Comments on Status of the FY02 Budget

Prefatory Remarks

Before I begin my comments regarding the University's current budget situation and implications for the Amherst campus, I wish to clarify the issues of fees. I will address this issue at greater length later, but I want to make several items as clear as possible now.

Trustees have raised the mandatory fees for undergraduate students by $495, starting with the spring semester. Of this, $230 has been designated to be added to the Curriculum Fee, and $265 has been designated to be added to the Service Fee.

Many people are now questioning how the Service Fee monies will be spent. The breakdown that has been reported is that $65 is designated for athletics and $200 is designated for infrastructure needs.

Does this $65 designated to athletics mean that the Athletic Department budget will be increased? No, it does not.

As is the case with many units on campus, the Athletics Department receives revenue from a number of sources, including from the campus' operating fund. The $65 increase to athletics in the service fee will allow the campus to utilize for general institutional purposes an equivalent amount of campus funds that had previously gone to support Athletics. In net, the Athletic Department will not receive a funding increase.

Regarding the rest of the $200 increase in the service fee: As with the $65 to athletics, other monies added to the service fee will free up funds that can be used elsewhere to support the central mission of the campus. There is talk about this money being set aside for a Recreation Building. This is not the case with the spring semester increase.

A student recreation center has been a part of the campus capital plan for a while. At the July meeting of the Board of Trustees the Board approved such a facility for the Amherst campus. Students were on record as having supported a student fee that would be used to pay for part of such a building.

Three weeks ago the University was faced with a $25 million dollar deficit. In an attempt to mitigate this deficit, fee increases were approved to provide funding for the curriculum, the infrastructure, and general support for the student experience on the campuses.

An increase in the infrastructure fee now has as its longer-term goal the construction of student recreation center. We are some years away from having such a recreation center on the campus. Meanwhile, we are able to use those monies to enhance the overall experience of students on this campus.

I hope these comments lay to rest concern about the Service Fee. I will now return to my general remarks.

Comments on Status of the FY02 Budget

The last time I came to talk with you, only a few days after Sept. 11, I spoke of the need to turn toward each other in difficult times. Since then, you may have heard me speak about "living values," about our commitment to support the learning and well being of others. Today I will talk about our budget situation - but from the outset, I want to make it clear that for me, these are not separate conversations.

We will come through this challenge, stronger than we are now. I know we will. But for that to happen, we must turn toward each other and trust in each other's integrity. I need to ask you to trust in my integrity and my commitment to the health of this institution. I will not make any decisions that I believe would do harm to the University. I've been here too long, and worked too hard ever to do that - and my tenure here pales in comparison to that of most of you. And I know you have worked too hard to let harm come to the academic core of this campus.

But I will make decisions. They will not necessarily be popular decisions with all groups on campus. They may not be the most politically sensitive decisions. My position this year allows me to sustain a focus on what is right for the institution, rather than on what may be politically expedient on this campus to please some constituents.

I will make decisions. And to do that, I need to trust in your integrity - that at every level of the academic enterprise, people will be honest, respectful, and forthcoming with the information that we all agree we need in order to determine our course through the current situation. We simply cannot afford to do less.

We do not have the funding we had expected, but we do have our integrity, our commitment to the enduring values and purposes of this University, our passions, and our analytic faculties. I am confident that those are more than adequate to help us do what we need to do.

To be clear, the parameters of the situation are these:

Reductions in state funding have left the University system with a $25 million dollar deficit to address. Of that, this campus is facing an approximate $12 million dollar problem for the current fiscal year (this figure includes the devastating slash to the Library's ERM budget). Added to that is a $3 million dollar shortfall which is the result of commitments made and spending initiated this year based upon our anticipation of a modest appropriation increase (from original planning for the year at 3%, then to 1.5%, to 1%), exclusive of contract costs. Consequently, we have a $15 million dollar deficit on this campus to address.

Again, that is $15M for this current fiscal year, the year we are halfway through. Each week, as Payroll cuts the paychecks for all the employees on campus, the expenses keep adding up. We cannot simply keep working until the money runs dry, and then go home. And we cannot simply let others make the hard choices for us. They are ours to make. It is our responsibility.

Most of the expense of running the University is in people - approximately 80%. And people are employed in programs - whether in academic departments, student services, athletics, or physical plant. To reduce our expenses, therefore, we must look to our programs and, guided by mission and such other critical considerations as regulatory, compliance or accreditation guidelines, and the enduring ethos of the UMass Amherst campus - we must look to our programs and decide what we can do differently, and what we can do without.

What the public and the legislature expect of us is that we commit ourselves to rigorous introspection that leads to concrete choices. By rigorous introspection, I mean the kind that we often find easy to avoid: a hard look at how we have invested our resources in relation to what students most need in order to complete their programs of study in a timely manner.

