George M. Dennison
President
The University of Montana

Missoula, Montana
1 September 1995

Good morning and welcome, especially to you who have joined us this fall. I speak for all when I express our pleasure that you have decided to share with us the challenge of moving The University of Montana into the 21st century. More importantly, you will find you have joined a talented and dedicated group of professionals determined to make the most of the opportunities that arise.

As customary on this occasion, I have the pleasure to introduce new administrators and identify others who have accepted different positions. Bob Kindrick has added to his roles as Provost and Vice President for Academic Affairs and Dean of Graduate Studies for the multi-campus University of Montana to become Dean of the Graduate School here in Missoula as well. Ray Murray, who has served the University for many years as Associate Provost and Dean of the Graduate School, has agreed to take on the duties as Vice President for Research and Development for the coming year. Fritz Schwaller comes to us as Associate Provost and Professor of History. Kathy Noble, Associate Athletic Director, has agreed to serve as Interim Athletic Director while we search for a new Director. Thank each of you for your willingness to assume these responsibilities.

This year begins auspiciously despite rising concern about the condition of higher education. We have entered a transition period that will carry us into relatively uncharted terrain. The old approaches no longer work. As one indicator of the change, students and their families have shouldered an ever increasing portion of the cost. When I arrived on campus five years ago, 75 percent of our academic budget came from the State General Fund and 25 percent from tuition. This coming year, we will receive only 45 percent from the State and fully 55 percent from tuition, illustrating the sea change currently sweeping higher education. The State cannot do more because of new and emerging demands for health care, penal systems, K-12 education, repair of aging infrastructure, reduction of the national deficit, and economic development. In this new fiscal context, how do we assure that public higher education retains its public character?

In Montana, we had no choice but to rely more heavily on tuition and less upon the State for support. Some view this as a move toward privatization, but I disagree. In my opinion, it represents a realistic response to inevitable change and a recognition that we must become increasingly responsible for our own well being. To date, we have fared reasonably well, which suggests that we should stay the course but seek as much support as possible from the State. State policymakers will do what they can, but they have fewer and fewer options. In the end, I think we gain more by helping ourselves than by resisting a change that will surely overwhelm us in any event.

As dramatic as they seem, these fiscal changes attest to a virtually revolutionary shift in the public mood concerning higher education. Every minor pundit today feels licensed to tell us of our faults, even to invent a few if the list gets overworked. The litany has become quite familiar. Faculty members do not work enough, or hard enough when they work, or at the right tasks when they work. Teaching has become the grunge labor of academe, and those who do it inhabit temporary ghettos surrounding the campuses. Curricula reflect the faddish interests of faculty dilettantes rather than societal needs. Students come to college not to learn but to spend a few years in post-adolescent party-time before entering the labor force unprepared for productive work but insistent upon high salaries. And faculties care little about anything other "than tenure, salary increases a step ahead of inflation, [unconstrained control of their own time and activities], and the replication of themselves in their graduate students."1 In my view, these allegations have little to do with reality. But whether we agree with these widespread perceptions matters far less than the actions we take to respond to them.

This scathing criticism has made the recent debates about State funding for higher education and tuition increases exceedingly rancorous. While surveys confirm that overwhelming majorities continue to value higher education, the respondents also harbor deep concerns about rising costs. The attitudes expressed about higher education parallel those concerning health care.2 People generally regard the American system as the best in the world but they have pressing fears of exclusion because of cost. At a time when we ask for greater support from students and their parents, they demand in return assurance of access and quality at a reasonable price. Therein lies the challenge.

To manage the transition and assure a stable support base, we had to change our mode of operations. Business as usual will not work in these challenging times. The new approach has already engendered certain tangible effects--from the effort to maintain an attractive physical environment to a new bargaining agreement and a revised funding model for the two-university Montana University System. These developments explain in part why I remain optimistic despite the seemingly unfriendly atmosphere, because they indicate we have begun to regain control of our own affairs.

First, the new bargaining agreement. Last year we negotiated an agreement among the students, faculty, administration, Regents, legislators, and Governor that looks toward the maintenance of access within a context of quality. Students endorsed the agreement, even though they knew its implementation required tuition increases. The agreement includes several commitments we must fulfill, and we have structured our budgets accordingly. We must assure competitive salaries for the faculty, with the first installment this year, as well as increased teaching loads so that students can gain access to the classes they need; adequate funding for the instructional budget to assure quality and access, including base funding increases during each of the next four years; the infusion of information technology across campus and widespread access to the campus backbone and the internet; Library and equipment acquisitions to maintain quality in the academic programs; curricular change to produce an appropriate combination of general and major field education; adequate advising and counseling services; steady improvement in our retention and graduation rates; and continuous efforts to become more effective and efficient in all our operations.

