Bottom Line for UT from the 82nd Legislature
Now that the 82nd Legislature and its subsequent special session are over, I’d like to give you an update.
The Legislature passed bills that are designed to make textbooks more affordable to our students, to make the financial aid application process more user-friendly, to improve student success, to provide graduate fellows with insurance coverage, and to relieve some of the costly burdens of state regulation of higher education.
But for UT Austin and our state’s other public universities, the biggest news is the budget.
The state revenue shortfall resulted in cuts throughout government, including higher education. UT Austin’s budget was reduced by $92 million for the biennium, which includes the 2011-2012 and the 2012-2013 fiscal years. That translates into about a 16.5% reduction in our state support.
This action extends a decades-long trend—UT Austin increasingly relies on resources other than state revenue. In the fiscal year ending this August, state support to UT Austin amounts to about 14% of our annual budget. In 2011-2012, our state support will decline to about 13.3%.
It is important that we recognize that our elected representatives faced great challenges during the legislative session. There were no easy solutions. I thank our friends in the Legislature as well as all of you who voiced your support for higher education.
Fortunately, we anticipated the state budget shortfall, and UT Austin has been preparing for these cuts for almost two years. My office, for example, has reduced total spending by more than 10% by trimming entertainment, discretionary programs, and staff.
But make no mistake, a $92-million budget cut will affect our core academic mission. While we have done our best to protect UT’s academic programs, our students will encounter reduced student services, course offerings, and financial aid. Our faculty and staff will have to do more with less, and we will be forced to eliminate jobs. I will share more details about the consequences of these cuts as we move forward.
I recently announced that we will provide modest merit-based salary increases for some faculty and staff. Funding for this has been created internally through our austerity. Remaining competitive for faculty and staff talent is one of our top strategic priorities. To allow our talent base to erode would betray our Constitutional mandate to be “a university of the first class” and shortchange the young people who will lead Texas in the future.
The most important message is this. We are resolved to pursue our vision for UT Austin, and this requires change. We are reinventing the way we do certain things, such as harnessing technology to teach more effectively and more efficiently. We are aggressively commercializing intellectual property and developing other revenue streams. We are working daily to streamline our operations and to make our campus more energy efficient and sustainable. And we are collaborating with other universities across the nation to define the public research university of the future.
But some things never change, such as our commitment to education and to nurturing the people and the research that changes the world.
I have heard from many of you in recent months. I cannot express how grateful I am for your ongoing support. Thank you.
Hook ’em Horns!
Argus’ math on the budget numbers makes sense to me. I suspect that is why President Powers has NEVER said, “The sky is falling.” To the contrary, he has noted publically that the cuts will be painful but are manageable, and that UT has prepared carefully for them. As a faculty member who has been at UT since 1978, I can see and feel this pain—and hope that our credentials as a top-flight public research institution will not be devalued as a result.
Mr. Cherwitz,
With all due respect, I find your belief in the statement that “the cuts will be painful but are manageable, and that UT has prepared carefully for them” a bit naive. Two questions quickly come to mind:
A) What is your definition of “manageable” when scores of staff and teachers have already lost jobs?
B) How do you know that UT has prepared carefully to meet the financial crises?
Mr. Powers’ convoluted messages about how to deal with financial crises leads me to believe that little is in control, if any. For example, here are a few statements from the above message for you to ponder upon:
A) “Fortunately, we anticipated the state budget shortfall, and UT Austin has been preparing for these cuts for almost two years.” However, now read point B.
B) “But make no mistake, a $92-million budget cut will affect our core academic mission. While we have done our best to protect UT’s academic programs, our students will encounter reduced student services, course offerings, and financial aid. Our faculty and staff will have to do more with less, and we will be forced to eliminate jobs.” Now read point C.
C)”I recently announced that we will provide modest merit-based salary increases for some faculty and staff.” Now point D as conclusion.
D) “But some things never change, such as our commitment to education and to nurturing the people and the research that changes the world.”
Could you please elaborate for me how these contradicting remarks convey a consistent message? I write this only to elucidate that in my perspective some of the frustration voiced by staff and/or faculty is appropriately directed.
Argus’ writing style is reflective of a person speaking from the heart, but his/her views are logical well reasoned. Therefore, I for one, enjoy his/her frank delivery.
With respect, $92 million short is $92 million that has to come from somewhere, and that that is a mighty big pile of change, and the small percentage characterization is accurate but in the big pile of change sense misleading.
If rules about flying on UT planes aren’t being followed, putting specifics in writing to the Board of Regents, with cc:’s of the correspondence to, e.g., the Austin-American Statesman, among others, might scoot things along to straight answers to such questions.
