September 26, 2003 Feature
Compensation
at Top of President’s Budget Request to Regents
President Hall presented Utah State University's budget priorities
to members of the Board of Regents in Salt Lake City on Sept.11.
The president's No. 1 priority is an increase in employee compensation.
A copy of President Hall's complete budget presentation to
the Regents follows.
President Hall's Budget Request to the
Board of Regents
(Sept. 11, 2003)
INTRODUCTION
Utah State University has an important and distinct role in
Utah's system of higher education. As our new mission statement
also makes clear, Utah State aspires to be among the nation's
best land-grant and space-grant research universities. Our new
mission statement — approved by the Regents and enthusiastically
supported by every constituency — challenges us to become
what the Fraser Bullock report calls "best in class,"
or, in other words, to be the best Research I university among
our peers.
That report, officially called the Employers' Education
Coalition Report, recommends that universities be funded
by means consistent with their roles and missions, and it distinguishes
Research I institutions as significantly, and importantly, different
than other institutions in Utah. We are grouped with the University
of Utah as the state's Research I institutions because our missions
are critically different than the state’s other institutions
of higher education, and our economic return-on-investment is
critically different than those institutions. Simply put, the
state’s Research I universities annually bring hundreds
of millions of dollars into the state.
Preliminary accounting figures place Utah State University's
research expenditures for the year just completed at about $141
million; research expenditures last year were $121 million.
This $20 million increase came during a time of significant
economic downturn in the state and the nation. Using an economic
impact multiplier of 5 to 1 (the standard multiplier used by
NASULGC), this means the research conducted at Utah State University
had a $700 million impact on the economy of Utah. Utah State
University is a powerful force in Utah's economy. Our national
stature in research is such that Utah State ranks 15th in research
expenditures among the approximately 70 land grant universities
that do not have a medical school (based on the latest National
Science Foundation data). This puts us ahead of such institutions
as Oklahoma State University, Kansas State University, Washington
State University and New Mexico State University.
In their acclaimed book The Rise of American Research Universities,
authors Hugh Davis Graham and Nancy Diamond make a point of
differentiating actual performance of research universities
from their claims about how well they perform. In other words,
they do not let the major "horsepower" universities
rest on past laurels. Graham and Diamond specifically note Utah
State University’s track record as one of the largest
recipients of Department of Defense research and development
dollars, and they go on to list per capita measures of research
productivity that show Utah State among the nation’s top
research performers.
These millions of dollars we receive from federal research
grants — along with providing economic security for thousands
of Utah citizens — also help us train students in specialized
and highly technical fields at the graduate level. So we are
bringing in millions of dollars right now to the state, and
we are training our future business and industry leaders who
will keep those dollars coming in down the road.
The Bullock report recommended specifically that Regents not
try to level the economic playing field, and that they instead
should differentiate university and college roles with a comprehensive
strategy, "with funding tied to the strategy." Research
I universities need to act differently than the other institutions,
the report states, and they should be funded differently.
Utah State University was the first university in the state
to develop a mission statement that is explicit in role definition
and that supports the vision of the Regents for our place in
the state’s system of higher education.
"The mission of Utah State University is to be one
of the nation's premier student-centered land-grant and space-grant
universities by fostering the principle that academics come
first, by cultivating diversity of thought and culture, and
by serving the public through learning, discovery, and engagement."
This mission statement places academic enterprise and support
for our students at the center of every effort. It defines our
quest to be one of the nation's premier space- and land-grant
universities, and it restates our continued commitment to teaching,
research and service. We followed our mission statement with
a role statement and 10 well-defined university goals that play
a significant role in the decision making process within the
university. Key decisions are made based upon meeting these
university goals.
 In
keeping with Utah State University's leadership role among the
state's institutions, we are looking strategically to the future
and have developed Compact Plans to achieve the university’s
goals as well as fulfill our role as one of the state's two
Research I institutions. New budget principles and a selective
investment program have been developed as part of a new internal
budgeting process that will provide funds according to the university’s
priorities, as outlined by the university's goals. This process
will strengthen the university's stature as a Research I institution
and keep us fiscally accountable to our mission.
