May 10, 2010

Confronting a Budget Challenge

You may see some media reports about budget cuts at UT.  These cuts are largely confined to administrative units.  The Office of the President, for example, has reduced its budget by 8 percent.  Here is a message that I shared with faculty, staff, and students earlier today describing the budget reduction plan.

Dear Colleagues:

Faced with a forecast of declining operating budgets, UT has initiated a plan to make budget cuts of $14.6 million in annual recurring expenditures.

Before I share the details, I want to say that I know this has been a difficult year for the campus. Many people have made sacrifices, and it hasn’t been easy. The faculty, staff, and students have all contributed to these efforts. Much work remains, but I am proud of the way we have worked together to confront these challenges.

Given the financial realities UT faces during the next few years, these budget cuts are prudent and necessary. We have done our best to protect the academic enterprise—teaching, research, and the student experience.  More than 90 percent of the cuts come from administrative units.  These cuts in the administrative portfolios ranged from 1-8 percent. Only about one-half of 1 percent came from academic colleges and schools.

While we have worked to minimize the loss of jobs, when the budget reduction plan is fully implemented, about 200 positions in the administrative units could be affected. Included in the 200 are about 125 positions campus-wide that have already been eliminated in the past year. More positions in academic units will be affected in the future, when deans implement their own re-allocation plans.

We believe the majority of these changes will be implemented through retirements and attrition, but not all. I deeply regret that these budget cuts will cost some jobs. We will do everything we can to help the employees affected.

To achieve the budget cuts we are announcing today, administrative units have also reduced or eliminated expenditures such as travel, equipment, supplies, services, printing, and mail costs. 

The operating units have been permitted to phase in budget reductions between August 31, 2010 and August 31, 2011.  However, some units will choose to move forward immediately. 

Our situation is compounded by many factors, two of which are decreased investment returns from our endowments and the need to maintain competitive compensation levels for our employees.  As you know, all staff and most faculty did not receive raises in fiscal year 2009-10. We are re-allocating resources in the operating units to fund a 2% merit raise pool for faculty and staff. All employees are eligible, but I want to emphasize that the raise program is merit-based, so not all employees will receive raises. 

It is essential that we set aside funds to reward excellence in our faculty and staff. If we don’t do that, we won’t remain competitive and retain the best talent available. We remain committed to pursuing our goal of becoming the leading public university in the nation.

We continue to reduce expenditures and increase efficiencies throughout the campus.  Programs implemented since 2003 to centralize business transactions, conserve energy, and restructure information technology services, among others, now save more than $50 million annually.  Our administrative costs as a percentage of our total budget are among the lowest in higher education.  I want to thank our hard-working staff for making this possible.

In the long term, university leaders, elected state officials, alumni, students and their families, the business community, and our citizenry must develop a new funding model for public higher education. The current model of replacing decreased state support with budget cuts is not sustainable. We must find a way to fund and preserve the public research universities that nurture economic growth, address the challenges of society, and promote individual advancement.  The future of higher education is at stake.

What we accomplish here every day is important to our students and their families, and to the people of Texas.  It is crucial that we work together to manage these difficult times and move forward.  Thank you for your help and for all you do for the University.

Bill's Signature






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6 Responses to “Confronting a Budget Challenge”

  1. Grad Student 2 says:

    President Powers,

    I was particularly interested to learn that “TAs and AIs participated in the merit pool increases in 2008-09 and will participated in 2010-11.” Could you please elaborate on how this process works?

    While I believe that UT doesn’t do enough to support its graduate students (your comment above even implicitly acknowledges that competing universities often offer more competitive compensation packages), I am very happy to learn that excellent graduate students are eligible for merit pay increases. There has been a lot of debate on this blog regarding Mack Brown’s compensation. The general philosophy in justifying his enormous pay check has been that excellent performance is rewarded with excellent compensation. Similarly (but to a much lesser extent) the university rewards faculty members who demonstrate excellence in scholarship and teaching with large pay checks. The regents’ chairs are the most notable example of this, with faculty members in these chairs taking home 2-4 times as much of some of their tenured colleagues. In fact, there is wide pay disparity throughout the ranks of the faculty. Indeed, looking over the publicly available salary information, it is hard to find two faculty members with the same compensation.

    It was my understanding, however, that there is only slight variations in compensation for TA’s and AI’s (for example, there is a very modest pay bump that is linked to entering PhD candidacy), none of which are based on merit. This gives the strong impression that UT doesn’t value hard work or excellence among its graduate students. (If we can’t compete with top universities across the board in graduate compensation, surely we could at least recognize those who demonstrate excellence, as we do with staff and faculty?) In fact, I recently asked my advisor about the possibility of a merit raise, and he said he was unaware that such a thing existed (for graduate students). Moreover, I have yet to identify a graduate student in my department who has received a merit raise (in fact, my informal survey included all graduate students in my department who have received departmental awards — surely one would expect that these individuals would be likely candidates).

    However, if I understand your comment correctly, merit raises do exist!

    Can you explain: (1) How the merit raise process works, (2) what are the magnitude of the merit raises; and (3) how many of these merit raises were given to graduate students in 2008-2009? (to the best I can ascertain, no one in my department received one).

