The State of the University
George M. Dennison
The University of Montana
23 August 1993
Good morning and welcome to the Fall Semester of our Centennial Year. We start with familiar predictions of an imminent special session and more budget reductions. In addition, the Commissioner has announced plans to restructure the University System in ways that will profoundly change our operations. With such serious challenges before us, little wonder that some may entertain doubts about our prospects.
However, before we leap to worst case conclusions, let's take stock. Despite recurrent warnings over the last three years about the dim future of higher education, we survived two regular sessions, two special sessions, and an effort to downsize the Montana University System. To do so, we had to cope with budget reductions and other challenges that required careful planning. Nevertheless, we have more than held our own.
- We have retained an excellent and committed faculty and staff, filled vacancies as they occurred, added new positions selectively in response to established priorities, and relied upon a significant number of temporary faculty and staff members to meet student needs.
- At the same time, we have attracted and served students in record numbers, who apparently consider what we offer worth the price. They keep coming despite the hikes in tuition and fees to compensate for the loss of General Funds. We anticipate a Fall enrollment of 10,800 students, compared to 10,600 last Fall, even with the enrollment ceiling set by the Regents, the early deadline for admissions, and the more stringent satisfactory progress requirements. We simply cannot handle any more students unless we expand the facilities and increase the faculty and staff.
- We have made slow but steady progress in the implementation of our information technology plan by completing the campus backbone, connecting more of the buildings, moving toward the goal of putting a computer on the desk of every faculty member, and upgrading the student computing laboratories.
- We have continued to address deferred maintenance, disability access, and refurbishing needs, and have kept the campus facilities operational.
- We have increased the acquisition budgets of the Mansfield Library and the Jameson Law Library and provided modest increments to supply budgets in the academic sector.
- We have made some critical equipment purchases, thanks largely to the Equipment Fee approved by the Board of Regents two years ago and the success of the faculty in the competition for external funds.
- We have Legislative approval of bonding for the new School of Business Administration Building, and we expect to proceed on schedule. Anticipating that construction will begin early in the new year, we have authorization to construct student recreation fields on the South Campus by Fall Semester 1994 to replace the Clover Bowl.
- We expect to break ground for the Davidson Honors College in late October this year in its planned location south of University Hall.
- Finally, we will formally announce the largest capital campaign in the history of Montana higher education for the benefit of The University of Montana on 29 October.
In short, the University has more than survived these trying times. While State support has not kept pace with inflation and pressing needs, the faculty and staff have responded with extraordinary efforts to serve the students and other clientele, and the students have contributed through increased tuition and fees. Tuition revenue today accounts for nearly one-half of our instructional budget, manifesting a major shift over the last three years. In addition, faculty success in the competition for external funds has provided critical support for research and graduate education and opened new opportunities to all students. Finally, our alumni and friends in the private sector have come generously to our assistance when we needed them most.
I mention these accomplishments and the means of attaining them to provide a context when we assess the problems we face. We do have challenges, but the University remains vital and vibrant in large measure because of the commitment and perseverance of the faculty and staff, the healthy enrollments, and the support of our alumni and friends. Among the problems we have yet to solve, I assign highest priority to faculty and staff salaries. Although the University System ranked an adequate salary increase as the highest priority in the budget request to the State, we made very little progress in the last session. The Legislature provided partially for the rising cost of health insurance and a salary increase of 1.5 percent, the latter effective only during the last six months of the Biennium. Some Legislators tried hard to do more, but the political mood and revenue situation in the State forestalled all such attempts. At present, bargaining for a new contract continues as we seek a framework for cooperation. I want to emphasize once again my commitment and that of the Regents to persist until we solve this difficult problem.
As inadequate salaries reveal, we have much to do despite our accomplishments under difficult circumstances. In that regard, we confront challenges similar to those of our colleagues in other states. For example, California's budget reductions this year resulted in a five percent salary cut for every faculty member of the University of California. In Washington, a successful petition drive will undoubtedly require the state universities and colleges to slash their budgets drastically--by perhaps as much as 20 percent--and they have already frozen salaries. In Oregon, budget reductions will occur for the third year in succession. In Colorado, even with salaries frozen, budgets have not kept pace with inflation. In virtually every state--with the possible exceptions of Idaho and Utah--higher education seems under siege, with budgets declining in real terms and productivity requirements rising.
Despite our problems, we have an institutional budget for next year that does not involve salary cuts, reductions in force, or program terminations, thanks to 1) the dedication of the faculty and staff; 2) the careful planning of the University Budget Committee; 3) the successful strategy that restricts General Funds to the support of residents, while requiring nonresidents to pay 100 percent of the cost of the education; 4) the overall enrollment and balance of resident and nonresident students; and 5) the tuition increases that have partially offset General Fund reductions. In this budget, we have provided for all current obligations, including promotion increments and merit increases for the faculty. While we have limited student access considerably over the last two years, we have nevertheless served more residents than we otherwise could have without the new funding approach and the successful enrollment strategy.