As the recent Lazare Report made very clear, one of the great assets of this institution is the quality of its faculty. You came here to build this University, you came in response to the aspirations of John Lederle, of Oswald Tippo, of Randolph Bromery, all of whom echoed the question William Clark once asked of Goodell: "Will you come and help?" You've answered that question, over and over, year after year, affirming your commitment to make this the kind of university in which excellence is expected. Your research, your scholarship, your teaching - brick by brick, you have built the intellectual infrastructure of this community - and for that accomplishment we and the Commonwealth are deeply grateful.

As faculty members we are also very good at reflecting on the value, on the meaning, and on the uniqueness of our courses. That's how we have been trained. What tends to happen, though, is that our reflection on the value of our courses is framed in terms of our disciplinary specialties. Without abandoning that sensibility, what we need to do now is bring that sensibility into balance with a more utilitarian set of questions: How many students are enrolled in the course? Is it required for a degree program? Could it be taught less frequently, while still meeting our obligations to the students who are here now? Were I designing it anew - knowing what I now know about the students, their preparation, the discipline itself in its own evolution, and about the world into which our students emerge when they finally graduate - would I design the course the way it is currently presented?

These are the kinds of questions that, in the best of times, we may have the luxury to ignore. These are not the best of times. We must resist the lure of always referencing as a baseline the point in our pasts at which we had the greatest number of positions - from which we are now deficient - to attribute validity to that assumption means there was more intentionality and purpose guiding the decision for growth than the actual history of the period of the 50s, 60s and 70s will bear witness. We must accept the fact that we have less and that getting more is unlikely in the foreseeable future; therefore, we must plan accordingly. We are in these times and in this place and have the responsibility to secure for our students access to a university of excellence in and for the Commonwealth.

What will be the outcome of the questions we ask? Inevitably, we will make choices, given our limited resources, about optimal investments in the vitality of the academic enterprise. In some cases, we may decide to cancel sections of courses that are not meeting appropriate needs. In other cases, we may choose not to accept any more students into a major. And in still others, we may have to hire faculty who have obligations to teach in more than one department.

These options in academic affairs are an example of a larger set of decisions in every area of the campus. I have asked the deputy and vice chancellor in charge of each executive area to develop a scenarios for a 5% reduction in that area. Those scenarios were recently completed, and now we are reviewing them carefully for their systemic implications. There is much we do not yet know. But we do know there will be program reductions across the university - in athletics programs, in academic programs, and in academic support programs.

We also know what our preliminary review has identified. As was referenced in a campus-wide e-mail on Tuesday, we anticipate eliminating approximately 100 positions through attrition and approximately 60 positions through lay-offs. We do not yet have all the information we need to be definitive about which positions or which programs will be affected. No action on any decision will be taken until after the first of the year, at the earliest.

I can tell you that we have identified 7 positions that will go unfilled, as a cost-savings and/or reorganization measure. Those positions are:

• Vice Chancellor for University Advancement
• Assistant Vice Chancellor for University Advancement and Executive Director of Development
• Associate Chancellor for Campus Planning and Space Management
• Assistant Chancellor of University Advancement and Special Projects
• Assistant Vice Chancellor for Strategic Technology Alliances
• Vice Provost for Instructional Technology
• Director of Advancement Systems

I mention these positions because I believe it is important to signal that as all parts of the campus will be scrutinized for possible changes and reductions, so will the administration undergo a similar review. I should mention, too, that recently we have had clarified the applicability of the Non-Unit Personnel Policy to include those holding the title of Dean, Provost (Assistant, Associate, Vice), Deputy/Vice Chancellor (or Assistant, Associate), or the like. The clarification is that "[u]nder Section I(B) of the policy, such individuals serve at the pleasure of the Board of Trustees acting through the Chancellor." The signal here is clear, too. The University must continue to have the flexibilities that encourage appropriate change, vitality, and innovation in and for the Commonwealth while demonstrating its accountability to the Commonwealth and by striving to set the example from its leadership and throughout the institution.

What these strategies demonstrate, too, is that there is no single fix to this situation. Besides reducing expenditures, we are also taking steps to increase revenues. On Monday, as you know, the Board of Trustees approved a fee increase system-wide. On our campus, undergraduates will pay $495 more in mandatory fees this spring. That increase comes in response to our immediate need for revenue, but it has been a long time coming: the University has not increased mandatory fees for five years - even at the rate of inflation. And while we are most mindful of the effects of this added mid-year expense on our students and their families, we also know that the cost of tuition and fees for 2001-2002 (with the mid-year increase factored in) is $5,707 - or just 3.5% higher than it was in 1995-1996, when the charge was $5,514.

Clearly, had fees increased even at the rate of inflation over the past five years, those fees would be significantly higher than the new fee students will pay this spring. A quick calculation will make clear that the fee increase only addresses about 40% of our budget deficit. Nevertheless, it may be difficult for some students to pay. Financial aid for each student will be recalculated and appropriate adjustments will be made. We will continue to do our best to insure that no student's program of study is disrupted by the fee increase. Before leaving this discussion of the figures themselves (and remembering the earlier referenced figures of approximately 160 positions through attrition and layoffs), let me note that - just for a measure of approximate calculation - 100 positions (some reasonable distribution) calibrates at about $5 million dollars.

