AUSTIN, Texas — William Powers Jr., president of The University of Texas at Austin, delivered his fourth President's State of the University Address Sept. 16, providing a report on ongoing and new initiatives of the university's administration.
The text of the president's speech follows:
State of the University Address
President William Powers Jr.
Wednesday, Sept. 16, 2009
B. Iden Payne Theatre
Thank you, Janet. And thank you all for being here as we celebrate UT's 126th birthday, and as we take stock of the state of our University.
In 1958, a group of citizens called the Committee of 75 assessed our University. It concluded that we didn't measure up to the "truly great universities of this country," and it charted a course to change that. For the last 51 years we have been on that course. It is actually a little frightening to realize that I have been on this campus for more than half of that time, 32 years to be exact. So I have personally seen the progress we have made. We have come a long way, and now we are one of the world's great research universities. The awards and distinctions that we celebrate today attest to that. But since then we have raised the stakes. The Commission of 125 set the goal that we become our nation's best public university, and its members advised us that we need a "disciplined culture of excellence" to get there. In today's formidable economic conditions, we need that "disciplined culture of excellence" now more than ever.
This has been a very challenging year, and the next several years will be even more challenging. The economy and the financial markets have made us all reexamine our situation. But difficult times can bring out the best in us, and they can help us focus on our core values. They can help us concentrate on what is most important. They can inspire us to get better and to create new solutions, which is the path toward excellence. Meeting these demands will certainly require discipline. And it will require hard work by all of us.
Some things don't change. The foundation of our excellence is our people—our faculty, our staff, and our students. We are a special place because of the talent, tireless work, and dedication of nearly 70,000 unique individuals. Before turning to our challenges, let me take a moment to celebrate a few of our accomplishments.
Our faculty continues to receive national recognition in scholarship and research.
As we all know, our students are amazing.
And our staff brings a wealth of expertise, talent, and creativity to our campus every day.
This list of achievements could go on for the rest of my address, but I will stop there. I hope you had a chance to see the video that preceded my remarks. It recognized dozens of faculty, students, and staff. The point is: great people make a university great. We are blessed with great people.
And we made progress collectively as well. We had a banner year recruiting faculty. We hired 112 new faculty members, and they are a tremendously impressive group of scholars. Less than a year after a University report on gender equity was released, I am pleased to say that nearly half of our new faculty members are women, and it is an ethnically diverse group as well.
We had another record year in research. Our faculty, students, and staff earned $596 million in research grants for the year ending in August, a 16.6 percent increase from the previous year. We attracted more federal research grants than any American university without a medical school, except MIT. We received $38 million more than Berkeley in federally sponsored research. To appreciate how far we have come, in 1958 when the Committee of 75 reported that we needed to dramatically bolster our research enterprise, research grants at UT amounted to less than $5 million.
We've made progress in new building projects.
Three weeks ago we welcomed one of our most diverse and talented freshman classes to the 40 Acres. As the result of changes made to the Top 10 Percent Law, beginning in 2011, we will have the ability to build an even more diverse and qualified freshman class.
And we have made further progress in providing our undergraduates with a newly enriched educational experience. This has been led by Dean Paul Woodruff and his colleagues in the School of Undergraduate Studies, and by many leaders in the colleges as well. The Freshman Research Initiative in the College of Natural Sciences, which actively engages freshmen in faculty research, is but one example of important work in the colleges.
This fall, more than 3,500 students are enrolled in 108 Signature Courses. By this time next year, all our freshmen will be taking a First-Year Signature Course. These interdisciplinary courses introduce freshmen to senior faculty and to our many world-class libraries, museums, and collections. This is an opportunity for freshmen to confront big ideas and important issues in their first year. Students and faculty alike report that they value these courses. I teach one of the Signature Courses myself.
This fall the School of Undergraduate Studies received its first students, who number about 850. These are students who have not chosen a major. We have created a new Center for Strategic Advising to assist them and other freshmen and sophomores in selecting a major. The Center's advisers will join our many outstanding advisers from the schools and colleges to give new students the individual attention they need to begin their UT experience with strong support and encouragement.
By design, the process to enhance the undergraduate experience will take several years, and we are making excellent progress.