Deliberations over the last two years led to the decision to restrict General Funds to the support of residents, requiring nonresidents to pay full cost. The Legislature tentatively accepted this basic policy change, and I believe the Regents will reaffirm it and refine the details within the next few weeks. Moreover, I expect the Regents to accept the Commissioner's recommendation to set enrollment targets of resident and nonresident students for each of the campuses, taking into account 1) physical capacities, 2) the critical mass of students needed to support the program arrays mandated by institutional missions, and 3) existing bonded indebtedness requirements. I believe as well that, in conjunction with the Legislature and the Governor, the Regents will review the portion of the cost of education that residents must pay, currently 25 percent. Given the pressures on the General Fund, I see very few alternatives to an increase in that percentage if we want to preserve access for qualified applicants.
In all likelihood, General Fund appropriations for higher education will continue to decline over the next few years because of the intractable problems the State must resolve. If the Regents raise tuition again, I will urge them to increase the amount of student financial aid as well in order to prevent price from limiting access for qualified people. As other countries, states, and private institutions have done, we will have to direct a portion of the tuition revenue toward that purpose. At The University of Montana, we have already begun to do so, with the "safety net" of short-term loans established two years ago to assist students unable to manage the sharp tuition increases. We will have to do more to assure access.
The Commissioner will also recommend to the Regents a policy allowing tuition rates to vary by campus in relation to the cost of education and I think the Regents will concur. As you know, The University of Montana has maintained a form of differential tuition by program through the so-called "super tuition" assessed to Law, Pharmacy, and Physical Therapy students. We should consider a broader application of this approach. In addition, I will recommend differential tuition by student level--that is, for lower and upper division coursework. The Montana University System moved in this direction by adopting the surcharge for graduate coursework. Emergent conditions demand a systematic and comprehensive tuition policy, and I fully expect the Regents to adopt one that meets the needs of the campuses.
The overall parameters of General Fund appropriations, enrollment targets, and tuition policy will determine how many qualified residents we can educate, leaving the remaining seats for qualified nonresident students. It makes good sense to use the facilities to capacity, if we have qualified applicants willing to pay the full cost. This new strategy will allow us to reconcile quality and access because we can match enrollments and resources. We will educate as many qualified residents as the State specifies in the appropriation of General Funds and as many qualified nonresidents as our enrollment target permits. But we will no longer have to educate students on the margin because all will pay the full cost, one way or another. The policy makers must decide the percentage of State subsidy for residents so as to assure the desired level of access.
We must also look for ways to become more efficient and effective. During this past year, this University participated in a benchmarking study conducted by the National Association of College and University Business Officers. We will use the results to focus upon areas where we can make improvements. We will begin our analysis in those sectors covered by the study, seeking ways to redesign processes and simplify procedures. But we must not exclude any sector from careful scrutiny. In view of existing conditions, we must analyze all sectors to identify ways to improve the quality of our programs and services while assuring efficiency and effectiveness.
In that regard, the time has come to restructure the Montana University System to achieve additional efficiency and effectiveness. As you know, the Commissioner will urge the Board of Regents to consolidate the several campuses into two Universities, each with at least two branch campuses. His plan also calls for the integration of the Vocational-Technical Centers as Schools or Colleges of senior institutions. These proposed changes, substantial and far reaching in scope, require Executive and Legislative endorsement as well as campus involvement in order to succeed. Clearly, their implementation will entail new and different responsibilities for all of us, but they hold the promise of improving the educational delivery system in the State. In my view, they merit our support.
Because of our own aspirations and these potential developments, we must use the next few months to sort and rank our priorities, consolidate the progress we have made, and find creative ways to implement a multi-campus University. To sustain the academic identity, character, and integrity of The University of Montana as it takes on an expanded multi-campus form, we must attend to the history and tradition that inform the institutional culture. This University has a well deserved reputation for creativity in the face of adversity and excellence in undergraduate education. We take great pride in our demonstrated capacity to thrive under harsh conditions, and we boast frequently about our Nobel Laureate, 27 Rhodes Scholars, numerous Fulbright Scholars, and increasing numbers of Truman, Marshall, and Goldwater Scholars. And rightly so! The accomplishments of our graduates provide appropriate measures of the quality of the University. But we must act swiftly to shore up the foundations to sustain this historic reputation. The need for action becomes even more critical in view of the structural changes in the offing. At the same time, those changes will allow us to draw upon our new colleagues in this effort.