President Powers has stated that “we will be forced to eliminate jobs,” a situation likely to be faced by numerous state and federal agencies, in part because personnel are a large expense. I don’t want to estimate what personnel costs are at UT, but figures like 80% are common among large agencies, and I would suspect it is around that proportion at UT. But I just don’t know.
When budget cuts arise, so do reductions in force—does UT have published rules about how RIFs work? If not, it should, and take into account things like seniority and job performance. It is painful stuff, but not necessarily sinister, and it ought to be transparent. The federal agency that I work for in Washington, D.C., is getting ready to send out RIF procedures; they are, from what I understand, based on agency units. Field offices are also being evaluated. The fact is that the entire United States is going to face hard times to get the budget situations under control, and that’s going to hurt a lot of people even more than they have been hurt already.
Mr. Larson & Mr. Cherwitz,
My primary point is that when UT Administrators say “We have to make cuts,” their “hard choices” do not affect those in power who earn big salaries and enjoy lavish perks.
In other words, when they say “We,” it is the royal first-person plural, because those who are already paid well (and quite often overpaid, on the pretense that they are just too valuable to lose) never feel the pain. Instead they put a few low-paid housekeepers and administrative assistants on the chopping block.
The cuts are never equitable–to be shared by all–that is, not unless you consider the case of an Executive Director accustomed to slicing himself a 7.99925% share from the raise pool for 2008-2009 (because special approval is required for an 8% raise) having to be content with a mere 3.4% raise for 2010-2011.
As far as any guidelines for staff reduction: Come on! This is UT Austin! Administrators and managers decide whom to axe and Human Resources promptly papers it over. HR makes a bunch of empty promises such as “flagging lay-offs for re-hire” without any mechanism to do so. The only consideration before depriving an individual of their livelihood is whether it might trigger a lawsuit. And no matter how well an employee performs, if his or her supervisors watch long enough and disregard that employee’s real contribution and couch all the employees’ performance reviews in negative terms, they can get rid of that employee with no fear of repercussion–because his or her fellow employees are savvy enough not to get themselves on the same list by speaking up about an injustice.
And good luck in getting any specifics on the use of state-owned aircraft by UT officials. Have a look at that silly Budget 101 page if you’d like to see exactly how eager UT officials promote transparency. Appealing to the Regents regarding over-use of the aircraft when plenty of commercial flights are available is something of a funny idea, because (unless their own companies have private planes they can use as a tax write-off) the Regents themselves are some of UT’s most frequent fliers.
The UT Aviation page is a paragon of impenetrability. Have a look at it yourself and see how easily specifics can be broken out of the cost summaries.
https://www.utsystem.edu/air/
You *will* find this quotation on that page: “It’s the best airline in the business…..no delays…no lost luggage….great crew!!”
I’ll bet! And all at state expense!
One more word about perks for the wealthy: IF you can get any information on it, I’ll bet you that on the nights before and after UT home football games, every single room at the Regents’ Hotel (aka the ATT Conference Center) is comped for the Regents and rich donors. Just a guess, of course.
You might also be interested to know that although the cost-effectiveness of using the Regents’ Hotel was ballyhooed as a reason for its construction, very few UT departments provide lodging for a visitor at the Regents’ Hotel because its rates are so high.
Mr. President,
Thank you for quoting some hard figures.
Frankly, we don’t see many of those from UT administration–although a great many numbers are thrown around in various guises.
As others have commented, in terms of lack of specificity, the Budget 101 page and its graphics resemble cartoons more than spreadsheets. That thing is virtually meaningless. Come n, sir: We *know* you have much better numbers people than Budget 101 indicates.
More than anything else we hear the financial equivalent of “The sky is falling! The sky is falling!” As if the poor little University is about to go bust so people working at UT had better keep in line and shut up and be glad they have a job at all.
The negative incentive of fear remains UT’s main tool in dealing with staff. Not encouragement to do well or hope for a reward–but fear of unemployment.
But let’s look at those numbers for a moment. And using the figures you have provided, let’s do a little math to see how large a reduction we’re talking about in the overall budget.
You say that for 2011-2012 state support accounts for 13.3% of UT’s budget, and that it will decline by 16.5%.
13.3% = .133 and 16.5% = .165, so 16.5% of 13.3% = (.165 X .133) = .0219145 = 2.19145%. The effect of the State of Texas’s cut on the whole budget is minus 2.19145%.
In other words–assuming that the shortfall is not plugged by any of the other sources you named, or by enhanced revenues from a cash cow such as the Ticketing & Towing Department (aka Parking & Transportation)–UT will have to get by on 97.80855% of what it had to spend before.
Nearly 98% of the money is untouched.
So why do we only hear doom and gloom? Why do layoffs targeting non-favored employees continue? How come no fat cats who work 20-hour weeks if they like are looking for jobs?