But we can do only so much internally; support from the Regents
and funding from the Legislature are essential to the increased
success of Utah State University as one of the nation’s
leading land grant research universities.
The budget we present to you today is aligned closely with
our mission, our role and our 10 university goals.
A. COMPENSATION
Utah State University's top budget priority this year is employee
compensation. Utah State employees have not received salary
increases for the past two years, meaning salaries have remained
constant for the third year in a row. Unfortunately, we already
were significantly behind our peers before the salary freeze.
Our employees remain behind their peers in average salaries
and, in fact, with the significant increases in premiums for
medical and dental insurance, the result is a net loss in disposable
income.
We are not treading water; we are sinking here. Our faculty
are 17 percent below their colleagues at peer institutions listed
by Regents; and they are 25 percent behind Carnegie Doctoral/
Research Extensive University colleagues in terms of salary.
As we attempt to build a first-class faculty, we find ourselves
often losing our first choice candidates to both industry and
peer institutions because of salary issues.
We have had a good deal of success recruiting faculty and bringing
them here, but the potential to lose them to institutions that
can offer them a better deal is still high. Last year alone
we lost nearly 20 faculty members to other institutions, in
large part because of salary gaps. And we have lost approximately
80 faculty members in the last three years. We initiated a retention
account in an attempt to address this issue, and we have been
able to negotiate and keep approximately 15 people in the last
year and a half who were looking to move. But we need to address
this issue at its root, and not try to play salary one-upsmanship
with our best faculty and staff.
We have to be able to attract and retain high-quality faculty
and staff because these salary problems are sabotaging two of
our greatest needs — reducing the student-to-faculty ratio
that is the highest in the state and much higher than peer institutions,
and reducing our equally alarming student-to-staff rate. These
are not just statistics; those troubling numbers translate directly
into how much personal attention we give each of our students:
in the classroom, in labs, in counseling services, in advising
— from admissions, to financial aid lines, to every level
of customer service.
Our mission statement defines us as student-centered.
We chose those words carefully, and we have worked hard to ensure
that our institution's culture is saturated by this attitude.
The heart of this attitude and its corresponding high-level
of service to students is our faculty and staff. It is only
fair that we reward their hard work and their professional commitment
to our students. Our employees more than deserve a fair increase
in employee compensation. A consultant's study also revealed
salary discrepancies between male and female university employees
with like job classifications. We want to remediate these salary
discrepancies as soon as possible too.
A recent story in The Chronicle of Higher Education
reported that despite fears about an economic downturn, most
states recognized the importance of this issue and raised faculty
pay at an average of 3 percent in 2002-3. The story also noted
that public universities are most at risk of losing high-quality
professors.
This compensation issue is by far our number one priority,
and we ask for ongoing funds of $4.2 million for salary increases.
This funding request does not make up for recent years with
no increases; it simply provides what we need this year based
on the Higher Education Price Index.
In addition, we need to address the rising costs of medical
and dental insurance. Costs have been rising 15 percent a year,
and that trend is expected to continue. Utah State's self-funded
program is as efficient as any program in the state, and it
is right on the targets set by the Regents' new index. We are
meeting our efficiency goals, but our employees still are heading
backward unless we receive funds to address rising costs that
are beyond our control.
Keep in mind that Utah State University employees bit the bullet
this year when we increased the employee out-of-pocket premiums
significantly. So please understand clearly that their total
compensation package is eroding, not evolving.
We ask for ongoing funds of $2.2 million for medical and dental
insurance.
B. ACCESS (UNFUNDED GROWTH)
Utah State University has a plan in place that predicts growth
for the university. But if we want to grow and maintain our
quality as a Research I institution, then we need help from
the state. We want to grow in a way that will not undermine
quality. We've faced too many years of unfunded growth to the
point that we had to reduce growth because there simply was
no money to support it.