Our capital campaign has demonstrated remarkable resilience in the face of the recession. During the past fiscal year we raised $281.7 million—one of our best years ever—bringing our gift total for the campaign to $919 million. We will have to work hard to reach our $3 billion goal, but we are nearly a third of the way there, and we are very grateful to all our donors. I am often asked why we don't just use these gifts to make up for shortfalls in our operating budget. The answer is that the overwhelming majority of these gifts are restricted to uses specified by the donor. Philanthropy is very important, however, it is not a substitute for predictable and recurring sources of revenue.
As we applaud these many achievements, we must also emphasize that we face some very serious obstacles. You all know that the last year has brought upheavals in the global and national financial markets. We are very fortunate that these upheavals have not hit Texas or our University as hard as they have hit others. But they have hit us, and they pose a serious threat to our progress. So it's natural for us to have questions about the health, and the future, of our institution. I will try to answer those questions, and I'll try to explain our plan for dealing with these difficult circumstances.
Our financial situation is the product of many factors:
First, the Legislature did approve an increase in state general revenue of about 4 percent. This is in fact better than our 20-year average of less than 2 percent, and many legislators worked hard to help bring this about. The problem is that less than half of this is recurring money, the kind that can pay for recurring obligations such as faculty and staff raises and hiring. And while it is a start, it doesn't make up for the last 20 years when we didn't even keep up with inflation.
It is also a fact that tuition revenues are up, but because of a cap set by the Regents, the increase is significantly less than we had planned. No one enjoys raising tuition, but even with the recent increases, UT remains an extremely good value in American higher education.
The biggest problem is that our investment income is down. The payout from the Available University Fund has actually decreased. More important, it is substantially lower than our normal growth rate. Because of the way these yields are calculated, the impact of the past year's poor performance will affect our payout for three years. When investment revenue is up, it is often an excuse not to provide UT with other funding. When it is down, no one provides resources to fill the gap. Modest increases in tuition and General Revenue have been offset by losses in investment income and by mandated cost increases.
So where does this leave us? Our budget is essentially flat. This is a lot better than other universities around the country, and that does give us some opportunities. But it still leaves us with difficult challenges. The source of money for the things we normally do—like salary increases and new initiatives—has always been budget growth, even modest growth. An essentially flat budget undermines our ability to address these priorities.
This means that we will be required to make difficult choices. We will need to decide what is truly necessary to pursue excellence. We can try simply to balance the budget and tread water, or we can make the necessary hard choices and move ahead to provide the very best education for our students and to fulfill our research mission. In my view, we can't stand still. We must move ahead.
So what are the critical things our campus needs to move ahead? I think the answer is clear. We need to be competitive with our peer institutions in the way we support our faculty and graduate students. We can't continue to compete with one hand tied behind our back, with overall salary and research support for our faculty and support for our graduate students lagging far behind our competitors. Whatever other issues we face, our future is dim if we don't continue to work steadily to catch up.
In fact, we have invested in these priorities over the past several years. Last year we invested in faculty travel programs, and we have put substantial additional money into graduate student support. We've added funding for 30 faculty positions each year for eight of the last nine years, in addition to hiring replacements for departing faculty.
Our current financial situation makes progress this year difficult, but we can't just stop. While we can't add 30 new faculty this year, we will add 10. We will add another $1 million to graduate stipends. And we have budgeted slightly more than $6 million for targeted salary raises, half provided by matching money from the deans. This will raise our overall faculty salary structure by 2.6 percent.
One consequence of lagging behind our peers over many years in our overall salary structure is that has exacerbated salary compression and other inequities as we sought to hire and retain faculty in a competitive market. With this investment, we will begin to remedy those effects, including issues raised in the recent gender equity report. We want to give departments time to carefully consider how to use the money, so faculty raises will be effective Jan. 16 rather than this past Sept. 1. Next year, we hope to return to our more normal faculty merit raise policy.
In the long run, we need to continue to focus on faculty salaries, but we need to do more than that. We need to have a fully funded sabbatical research leave program. We need to continue to add money to stipends for graduate students until we catch up with our competitors. We need to continue to add faculty to reduce our student-faculty ratio. And we need competitive salary raises for the staff so that we can recruit and retain the best talent.
In my view, these items are the most important strategic things we need to do. Current economic conditions elsewhere give us an opportunity to recruit the best faculty from around the country. But that won't help unless we first make sure we are supporting our current faculty and staff.
