Running the UT Numbers

Unless you're the football coach, budgetary times are dire

Running the UT Numbers

Although Austin has grown significantly in recent years, the state of Texas remains the city's biggest single employer, and with roughly 14,000 employees, the University of Texas at Aus­tin tops the list as a job provider. In the current economic and legislative climate, UT now faces several years for which the most optimistic financial predictions indicate flat-lining revenues. As a result, some employees, including untenured lecturers responsible for much of the teaching of undergraduates, are concerned that strategic reforms that include big-name hires and pet projects will result in budget-driven layoffs and curriculum cuts. In recent days, the local headline news has featured bursting revenues for athletics and a massive pay raise for the football coach – but times are not so rosy on the rest of the Forty-plus Acres.

UT Austin's central administration is based in the Main Building – better known to staff, students, and city residents as the Tower. That's where vice president and Chief Finan­cial Officer Kevin Hegarty oversees the three basic components of the $2.14 billion operating budget: the academic core (covering staff, scholarships, maintenance and operations, capital improvements, and debt service), academic enhancement (research and dedicated fund projects), and self-supporting and quasi-independent entities like UT Athletics and the Lady Bird Johnson Wildflower Center. He explained, "We're a people-dominated business – 67 percent [of the academic core] goes on salaries and benefit costs." That means that, when the budget gets tight, it's people who suffer. Hegarty's been responsible for delivering the bad news, and it's not just the headline numbers: Last month, he had to lay off 25 staff members at Information Technology Services, and he's far from the only manager charged with the task of cutting costs through cutting staff. Even the well-financed Red McCombs School of Busi­ness has had to lay off 16 staff members and leave unfilled another eight positions. Hegarty said, "I keep telling everyone, if this gets easy, it's time to go – because those are heartbeats behind those numbers."

Running the UT Numbers

It's the academic core that's causing Hegarty and the wider university community the greatest concern. With endowments shrinking and state general revenue stalling, the prediction is for a near-static budget for the next five academic years. However, that doesn't mean costs won't rise, so on Dec. 1, the Tuition Policy Advisory Committee, a panel of staff and students, made the unpopular recommendation to UT Austin President Bill Powers of a 3.95% per year increase in tuition fees in the 2010-2011 and 2011-2012 academic years. Combined with a new $65 per semester fee to pay for the new Student Activity Center, that would increase the cost per student per semester by roughly 10% by 2012, to an average of $4,462 for grad students and $4,895 for undergrads.

While parents and students are likely to shudder at a price hike for higher education while the wider economy is still in crisis, the proposed increase would only hold the budget steady. Without it, the university would have to cut $31.1 million from current spending over the next two academic years. To fund the university's critical priorities, the Tuition Policy Advisory Committee estimated, would take a tuition hike of 18% a year for the next two years. With no other cash available, the next option is cutting costs. And since salaries and benefits account for two-thirds of the academic core budget, that will almost inevitably mean staff cuts.

Hiring ... and Firing

The threat of wider and deeper layoffs is serious enough that recently the Travis County delegation of the state House of Representatives met with Powers, to receive from him what Rep. Mark Strama, D-Austin, called "an understanding of what kind of cuts they were proposing, and for what purpose. In essence, what we got was that they were trying to shore up their finances in anticipation of pretty lean times ahead and in anticipation of an increasingly competitive environment to retain faculty." While many universities are in far worse financial shape than UT – the University of California system, under former UT System Chan­cellor Mark Yudof, has introduced furloughs and a hiring freeze to deal with an expected $813 million budget shortfall – what may seem surprising is that in this financial context, Powers is looking to hire new staff. In his Sept. 16 State of the University Address, Powers committed to hiring 10 new faculty members this year (down from his previous, prebudget crisis target of 30) and finding $6 million for targeted salary raises. In their meeting, Strama said, "[Powers] said the research shows that a lot of those [schools] are shoring up their own finances for purposes of recruiting faculty."

Running the UT Numbers

Such commitments, Hegarty said, means finding salary savings elsewhere and "to do that, innately, it will impact people." The question now is, "Which people?" – and the tough choices are being left to the leadership of UT Austin's 18 schools and colleges. In governance terms, this is a continuation of an existing policy to give more authority and responsibility to what UT Faculty Council Executive Chair Janet Staiger called "middle-management: deans and department chairs." That was a key part of the recommendations made by the Commission of 125, the public body designed to set a strategic direction for UT Austin. In 2004, the commissioners recommended to then-President Larry Faulkner that he end the existing system of running strategic departmental decisions through the dean, the department chair, and a budget council of tenured staff. Instead, they suggested more authority and autonomy be given to the individual deans and departmental chairs, making them both capable of and responsible for improving their departments. To create that new decision-making structure, they proposed that UT Austin hire "at least one world-class chair or center leader per year for the next two decades." Staiger said, "Unfortunately, from the general faculty's point of view, that position is more aligned with how businesses operate than with the much older tradition of university faculties having major voices in curricular and academic directions."

With roughly 600 members on campus, the Texas State Employees Union has been watching the staff changes closely. Union organizing coordinator Mike Gross explained that since much of the budget is grants and endowments tied to individual projects, the schools are targeting instead the discretionary budget or "soft money" that pays for lecturers and adjuncts. He said, "They want to redirect money to bring in prestige faculty. One of the explanations bubbling around the campuses is that the University of California system is shedding faculty, and we'd like to pick up some high-profile names." But the risk the university runs, he warned, is "reducing the capacity to do solid undergraduate teaching for Texans, in order to build the status as a prestige research university."