These are the outlines of the changes underway. It is, no doubt, the most difficult period the campus has faced in many years. This will be a painful time. But what will emerge from the task before us is a strong University, better positioned to meet the economic uncertainty of the foreseeable future. In the end, we will be better for having asked ourselves questions about who we are, and what and how we want to do what we do well.

As I mentioned previously, you came here to build this University, and year after year you have affirmed and reaffirmed your commitment to make this the kind of university in which striving for and achieving excellence has become for you the expected, the routine. What you have built is at once extraordinary and an extraordinary model of responding to the needs of the nation, the Commonwealth, and those served by this public land grant research university.

And I want to assure you today that your work is not about to be undone. The intellectual infrastructure you have built will not be dismantled. Rather, it must undergird our next steps. What will emerge from the task before us is a stronger University for this time. It will be stronger because every unit, department, and program will have asked itself central questions: what do we do well? What could we do differently? And what might we no longer need to do? There will be no area of the University that does not reflect on questions such as these and be expected to come up with answers.

All the executive officers are engaging their areas in planning and discussions to accomplish the changes we will need to undertake. The mechanisms for these discussions and advice vary with the executive area, in addition to the more formal governance structures that intersect all the areas.

President William Clark's question to Professor Henry Goodell in the 1880's is relevant today: Will you come and help? What we have before us is an opportunity to remake ourselves, if we rise to what these times demand. We might not have chosen to engage in this task now, but now is here, and now is the time for doing. Making choices that may negatively affect people's lives in a very immediate way is nothing anyone savors. And yet there may be a reason why it is happening at this time-because we, and I mean the very particular people who are here on this campus now - the students, the faculty, the staff, the administration - because we are the ones who can do it right.

We need to do it right, because we are doing it for our children, and our grandchildren and the children and grandchildren of the Commonwealth. Ultimately this university is theirs. Most of our students come from and remain in the Commonwealth as productive contributors to the civic, societal, and economic, development of the Commonwealth. The work we do to maintain the excellence and value of a UMass education, we do for them.

In talking about the value that our University represents to the Commonwealth, I am not unaware that some members of the UMass family are stunned and aggrieved by the actions of the legislature toward the University. We also understand that from time to time there will be difficult fiscal periods in the Commonwealth's history. During these times, we will continue to strive to manage prudently, maintain public confidence, and preserve access to educational excellence. We will also continue to make the case that the University is a wise investment for the Commonwealth, for all the reasons I have mentioned earlier in my remarks today and on other occasions.

We have appreciated the State's responsiveness to requests for critical investments in the University - whether through direct allocations or through matching programs or through capital allocations. I remain confident and eager to resume this collaborative investment effort as quickly as possible, in whatever innovative ways may present themselves. Meanwhile, I also believe it is our responsibility to signal to the State that severe and sustained cuts to the University jeopardize its own investment and weaken the longer-term prognosis for the Commonwealth. It is my hope that together - the University with the State - we will be vigilant in striving to manage prudently, in positioning the University to be strong, resilient, and responsive when again there is a restored and growing University budget, and that we will be vigilant in protecting the State's investment in its future health.

I have made living values and human enablement a special theme of my term as Chancellor. On the surface, such concerns may seem contradictory or disingenuous at a time when we also must speak of budget and program cuts and lay-offs. But I believe we can make the decisions we must make and do what we need to do, in a way that respects our values, that speaks to our care for each other.

For people who will be layed-off, that may mean job counseling and support in ways we can provide it. Every bridge we can help build, from here to the next job, we will help build. When we speak of lay-offs and difficult choices, our commitment to "living values" has not ended; this is the time when our commitments to each other, and to the institution, are made all the more urgen - all the more visible.

Let me speak to discussions regarding an early retirement incentive program I hear are underway in the State House even as we are speaking here today. We would strongly support a bill for a comprehensive early retirement incentive program. Such a program offers a significant way to influence employee turnover and provide potential for restructuring in addition to achieving necessary cost savings. Currently, the University has the least flexibility to reduce personnel costs in dealing with a large proportion of its employees - tenured faculty who make up an even larger proportion of payroll expenditures. Without the tool to influence all employees that such a retirement incentive program offers, a disproportionate reduction in other employee categories would have an even more unfortunate impact on the most economically vulnerable portion of the workforce and in turn the local communities. For UMass Amherst, an early retirement incentive program could be a means of mitigating some of the pain of layoffs.

We can speak in euphemisms to soften the words, but we have to face this situation squarely. There is nothing gentle about the impact of what we are undertaking: we have a $15 million dollar deficit in the current fiscal year; some programs will end; some programs will change; some jobs will be lost; many faculty vacancies will not be filled. But we can do what we must do with care; we can do it with the best of our integrity; we can do it with the best of our values.

We can do it right.

And I know we will.

Thank you for your attention.