  2. Irene says:

    How ironic that the university celebrates staff one week and reports that 90% of budget cuts will occur in administrative units the next. This certainly gives a mixed message: Staff are valuable! Staff and their programs are expendable!

    Both of these events appear to have occurred in a top down way that has done little to increase the two-way communication so necessary during financially challenging times. Where leaders–presidents, provosts, vice-provosts, vice-presidents, deans–engage in one-way, top down communication, they leave behind a trail of concerned employees who wonder why their intelligence, experience, and ideas are underutilized or ignored. Please! Reach across staff ranks, ask what we think, then respond.

    Rather than hand out mini brownies, commit to improving communication and increasing connection. Make comments to a few Ideas of Texas posts. Make time to visit buildings to meet people. Make phone calls to random staff to hear their views and share your own. Ongoing, small acts of two-way communication do more to show appreciation than free concerts–and cost less. Just connect to the people who work for you!

    • Jackie Dana says:

      As the coordinator of Staff Appreciation Week, I’d like to point out that it was created and coordinated by the UT Staff Council, not the UT administration. In other words, in no way was it a “top-down” event. Furthermore, it was never intended to placate staff who have been working within a very tight budget this year, and in fact, it was conceived well before the President announced the first budget cuts. Instead, Staff Council’s goal in creating Staff Appreciation Week was to send a positive message about UT staff to the entire UT community, by highlighting and recognizing the dedication of thousands of staff members that work hard every day to make UT the excellent university that it is.

      From here, Staff Council’s ongoing mission will continue to be to promote the needs and efforts of UT staff with all members of the UT community, including the faculty, students, and most of all, the administration. As part of those efforts, at our May 20th meeting, three adhoc committees that have researched possible solutions to pressing problems facing UT staff will be making their final presentations to President Powers. We encourage you to attend this meeting, to be held in Main 212 from 12:30-2pm.

      • Irene says:

        Jackie,

        I’m grateful that you posted your thoughts and provided more context for Staff Appreciation Week. Thank you for that and for the work you did to coordinate the events. In no way did I mean to denigrate any of the week’s activities, and, clearly, I was incorrect in suggesting that the effort was top down. My apologies. I was not implying that the activities were intended to placate staff—that never even occurred to me. What I was trying to do was highlight that staff may feel more valued when leaders engage them in two-way dialogue around substantive issues.

  3. Grad Student says:

    President Powers,

    I am a graduate student at UT. Like many others at UT I have made sacrifices due to recent budget issues. For example, course offerings in my department have been reduced, my teaching workload has increased, and travel support has decreased. In addition, my adviser’s teaching obligations have increased as well, leaving less time to oversee my research. Earlier this year the Daily Texan reported that some graduate students at UT were paid BELOW THE POVERTY LINE. Earlier this year you wrote in a campus wide email that:

    “The University Budget Council and I have reviewed the budget for the coming fiscal year in light of the current economy and the actions of the 81st Legislature. The University of Texas at Austin has fared better than many universities in other states. We do not face pay cuts, mandatory furloughs, and other austerity measures that peer institutions across the country are experiencing. In fact, our sources of funding will grow modestly next year and would allow for a balanced status-quo budget. But in light of what is happening elsewhere, this is an opportunity to advance the university rather than settle for the status quo. For us to move ahead, however, we must focus our available resources in areas that have consistently been identified as the most critical for progress-our competitiveness in attracting and retaining outstanding faculty and graduate students.”

    My question is simply: What areas of graduate support have you increased as an effort at “attracting and retaining outstanding … graduate students”?

    • Bill Powers says:

      Thank you for your comment. Support for graduate students has been one of my highest priorities since I took office.

      I added $1 million dollars in graduate fellowship funding to the budget in 2009-10. These funds, administered by the Graduate School, were used to create new graduate fellowships and extend existing fellowships.

      The University has continued to increase funding for our teaching assistant (TA) and assistant instructor (AI) tuition assistance program. In 2008-09, an additional $2 million was allocated, in 2009-10 an additional $3 million, and for 2010-11, an increase of $1.4 million is tentatively budgeted. TAs and AIs participated in the merit pool increases in 2008-09 and will participated in 2010-11.

      I also budgeted $1 million in new funds in 2007-08 for graduate fellowships, and specifically, in recent years we have expanded graduate student support in History, English, African and African Diaspora Studies, and Fine Arts, among other programs. For the three-year period 2008-09 through 2010-11, we provided $200,000 per year for the thematic fellowship program administered by the Division of Diversity and Community Engagement. UT’s tentative budget for 2010-11 has an additional allocation of $500,000 for graduate fellowships.

      Furthermore, when alumnus Dr. Steven Ungerleider asked me what he could do to help the University achieve its goals, I talked about the importance of supporting graduate students. Dr. Ungerleider responded with a $1 million gift to support graduate fellowships. I was honored that he named the program the William C. Powers Graduate Fellowships. The first class of Powers Fellows was initiated in fall 2009. Meet the 2009-10 Powers Fellows.

      Part of Dr. Ungerleider’s intention was to help top graduate students whose first choice is UT who but receive more generous financial packages from other institutions.

      Here’s more information on Steven Ungerleider’s gift and the Powers Fellows program.

      I want to once again express my gratitude to Steven for his thoughtful commitment to graduate education at UT.

      Bill Powers