It could also produce some deceptive numbers, such as staff-to-student ratios. In the closely watched US News and World Report university rankings, part-time staff count for one-third of a full-time employee. But there's a qualitative difference between an adjunct lecturer who teaches one specialist class to 20 seniors and a researcher who leaves the contact hours and grading for a class of 100 to his harried graduate teaching assistants.

Running the UT Numbers

Only 49% of UT's faculty members are tenured, and it's the rest, including lecturers – hired on a year-to-year contractual basis – who are worried about not having their contracts renewed. Mark Garrison, a lecturer in Italian in the College of Liberal Arts, said: "I seriously expect to lose my job. I've been told I may have it, I may not. Other lecturers have been told, 'You will lose your job in the fall,' and others yet have been told, 'You'll have it in the fall, but don't count on it in 2011.'"

Bodies for Buildings

That's quite a reversal, since only a year and a half ago, the College of Liberal Arts committed to a new hiring plan of 10 additional faculty members a year. The college launched an aggressive recruitment campaign and within a year had a net gain of 28 lecturers, but in June, Associ­ate Dean Richard Flores said: "We were told we were facing a flat budget. ... That put us in deficit right away." In total, the expectation is a $10 million shortfall for the next five years. Now the College of Liberal Arts is in a hiring freeze and is reducing graduate enrollment, meaning fewer students but with better odds of receiving a research or teaching assistant post. Those cuts in hires meant raised eyebrows over the decision to carry on with the construction of a new $100 million building on the East Mall, to be funded in part from the soft-money budget. The logic for continuing, Flores said, "is that we have no space, and looking four or five years from now, we'll have no place for new faculty." The administration position is that deferring construction will only mean higher long-term costs and won't solve the space crunch. Garri­son remains unconvinced. He said, "The message being sent is that the new building is more important than people who have worked here for decades, or than that we keep a smaller class size."

Another major staff concern is that cuts appear to be driving curriculum decisions, rather than considering course changes that could simultaneously reduce costs. That flies in the face of long university practice as well as another key recommendation from the Commission of 125, that "the creation of a core curriculum is the province of the faculty." According to Garrison, the College of Liberal Arts "issued an edict that we're going to cut the language requirement in half," because there would be fewer lecturers due to staff layoffs. The word came down in midsummer, when most of the language staff was away from campus, and when they returned they sent Dean Randy Diehl a strong message of opposition. The French and Italian faculty finally approved a compromise, with the language requirement stuffed into three semesters instead of four, but Garrison said the decision "was foisted upon us" as a financial necessity. He called the new structure "a dumbing down, a degradation of language teaching," while the threats of further cuts distract faculty from their core teaching responsibilities. He added, "We're having discussions about stuff we shouldn't be talking about, like the way the university channels money."

“If this gets easy, it’s time to go – because those are heartbeats 
behind those numbers.” 
– Chief Financial Officer 
Kevin Hegarty
“If this gets easy, it’s time to go – because those are heartbeats behind those numbers.” – Chief Financial Officer Kevin Hegarty (Photo by John Anderson)

The decisions and the universitywide budget will not be finalized until next spring or summer, and the discussions between deans and their staffs are far from concluded. There are also questions about whether the UT System administration, which oversees the system's nine universities and six health institutions, is bearing its fair share of overall cuts. Those questions became sharp public criticism when the system's board of regents held a two-day meeting Dec. 9-10 in Austin, including an overnight retreat at the Vintage Villas Hotel and Conference Center – although there were hotel rooms handily available at the recently completed AT&T Executive Education and Conference Center on the UT campus. High on the regents' agenda: approving an extra $2 million a year for UT football coach Mack Brown, so that his annual salary now exceeds $5 million a year, making him (for the moment) the highest-paid college football coach in the country.

As a "self-supporting" entity, the football program is responsible for funding its discrete budget. When questioned about budgetary priorities, UT officials have traditionally responded that football helps underwrite all nonrevenue sports and that, since it pulls in $87.6 million a year, the Longhorns now outearn every other university program in the country by at least $20 million. This week, the faculty council fired back that, whatever the supposed financial justification, "a permanent raise of $2 million (a sum greater than the entire career earnings of a typical university employee) offered to any member of the university community is unseemly and inappropriate."

CFO Hegarty suggested that while some efficiencies can still be found, such as recentralizing tasks like accounting or getting lecturers to cancel courses that have only a handful of registrants, he's worried about "the big myth" of university funding having previously been a bottomless treasure trove. If that were true, he says, then UT wouldn't have pending several years' worth of deferred maintenance. He said: "We're not going to pay for education through savings. If we do, we will begin to hurt the very thing that we're trying to fix."

For the Texas State Employees Union's Gross, the real question surrounds the ever-falling portion of university funds that are provided by the state. He said: "Within 15 years, it was of the order of 40 percent [of university income]. Now it's under 20 percent. So to some extent, the state Legislature is telling the universities, 'You're on your own.'" That's part of why colleges are being forced to balance staff retention against overdue construction, but Gross argues that they're making the wrong trade-off. He said, "There are departments that could certainly use a new building – but is that not something you could put off for a couple of years, rather than cutting the basic capacity of the institution to provide education?"

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