students. We need to provide more assistance to researchers who are trying to obtain grants and fellowships. When a promising new faculty member joins our ranks, we need to get her lab up and running more quickly. And lest we forget our colleagues in the arts and humanities, we need to make sure that they have start-up funding, as well.
As we move in these directions, as we try to free-up resources for these and other purposes, it will mean change and some changes are more sensitive than others. Provost Nicholls announced a controversial decision to include partial tuition on grant budgets where it’s an allowable cost. He’s also developed new funding models that give programs greater discretion in setting graduate student stipends. These practices will bring us into closer alignment with other top-25 public research universities. But they will also relieve burdens on the general fund, and allow us to re-direct those funds to enhance other areas of research and graduate programming, including those just mentioned.
Still, these are departures from past practices and no less difficult to swallow than the decision to reduce hours at our Library, our Natural History Museum, and our Benton Museum of Art – decisions that follow from the loss of state funds. We’ve also made decisions to close several centers and institutes, merge academic units, and eliminate low-demand programs. These and other decisions affect all areas of the University – graduate, undergraduate, and professional programs, programs in the arts, the sciences, and the humanities. But they’re made in order to preserve as many resources as possible to advance our strategic goals in exactly the same areas.
I wish I could say, “We’re Done!” because, believe me when I tell you that I’ve felt the harsh weight of difficult decisions as much as anyone and perhaps more than most, if only because as a teacher and scholar, myself, I know the disappointment, the pain, that hard times can inflict on others who do this great work. But I’m sure we’re not done, given the economic climate we’re in and the ambition of our vision. I’m sure we must continue to examine programs, majors, and centers to ask if some are more than we can afford, just as we must examine how we operate and ask if there are better ways of doing business.
These questions won’t be asked and answered behind closed doors, nor have they been to this point. It’s why we have so many more committees in place today than we did a year ago; committees comprised of our most accomplished faculty and staff, who are wrestling with difficult issues and making concrete suggestions regarding our programs and operations. Although we may not always agree, I’ve appointed these committees to advise me, I appreciate their consultation with me and with you, and I salute their commitment and hard work. I’ll tell you now that there will probably be more such review committees and more of you will be asked to serve, because through that consultation we find the best answers. I understand that such reviews can cause anxiety, but we must consider all the options, if we hope to move our strategic priorities forward under different budget scenarios.