Provost details plans for closing budget hole

With the campus facing a $38.2 million shortfall in the coming fiscal year, new Provost James V. Staros focused his first address to the Faculty Senate to flesh out the campus administration’s plans to close the funding gap.

Speaking at the Oct. 15 meeting, Staros said the projected 12.4 percent shortfall translates to $25.6 million for Academic Affairs.

“Even with new revenue generation, a cut of this scale, taken all at once, would be damaging,” he said. “This is a stunning amount of money.”

Staros backed Chancellor Robert C. Holub’s proposal to spread the funding shortfall over two years by using one-time federal stimulus funding this year as a bridge to the next fiscal year. “This will allow time to ramp up revenue generation,” he said.

While the campus will continue to pursue more state support, he said, the reality of declining tax revenues and increased competition for scarce public funds require a different tack. “It’s rational to try and put into place programs and initiatives that give us more control.”

Staros outlined several options for boosting revenue, including bringing in more out-of-state undergraduates, higher fees for Continuing and Professional Education (CPE) and summer courses, expanding five-year bachelor’s and master’s programs, increasing external research funding and expanding the practice of having faculty buying out their research time.

According to the provost, the full tuition and curriculum fee paid by an out-of-state equals $21,000 more than an in-state student pays. “Even putting some aside for financial aid, the difference is substantial,” he said.

Short-term plans call for boosting out-of-state enrollment by 300 students per year, said Staros, adding that the quality and size of the current applicant pool could produce that many additional undergraduates.

“If we can get the yield from the current level of 11 percent to 15 percent, we’ll have met the goal for next year,” Staros told the senate. “We’re not doing a good job of yielding applicants.”

As part of that effort, the provost said a search is being conducted for an assistant provost for enrollment management, who will oversee recruitment, admissions and financial aid.

At his previous school, Stony Brook University, said Staros, the administration was able to make the admissions process more selective while quadrupling out-of-state enrollment.

Staros said he is working with Joyce Hatch, vice chancellor for Administration and Finance, to develop a process allowing academic departments that recruit out-of-state applicants to receive 40-50 percent of the net revenue for each student enrolled. Those funds could be used to cover the added instructional costs, he said.

The administration is also proposing to bring fees for CPE and summer courses in line with the academic fee structure for other students, he said. Currently, CPE students pay $290 per credit, whether they are Massachusetts residents or not.

The proposed new fees would be $353 per credit for in-state students and $627 per credit for out-of-state residents.

Departments whose faculty teach CPE courses now receive about $180 per credit after costs, but the share would rise to $209 and $442 under the proposed new arrangement, Staros said.

“A tiered cost structure would reward volume,” he added, by decreasing the amount retained by CPE if departments reached certain benchmarks for credit hours taught.

Summer enrollment can be increased by incorporating the academic term into new programs and five-year, combined bachelor’s and master’s programs, Staros said. He also suggested that professional master’s programs might include a summer component. Other options for summer offerings include certificate programs that could serve as add-ons to majors.

“The senate can help by fast-tracking straightforward proposals” for such programs, he said.

On the research side, Staros reported that the campus has been awarded $36 million in federal stimulus funding and that external support is up 87 percent when compared with the first quarter of fiscal 2009. Since the indirect costs that come from external grants benefit the campus, schools and colleges, departments and investigators, the growth in grants is important, he said.

Other research-related monies can be captured by following the campus’s 11-year-old policy that encourages researchers to request reimbursement of anticipated costs, including faculty effort, in their proposals to funding agencies.

“If we follow the campus policy, it should result in more reimbursed faculty research effort,” said the provost, noting that the savings will accrue to the researchers’ school or college. “This is really an important strategy.”

Also under study is the concept of differential student fees, an idea mentioned last month by Robert Manning, chairman of the Board of Trustees. Staros said differential fees could be applied to the campus as the system’s flagship as well as Commonwealth College.

Such fees, if adopted, could provide a new focus on the undergraduate experience by supporting the hiring of new faculty, said Staros, and offset the additional cost to the campus’s operating budget of running Commonwealth College, which lost its state line-item funding earlier this year as lawmakers adopted austerity measures.

If additional student charges come to pass, Staros said, maintaining access will be an important factor. In the current fiscal year, the campus increased its financial aid budget by $3.9 million and any future increase in student costs must allow for some of the revenue to be set aside for need-based aid. As state support for financial aid declines, a new campus-based model for assistance should be developed, he said.

“All of the discussions include a generous portion [of revenue] for financial aid,” said Staros. “This administration is committed to access.”

Leans times are also affecting plans for hiring, he said, with the $3.2 million originally budget for new faculty reduced to $1.5 million. “We’re not doing anything like a full replacement plan this year,” the provost said. “It’s very, very thin.”

A hiring proposal process announced last November will continue to guide decisions on faculty replacements, said Staros. The “Faculty RFP” process centrally funds new hires that are aligned with the campus’s long-term strategic priorities.

In light of the evolving financial situation since last year, the provost said the RFP review process is being adjusted to the campus’s changing needs. While the original RFP process emphasized research, Staros said the review committee has been asked to request further information from the units submitting the proposals on how the hires would improve the educational mission.

“We’ll have a couple of dozen new faculty in an otherwise dismal year,” he said.

Despite the current difficulties facing the campus, Staros said the administration’s actions are aimed at positioning the institution for membership in the Association of American Universities, an invitation-only organization of leading research universities.

“There is nothing the chancellor and I would like better than to lead UMass Amherst to the AAU,” he said.

October 19, 2009.

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