That funding dilemma gave us record student-to-faculty ratios,
the largest class sizes in the state, and an unenviable six-year
graduation rate of 57 percent. Our students wisely stepped in
with Second Tier tuition dollars to pay for new faculty, and
that helped cut our student-to-faculty ratio from a record 25-1
down to 22-1 now. But we need an infusion of funding –
not from Second Tier tuition, and not from a per-student growth
model. We ask for $3.3 million to fund educational quality.
The best service we can offer the state of Utah is to be "better
and incrementally bigger," not "bigger and
incrementally better." Underfunded growth has interfered
with our mission as a research university as research programs
and graduate programs were compromised as they were tapped to
fund other university enterprises.
C. UNFUNDED OPERATING BUDGETS
Our operating budgets across campus are critically short of
funds. We have received no state funds to meet inflationary
increases in the past 18 years, meaning we have lost more than
half of the purchasing power of our dollar, according to the
Higher Education Price Index. We continue to lose ground. It
is hurting us, and it is hurting our students. Some departments
now have no E&G operating funds, and basic day-to-day operating
funds are being funded by unfilled faculty position dollars
or Research facilities and administration overhead money that
should be used for research program enhancement.
Service contracts alone on equipment can cost some departments
$30-40,000 a year. This money comes from their operating budget,
and operating funds are critical to Research Institutions especially.
A research university is defined ultimately by its quality,
and quality suffers when core, day-to-day maintenance is shortchanged.
This quality factor impacts faculty productivity and recruitment,
graduate student recruitment and retention, undergraduate research
opportunities, and all of the fundamental practices and routines
that have placed us among the top research institutions in the
country.
There is no free lunch and the problem will not go away. Our
student-faculty ratio crept up because money for new faculty
lines was used to pay basic day-to-day operating budgets. To
pay the bills, departments were forced to cannibalize faculty
resources.
We ask for $1 million of ongoing money for unfunded operating
budgets.
D. STANDARD MANDATED COSTS
1. FUEL AND POWER
If we could put a red flag on an issue, this would be it,
because our fuel and power deficit amounts to a yearly budget
cut for us right now. We are in a hole that seems to be getting
deeper, and we want to address this issue now and put it behind
us.
We have two important requests for fuel and power funding.
The first is a request for our actual anticipated fuel and
power costs to cover our needs for the coming year. Funding
this completely will help avoid further deficits in the base
funding for fuel and power. Of equal importance, however,
is a one-time supplemental request to compensate for lack
of full funding for increased fuel and energy costs over the
last three years, including no funding for 2002-2003.
Fulfilling this request will erase our deficit balance and
catch us up to where we should be. The only way to get out
of this mess is to pay our bills. We are getting to the point
where it's going to be extremely difficult to catch up in
the future without a huge outlay of money. If Utah State and
the University of Utah remain unfunded, by next year we could
see a deficit upwards of $30 million. That seems an incomprehensible
amount to be behind in the checking account, and we would
like to stop the bleeding right now. We ask for an increase
in our base amount of $1,921,200 in ongoing funds, with an
additional $5,139,100 one-time supplemental funding to bring
us up to date.
2. FACILITIES OPERATIONS AND MAINTENANCE
Two major new buildings are finished, but neither received
full O&M funding from the 2003 Legislature. The Engineering
Classroom building and the Edith Bowen Elementary School (Phase
1) are on-line and in-use during the fall 2003 semester, and
we request funding to cover the shortfall in O&M funds.
Thank you for the buildings; we certainly are pleased to have
them up and running. But if we don't maintain these buildings
— any building for that matter — the new stuff
becomes old stuff fast. The combined shortfall for these two
buildings is $466,400. The remainder of the request comes
from two small building projects on the Logan campus that
require $24,200 in additional O&M funds. The Brigham City
Continuing Education facility continues to experience growth
in the demand for education services in the region and requires
O&M funds of $69,200.
3. SOLID WASTE
Utah State Facilities Operations collects its own solid waste
for delivery to Logan City's landfill. The cost of dumping
fees has exceeded the available solid waste budget for the
past five years. We need an ongoing increase of $29,500 to
cover the annual cost of landfill charges, and a one-time
supplemental amount of $183,400 to cover our current deficit.