Therefore, I consider it appropriate that we rank undergraduate education as our second highest priority. Some may interpret this statement as an abandonment or denigration of the University mission and success in graduate education and research. In my view, however, we cannot fulfill the research and graduate education mission unless we assure the institutional foundations in undergraduate education of the very highest quality. To assure that end, I will ask the University Budget Committee to develop a budget request for the 1997 Biennium with faculty and staff salaries as the highest priority and undergraduate education as the second priority. We will have other priorities, but I believe these two must head the list. As I understand them, they mesh together perfectly. We can protect the quality of undergraduate education only if we attend to the needs of our faculty.
The budget for next year already reflects the priority assigned to undergraduate education. Despite reductions in virtually all other sectors, we have budgeted a five percent increase in base funding for instruction. This new base funding gives permanent support for the additional courses the Provost and Deans have estimated we must offer to meet student needs. In the past, we made one-time-only allocations for this purpose. Because of the new base funding and the new strategy, we can begin to increase the number of regular faculty members and thereby reduce dependence upon temporary assistance. Without impugning the quality of the people who have taught on a temporary basis, I believe that we cannot continue to serve the students attracted to the University unless we increase the size of the regular faculty. I have asked the Provost to proceed with due deliberation, since funding for the next few years remains problematic. In any event, we must guarantee to the students who attend The University of Montana that we will not compromise quality.
Implementing our priorities will force us to address new initiatives within the context of sustaining the quality of existing programs and consolidating a multi-campus University. We dare not cease all new development, however, especially in view of the new structure. But we will have to plan our new ventures much more carefully than we did in the past to respond to emerging needs and exploit our new and expanded capacity as a multi-campus institution. We must seek and implement a balanced approach protecting what we have developed even as we undertake new ventures of great importance to the State.
I have asked the Provost to work closely during the coming year with the Faculty, Staff, and Student Senates to promote a campus dialogue focused upon reaching consensus about campus diversity and a campus environment protective of the rights of all without compromising academic freedom. We discussed these issues during the past year, and should now bring our deliberations to some resolution. We need a resolution based solidly upon the commitment that this University will unequivocally protect the freedoms of belief, expression, and association essential to a decent society. During the past year, we succeeded in revising the Student Code of Conduct without jeopardizing the full range of freedoms we assure to students. We also now have a Diversity Plan in place that depends upon annual reviews to assure its integrity and proper implementation. We will not accomplish anything of value or permanence if we seek to diversify by insisting upon political correctness. Nor will we ever make progress toward achieving our goals if we fail to recognize that cultural diversity has its roots in our common humanity and that cultural differences enrich the campus environment.
Over the summer, at the urging of the Presidents of the two Universities, the Board of Regents approved a Student Athletic Fee for the partial support of intercollegiate athletics. I regard the fee as necessary to enable the University to satisfy NCAA requirements for participation at the Division I level and to resolve gender equity issues identified for us by the Office of Civil Rights. Despite the new burdens, we have reduced General Fund support for intercollegiate athletics by $190,000 over the last two years. Moreover, the Commissioner has recommended that we continue to withdraw General Funds until reaching a final level of $500,000 by FY 2000 and stabilizing there. Clearly, we have before us a serious challenge to identify the means to support the athletic program appropriate to The University of Montana. I think we benefit from a well managed program supportive of institutional goals. Therefore, I will work with others to assure that we achieve our objective by 2000.
In the September Meeting, the Board of Regents will consider a revenue bond issue of roughly $45,000,000 for the University. This bond issue will enable us 1) to refinance our existing debt; 2) to remodel auxiliary facilities, including the University Center; 3) to refurbish the parking lots and provide additional spaces; and 4) to construct a new residence hall and 120 new family housing units. Relying upon expert counsel concerning the debt capacity of the University, a committee of faculty, staff, and students identified the projects included within the bond issue, and the Campus Development Committee endorsed the proposal. As you know, revenue derived exclusively from rental rates and user fees will retire the bonds. I intend to press hard for the bond issue because of the very real benefits to the campus at large.
I must take this opportunity to commend the faculty for extraordinary success in the competition for external funds to support research, creative activity, and graduate education. The external resources attracted to the University have increased by more than twofold in three years, and the prospects for the future appear very bright. The committee charged to develop a strategic plan for University involvement in research and creative activity will present its report during the coming year. I expect that the report will call our attention to the need for new investments, possible revision of policies and procedures, and development of facilities so that we can sustain the record of success. We will deal with these recommendations through the usual channels of University governance.
My remarks reflect my optimism about the future of The University of Montana. As we move into the second century of service to the people and State of Montana, I see no reason to despair, despite the challenges before us. The quality and dedication of the faculty and staff provide ample basis for confidence in the accomplishment of the mission of the University. Success in that effort will diminish our concern about resources, for success makes its own road and people on a mission brook no constraints.
Thank you very much for your continued effort and your cooperation. I hope that you will find the coming year rewarding and fulfilling.