It would be nice if we could make quicker progress on some of these priorities, such as adding 30 new faculty this year or fully funding a sabbatical program now. But we need to give the deans some breathing room as they sort out college and department priorities. So we will slow down some of these programs. But it is critical that we find savings in the rest of our budgets so that we can return to them.
So where will the money come from? Indeed, where will the money come from just to make up the decline in AUF money and let the deans and department chairs pursue college and departmental priorities?
We will continue to work with our legislators to provide more support for Texas's great flagship university. We will work with donors on the capital campaign. All of this will help. But it won't be enough. We will also have to use our current funding wisely and more strategically. We will have to ask, are our current uses of money really more important than the critical, core priorities I have outlined? I will say this: given the financial outlook, if we don't ask these questions now, we will not be able to move ahead.
The deans are currently engaged in the process of reviewing budgets and priorities within the colleges and departments. That is where much of the progress can be made. I have resisted trying to set policy by presidential edict. You have heard my view of priorities that are critical to our campus, but we need to pursue our vision together. Every college and department has its own priorities. One size does not fit all. Since I became president three-and-a-half years ago, I have pressed to give greater authority for strategic decisions to the deans and department chairs, and they have embraced that responsibility.
Let me give two examples of where this is happening. In Engineering, Dean Greg Fenves has made cuts in operating expenses in information technology, administration, and in the academic departments. The savings will be used to hire new faculty and advance the school's other strategic priorities. In the College of Liberal Arts, Dean Randy Diehl is working with departments to consider difficult choices regarding class size, foreign language instruction, and the size of graduate programs. These cuts would pay for salary raises, a new building, and other initiatives. And our other deans are doing the similar things.
This process with our budgets won't be easy. It won't be quick. It will take a great deal of consultation and discussion among faculty, department chairs, research unit directors, deans, the Provost, and me. It will take dialogue. It will even take some disagreement. It will take adjustment. That is precisely what is going on now and will continue over several years. But we need to do it. Put simply, we need to have our budgets reflect our priorities. As the Commission of 125 said, we will have to establish a disciplined culture as we pursue excellence in the most important things we do.
It is critical that this scrutiny also occur in all of the non-college budgets, mainly overseen by the vice presidents. We will scour every non-college budget to see where we can free up resources to fund our core priorities. I am proud to say that our administrative costs as a percentage of our budget are half the state average among public universities. But we will reexamine all of our administrative processes and programs. As just one example, we have dramatically reorganized Information Technology Services in ways that will produce substantial savings and provide better service.
I'd like to take a moment to recognize our staff, who make contributions every day to make UT an extraordinary place. No one on this campus could perform their work without the efforts of our staff. From the laboratory technician who makes a research project possible to the archivist who maintains our collections, from the technician in our power plant who makes the lights come on to the accountant in payroll who processes our paychecks—we all depend on the staff. I want you to know that I value what you do. You support UT's mission and our aspirations, and you are often our unsung heroes.
While other parts of the campus struggle with budgets and reallocations, staff members have already made their sacrifice. Freezing staff salaries was one of the hardest decisions I have had to make. I will work hard to provide competitive raises for staff in the future. That, too, is a critical priority as we move ahead.
I do want to remind everyone that we have been down this road before. As recently as 2003, UT faced a major state-imposed reduction in our operating budget and large cuts in income from the Available University Fund. It was painful, but we survived. And in many ways, we are a stronger university as a result of those changes. Cost cutting measures initiated during that period have saved UT millions of dollars through water conservation, utility improvements, custodial efficiencies, and recycling. I am confident we can do it again.
In 1958, the goal that UT could become one of the nation's leading centers of research was audacious. Within my lifetime, UT has achieved and surpassed that goal. Our goal to become the best public university in America is equally audacious. But with a disciplined culture of excellence, I know we can succeed, even in these tough economic times.
Today, as I walk across this vibrant campus, I see the many signs of how far we have come. I remind myself that I am truly blessed to work in one of the world's great research universities. I hope you share the sense that the University of Texas is a truly special place where we are surrounded by important work every day. And I hope you take pride in what you accomplish—and in what we accomplish together as a university. It is an honor to work with so many talented individuals. It is an honor to serve as your president. Thank you.