How come (in defiance of the Regents’ pertinent rules) high-ranking executives don’t have to fly to Dallas or Houston on a commercial airliner? While we’re on the subject of UT’s fleet of turboprops, why does it now requires a special password to check when and where those planes are flying? Is it because before the information became password-protected, even a cursory glance revealed that the most frequent destinations were Love Field and Hobby Airport (which are both served by commercial carriers several times daily)?
Play hard but play fair, Bill. The age when a pampered elite at UT could always depend on big raises and steady lavish perks the way others used to count on job security is over.
2% of a 2 billion dollar budget is a lot, especially when that 2% affects the academic core of the budget which is funded entirely by state, AUF, tution, and indirect cost revenues.
The sky isn’t falling, but trimming “the fat” (which means staff first) ultimately leads to trimming away the meat.
It’s great that President Powers isn’t blaming the Legislature for any state cuts, I guess he is focusing all of his ire on the Governor for now.
But then again, he formed the Texas Coalition for the Status Quo in Higher Education, which specifically states that it will fight against any reforms, yet mentions many of those same reforms here as if they were his own ideas. So who knows what to think?
If the reader is referring to the Texas Coalition for Excellence in Higher Education, President Powers is neither a founder nor a member of this group. The reforms mentioned in the blog post have been ongoing for several years and flow predominately out of the recommendations of the Commission of 125. –Tower Talk moderator
AustinLonghorn,
You are absolutely wrong. The Texas Coalition is fighting against the wrong kind of reform, not reforms in general.
If indeed you care about these issues, you will educate yourself about budgetary issues, read UT’s website, and look carefully at the reforms that UT itself has proposed for years.
http://www.utexas.edu/reinvention
Otherwise, you are simply promoting bad dialogue and bad ideas. It is interesting that your comment made on here, yet others in the TPPF and Rock the Ivory Tower routinely censor their blogs when inconvenient truths are posted about UT’s success and innovation.
Thank you for being responibile to keep The University of Texas at the academic level , we have come to expect, into the next generation.
I cannot begin to fathom how difficult it is to navigate a large public institution, like UT, through such difficult fiscal reforms. Choosing what is important to students, faculty, and staff and balancing that dynamic with the concerns and decreasing support for public funding for higher education (a national trend) is an unimaginably difficult task. And so, as an undergraduate student who has benefited immensely from my time at UT, I wanted to take some time out and commend you for your commitments and voice additional support for your vision for the University of Texas.
The clairvoyance to pursue alternative investments – ahead of the austerity measures from the state legislature – from the private sector (longhorn network, licensing the image of the tower to h2 Orange) and pursuing intellectual property revenue, will no doubt prove invaluable to sustaining a tradition of excellence started more than a hundred years ago. I am proud to be a student at the University of Texas; I am proud to share a part of its legacy. When called upon to donate in the future, as a member of its extensive alumni network, I will no doubt be generous (no doubt as a by-product of my support for your helmsmanship and fiscal shrewdness during my college years).
Here, I would like to offer a few of my thoughts:
As a public institution, UT is subject to the whim of Texas as a subordinate polity in the US; UT, as a by-product, is forced to function within the strict guidelines set by a deeply conservative ethic. This is not some trend that seems fleeting. The post Ann Richards era has marked a strong trend toward a highly conservative state. This, like all things, has its advantages and disadvantages. The key, here, is that the recent outcries against higher education funding (and higher education in general), are not going to disappear in the near future; this should be seen as a bellwether for things to come. Your already prudent pursuit of alternative revenue, in my humble opinion, should be continued with fervor. And, here, leveraging the UT brand and attracting top research talent will be critical to receiving private sector funding. It may be prudent to leverage business relationships within the Cockrell and McCombs colleges. Creating an open forum that appropriates problem solving and commodification to particular faculty could be a possible solution to maximize the usage of the rich resources and intellect within the faculty. The reason that UT and UT Southwestern receive the relative funding and support that they currently do is because of their relative prestige (and national reputation). The ranking of UT, however taboo to discuss, is vital to its continued private sector funding – philanthropy is often targeted at institutions based on perceived reputation and not on actual merit. If UT loses its status as a tier-one research University, like A&M was threatened with, the results for funding would be catastrophic. I work in an undergraduate biology lab, and I know something of the difficulty in receiving grant funding; academic reputation plays a vital role in funding. We, as an institution, should look toward the shining example of the University of California system. There, the long-standing tradition of excellence and recruitment of faculty has fostered a general perception of academic gravitas. There reputation has allowed them to survive fiscal nightmares that were a by-product of external policies from the state legislature. This situation draws some strong parallels to our current situation. I also think that, in this area, repealing the top 10% rule will be critical. The legislation unnecessarily binds the UT to a non-holistic admission policy. This artificially limiting aspect can, ultimately, be detrimental to student body quality.
Again, thank you for your continued drive for excellence.