Wednesday, February 11, 2009

UGA President Testifies before Subcommittee

University of Georgia President Michael F. Adams
Testimony before the House Higher Education Appropriations Subcommittee
Tuesday, February 10, 2009
Georgia State Capitol

Thank you, Chairman Smith and the members of this committee for the opportunity to talk with you about the University of Georgia, the capital projects priorities, our goals and objectives and the budget struggle we share with you.

First, I want to thank Chairman Smith and the members of this committee for your support of the university system and the University of Georgia through the years. We have enjoyed strong support from you and for that we are grateful.

Our top capital project is the Special Collections Library. UGA has been entrusted with some of this state’s greatest historical treasures, and in our current library facility we are unable to display them as we should and incapable of caring for them in the manner that they deserve.

The proposed Special Collections Libraries building at UGA will house a vast array of materials including rare books, manuscripts, political papers, historic radio and television programs, and other original materials that illuminate history and culture. It will store these materials in the best possible environmental conditions to ensure their survival for future generations while also providing space for scholars and the public to view and use them.

At present,UGA provides only 70% of the library space specified by the Regents guidelines while peers provide up to 150%. This building will bring us to about 90%.

And in keeping with how we do most projects at UGA these days, this is a public-private partnership—the University will raise $15 million and the state will contribute $30 million. We have raised $13.2 million, placing us within two million dollars of our goal, and I think that is a good deal for the taxpayers to get such a great facility for two-thirds of the cost.

There is also a need for a Central Utility Plant for the Northwest Precinct of the campus, which will be a focus of development over the next 10 years. It will be the site of the Special Collections Library, the proposed new Terry College of Business complex and the proposed new facility for the College of Family and Consumer Sciences, as well as other academic facilities.

The Central Utility Plant—a $6 million project—will help answer the Governor’s challenge to reduce energy consumption on a unit basis by 15% over the next 12 years. By the year 2020, this project will realize $5.4 million in energy cost avoidance.

Both of these projects are fully ready to go as soon as the bonds are sold. We appreciate your support of these important capital projects, and we appreciate your service to this state.

I also want to express my appreciation for your continuing support of the MCG/UGA Medical Partnership. In the past two years Georgia dropped from 37th to 40th in the nation in physician-to-population ratios. However, we are now on track to serve the first class of students in fall of 2010, and we are ready for the medical accrediting team that will be visiting in April. This has only been possible with support from this body. The $7.8 million in the current budget will help us achieve increased medical care for a state in need of doctors.

These are difficult times for all of us in state government; difficult times call for leadership, and all of us have been placed in important leadership positions. We at UGA accept our responsibility to you and to the people of this state to work with you through these difficult times. I have told our campus that we will not whine; we will not point fingers; we will not place blame. The University of Georgia will strive to maintain the quality of the education we provide, the quality of the research we conduct and the quality of the service we provide to the people of this state. That is our mission, and we are committed to it.

But I need to tell you that it is harder and harder for us to do this. We have fewer people and fewer resources than we need, but I realize every state entity can say that these days.

We will continue to cooperate with you and to work to provide an excellent education to our students. I can assure you that we have felt the pain of the economic downtown and the resulting budget cuts—our faculty, students and staff have all been impacted.

To give you some idea of that impact, UGA is currently operating under a 9% budget reduction scenario, which means that we will lose more than $36 million in state support for our Resident Instruction budget. That hurts in a variety of ways.

As of the end of January, we have 153 vacant faculty positions and 173 vacant staff positions. We have eliminated 47 graduate assistants and 52 student workers. This has a direct impact on our ability to teach our students and keep them on track to graduation.

In the “B” budget, we will be losing more than $8 million, affecting the Agricultural Experiment Stations, the Cooperative Extension Service, the Veterinary Teaching Hospital and the Poultry Diagnostic and Research Center.

UGA students this semester paid an additional $100 fee and student costs are likely to go up given that Georgia ranks near the bottom in the Southeast for tuition rates.

While we should not be the most expensive higher education option, we should also not rank so low that flagships in Alabama and South Carolina and many other states have significantly higher tuition rates than we. I will say more about tuition in a minute.

The budget reductions have already been felt, and felt quite severely, by our employees. In addition to the annual increase in their health insurance premiums, they also participated directly in the budget cut when the Regents reduced the employer contribution to the premium from 75 percent to 70 percent. The savings to the state were used to cover part of the System’s budget cut.