4. SEVIS (Federal Mandate)
The Immigration and Naturalization Service has implemented
the Student and Exchange Visitor Information System (SEVIS)
to track foreign students for colleges and universities. We
ask for $86,200 to cover the costs associated with the implementation
of this federally mandated system.
E. POSSIBLE STATEWIDE INITIATIVES
1. SALARY EQUITY
As I noted above, a recently completed consultant's study
revealed salary discrepancies between male and female university
employees with like job classifications. We want to remediate
these salary discrepancies as soon as possible. The amount
required to do that is $1.8 million. We request $360,000 to
phase in a solution to this problem.
2. STUDENT FINANCIAL AID
The steady increase in regular tuition and the necessary use
of Tier II tuition have created a greater need for financial
aid. This is true not only for students from lower income
households; it is also needed to attract the highest quality
students who are receiving scholarship offers from other universities
where more scholarship funding is available. (Amount to be
determined.)
3. LIBRARIES
Utah State's library system is seriously underfunded. As a
result, journal subscriptions are being significantly reduced.
To compound the problem, inflation in the cost of journals
and other publications is almost 10 percent a year. We have
cancelled over 300 journals already and we face having to
cut approximately 1,300 more if funds are not appropriated.
We ask for $1,150,000 of ongoing funds to update
4. ENGINEERING INITIATIVE
In order to meet the governor's goal of doubling the number
of engineering and computer science graduates by 2007, funding
for additional faculty, equipment, and laboratories is needed.
Promoting undergraduate programs in engineering and computer
science makes sense for both the economy of Utah and the success
of Utah State University. Engineers and computer scientists
— professionals with technical skills — provide
the expertise necessary for growth and success in all aspects
of industry, from construction to computer micro-chips.
While those who graduate from Utah State's undergraduate
engineering and computer science programs provide professional
expertise to staff industry, it is those who leave this university
with graduate degrees that provide the entrepreneurial energy
necessary to create industry, and this is where the largest
economic gain is to be found. The education of these graduate
level students is a major function of Utah State University
and fits in with our role as a Research I institution. It
is this research activity that provides the ideas these engineering
and
computer scientists will base their entrepreneurial activities
upon.
(Amount of funding to be determined.)
5. UTAH STATE UNIVERSITY/WEBER STATE NURSING PARTNERSHIP
The demand for nurses in Utah, and nationally, is at extremely
high levels. To meet this demand, the USU/WSU program must
be strengthened at the Utah State campus. Because of understaffing
and limited facilities, the program can accept fewer than
1 in 4 qualified students for the program. The addition of
one faculty would allow 10 additional students into the program
each year. We ask for $250,000 of ongoing funds to pay for
this action.
F. INSTITUTIONAL PRIORITIES
1. UTAH CLIMATE CENTER
The 2003 Legislature transferred responsibility of the Utah
Climate Center from the Department of Agriculture to Utah
State University, but no permanent funding has been allocated
for operation of the center. The 2003 Legislature appropriated
$120,000 in one-time funds; that amount is needed as permanent
funding.
2. CLASSROOM TECHNICAL SUPPORT
The use of technologically enhanced classrooms allows faculty
to teach in ways that are more stimulating and more successful,
in addition to being able to demonstrate concepts in ways
that were impossible before. To equip these classrooms, however,
requires substantial funds and the equipment requires significant
maintenance. We ask for $800,000 in ongoing funds to maintain
our existing equipment and to replace it as it ages.
3. EXTENSION PLANT PEST DIAGNOSTIC LABORATORY
This laboratory is critical to Utah and the Intermountain
Region as it provides assistance to agricultural producers
when confronted with insect problems. Both the federal government
through APHIS and the Utah Department of Agriculture and Food
have declared the importance of this lab in Agri-security/Homeland
Security issues, and APPHIS has funded the lab for a number
of important projects. In addition, this lab writes all the
phyto-sanitary documentation required for the export of Utah
agricultural products, a key component in the state’s
economy. We ask for $150,000 in ongoing funds.
4. COOPERATIVE EXTENSION BANKRUPTCY EDUCATION PROGRAM
(year 1 of 3)
The university's Cooperative Extension Program believes it
is imperative that a statewide bankruptcy education be initiated.
Utah has the highest number of bankruptcies per capita in
the nation. This request is a small investment to assist struggling
Utah families reach financial stability, and the program materials
are offered in both English and Spanish. We ask for $150,000
in ongoing funds.
5. GENOMICS AND BIOINFORMATICS PROGRAM
Academic efforts in life sciences are shifting toward large-scale,
multi disciplinary, collaborative research ventures. This
new program will position the university to be part of this
new movement and will capitalize on the foundation laid in
biological research by the university's Biotechnology Center.
The university has committed, through the Selective Investment
process, $120,000 of one-time funds and $300,000 in ongoing
funding for this program, beginning FY 2004. This commitment
by the university is, indeed, an investment. It will enable
this program to secure large federal research grants and to
attract major industrial partners, providing a significant
return on the internal investment and thereby contributing
to the Utah economy. This type of investment and program assists
the university to fulfill its role as a Research I institution
and provide economic stimulus, as discussed in the Fraser
Bullock report. Additional funding provided by the state to
expand this program will result in additional economic stimulus
for Utah.
A target area of research will be Homeland Security. The
federal government has set aside hundreds of millions of dollars
for research in this arena, ranging from transportation security
to agricultural and bio-terrorism. The expertise in agriculture,
genomics and biology at Utah State University could play a
significant role in this research and places this center in
excellent position to secure some of this federal funding.
The colleges of Agriculture, Science and Natural Resources
will also benefit from this center through the development
of new courses and additional faculty. We ask for $1 million
in ongoing funds for this important program.
6. MULTI DISCIPLINARY WATER INITIATIVE
The colleges of Agriculture, Engineering, Natural Resources,
and Science are in the early stages of forming a multi-disciplinary
water research, teaching, and extension program. The university
has already committed $67,000 in one-time funding and $160,000
in ongoing funds, beginning in 2004, to this program. Existing
programs at the university (Utah Botanical Center, Utah Climate
Center, Utah Water Research Laboratory, etc.), position these
colleges well to expand their expertise, resulting in statewide,
national and international impacts on water research, education
and use.
Water is Utah’s — and the nation's — most
critical resource and its availability varies widely each
season. The drought that Utah is currently experiencing emphasizes
this point. The economic impact of the drought is yet to be
determined, but will be significant. The establishment of
this multi-disciplinary water program would assist in the
mitigation of negative impacts that future droughts in the
state, nation or world might have on both the economy and
the lifestyle of the citizens. This would be accomplished
through education and research, fulfilling another aspect
of a Research I institution — the practical application
of successful research.
In addition to mitigating drought effects, this program could
investigate water security issues, another major Homeland
Security concern.
New funds applied to this program will support new faculty
and their associated start-up requirements, other equipment,
and technical assistance. These new faculty and the faculty
already on staff, as a result of the investment already made
by the university plus the additional state funding, will
be able to expand this program, thereby providing a significant
return on investment and contribution to the state’s
economy.
There are at present a number of lucrative federal funding
opportunities available to pursue, including a National Science
Foundation budget that has doubled and a Department of Interior
initiative to study the critical need of water resources to
the economies of the arid western states.
We ask for $1 million in ongoing funds to support this effort.
7. K-12 TEACHER PREPARATION
The elementary, secondary, and special education programs
at Utah State have experienced tremendous pressures the past
several years. Population data predict 10 percent growth in
high school classes in the next 15 years, and the Utah birth
rate has climbed 30 percent since 1990. These numbers mean
that Utah’s schools will see significant demands for
new teachers. In order to remediate these pressures and meet
the demand for public education teachers expected to occur
in the next decade, additional faculty are necessary (five
new full-time faculty lines, which would be matched by Utah
State University). The additional faculty would allow the
departments to shift current personnel assignments in ways
that would allow the university to better meet the needs of
Utah’s public school districts in both undergraduate
and graduate teacher preparation programs. We ask for $500,000
for this program.
Thank you, members of the Regents.
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