And while I agree with this action, I just want to make sure that those of you who have college and university employees in your district understand that they are participating in the budget cuts, and feeling the pain of them, each time they are paid because their paychecks are smaller.

Consider a UGA employee at the lowest end of our wage scale. Over the past several years, we have made a concerted effort to raise those salaries from about $13,000 to $21,000 this year. But with the change in premium, the $1,000 raise we had designated for those workers this year was wiped out.

If they were on the PPO family plan, which is the most popular plan, their annual health insurance premium went up $1,061—an increase of almost 30% in one year—more than consuming their raise. In fact, the break-even point at which the salary increase covered the health insurance increase is $42,400.

Again, we understand why these reductions have to be made. We are working hard to minimize the impact of these cuts on our classrooms, labs, and service projects. We feel it is our responsibility to you and to the state to continue to offer the highest possible service even as our resources have shrunk significantly.

Such effort places strain on everyone at UGA, from the custodians to the faculty and yes to top administrators as everyone absorbs more duties and works longer hours to cover unmet needs. And I believe this is what we should do. I just want this body to know that we are indeed sharing in the state’s budget reductions and that these are having a very direct impact on the UGA family. Institutionally and individually, we feel the pain of the economic downturn.

We are committed to cooperating with the General Assembly and the Governor to work through this downturn. But please don’t take UGA’s careful and effective management of this crisis as reason to believe we have not been hurt or that we can handle additional cuts without serious damage to the core mission of the institution.

I also want you to know that I believe we at UGA should do everything we can to produce ourselves out of the budget crisis, as I told the campus a few weeks ago.

There are five areas of revenue generation where we will focus our efforts:

1) Fundraising. Even following the success of the Archway to Excellence campaign, UGA’s colleges, schools and units must reach out to their constituencies for the level of private support, which characterizes great public universities. Private support provides a level of flexibility that helps the institution address funding needs as they arise.

2) Research grants. The faculty must become even more aggressive in pursuing federal, corporate and foundation grants for research. We have done very well the last five years, and we have strengths in many of the areas that are receiving funding. We should be competitive to receive more research grants.

3) Tuition. As I mentioned earlier, UGA’s tuition needs to be in the mid-range of the SREB flagships; it is currently 15th out of 16. The University of Georgia is a top-20 public university, but tuition here is $300 below Tennessee, $2,700 below South Carolina and $1,500 below Kentucky. In recent months, the governor of Florida and that state’s higher education leadership have approved tuition increases that will float to the national norm. I don’t want to be behind Florida in anything.

4) The university’s auxiliary units—parking, dining, housing, athletics—all depend upon the academic mission of the university for their very existence. I will propose that we look at ways to increase the overhead that we currently recover from these auxiliaries for the purpose of supporting the core academic mission of the institution.

5) Credit hour production. We simply must produce more credit hours. Ideally, we would enroll more students, but our enrollment is capped. Ideally, the formula would more accurately reflect current conditions on campus, but it lags two years behind. Ideally, a credit hour at a research university would be worth more than a credit hour at a regional university or two-year school, but the formula treats them as equals. Our only option is to teach more classes and encourage students to take more hours.

I believe these are proactive steps we at UGA can take to contribute to the state’s efforts to work its way out of the current economic decline.

I also want you to know that even in these tight times, UGA continues to excel and continues to make its mark nationally and internationally. For the ninth consecutive year, U.S. News & World Report has ranked UGA among the nation’s very best public research universities. UGA was the only public university to have two students in the 2008 class of Rhodes Scholars. In addition, we had students receive Truman, Marshall and Goldwater scholarships. Only three other schools in the country had students win all of those honors—Columbia, Stanford and Yale. The Center for Tropical and Emerging Diseases received the largest medical grant—and the third-largest grant overall—in UGA history. Two UGA faculty recently were among only 68 from across the country honored at the White House with the Presidential Early Career Award for Scientists and Engineers. These are just a few examples of the many outstanding accomplishments continuing to be achieved by our students and faculty.

In summary, we have felt real pain. We are willing to do our part. We are looking very hard at both sides of our ledger. But we continue to see high achievement on the part of our students, faculty and staff. And we will be stronger coming out of this difficult time.

Thank you for your attention.

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