To monitor progress, we have identified certain benchmarks to indicate when we have achieved our goals, benchmarks growing directly from the criticisms leveled against us. In a very important way, the bargaining agreement amounts to a new social contract with the people of Montana. We cannot have only those parts of the contract that we like while ignoring others. We must implement the agreement fully in order to realize its benefits. The initial progress report this fall will show that we have acted in good faith.

Second, we have a new funding model for Montana public higher education. State appropriations cover a fixed percentage of the cost of the education of residents, and they pay the remainder in tuition. Nonresidents, with minor exceptions related to established exchange and resource sharing programs, pay 100 percent of the cost. Using the predetermined percentage, we know in advance how many residents we can educate by the amount of General Funds allocated to the University. Once we know that number, we also know how many nonresidents we can educate, for we fill the vacant seats until we reach institutional capacity as defined by our physical facilities and the faculty and staff to provide the programs and services.

Third, the University System implemented a major restructuring plan for more effective functioning in the years ahead. To date, we have completed only the formal components of the plan. We have now to organize our various administrative systems and mass our faculties and staffs to address the larger purposes. We will begin to do so this year during the second phase of the process with a sharp focus on assuring undergraduate education of the highest possible quality while helping students to decide which campus and program meets their needs and aspirations as responsible learners.

We have yet to design and persuade the State to adopt a student financial aid program appropriate to the new era of high tuition. Despite our best efforts to control costs, we will have to increase tuition, since the State simply cannot provide the resources to maintain quality and access. If we do not implement a State-funded financial aid program to assist those with demonstrated need, we will soon close access to worthy applicants without the wherewithal to pay the cost. A new approach to funding public higher education does not signify that we have abandoned our commitment to access for all qualified and motivated applicants. Rather, it means that we must find the means to assure broad enjoyment of the benefits that public higher education provides.

I regard the restoration of public confidence in higher education as the most critical task before us. Our new social contract with the people of Montana moves us toward that goal. As we proceed, we must rethink and restructure our academic programs to assure the public that we have designed an education to prepare students for the world of the future rather than the past. If the current criticism has any validity, I think it derives from our unwillingness to revise curricula root and branch. Instead, we simply add a few more credits to deal with new knowledge and needs. As a result, curricular change extends the time students need to graduate and increases the cost to them, their parents, and the State. We must initiate a more searching curricular review focused upon the competencies and understandings we expect of students for graduation. Academic rigor and quality must become our key words.



In addition, we must continue to become more effective and efficient. Our participation in the national benchmarking project and the Pew Higher Education Round Table has given us opportunities to look closely into the ways that we conduct our affairs. Increasingly we discover that while we have achieved high levels of efficiency in some areas, we do not function as efficiently as some of our counterparts in other areas. In part, the unfavorable comparisons reflect a human tendency to do things the way we have always done them. In part, we suffer as well because of our entanglement in the bureaucratic morass in Helena. To deal with these two challenges we need two different strategies, one local and one Statewide.

On the campuses of The University of Montana, we must carefully analyze all of our processes and procedures and identify changes that will enable us to function more efficiently. This mandate applies to all sectors of the University, from academic affairs through the administrative areas. I do not advocate change merely for the sake of change, but urge redesign of processes and procedures when we can offer enhanced programs and services at lower cost as a result. In that regard, I firmly believe that we will never accomplish our goal if we merely ask everyone to work harder. Currently everyone works very hard. We must all work smarter so we can achieve more and better results without burning people out. And we must find ways to help people to deal with the new conditions and stresses.

During the past year, I have met with faculty and staff in virtually every department and program of the University. These meetings offered the opportunity to hear concerns and identify problems. In general, I found a pervasive desire for programs to assist people during these times of change and stress. The most frequent requests call for better communication, carefully tailored professional development programs, and the equipment, facilities, and materials people need to do their work. Everyone wants to do well, but they need help.

In light of these requests and the imperative to attend to the human as well as physical resources of the University, I have decided to launch a Human Resources Initiative. To that end, I have asked a group of interested and experienced individuals to serve on a Human Resources Task Force under the leadership of Kathy Crego, Director of Human Resources. The Task Force will survey the employee groups and develop action plans to respond to the identified needs. The University asks much of those who constitute it, and it must help them to remain productive. I have assigned the highest priority to this effort in the realization that we will surely fail as an institution if we do not provide adequately for the people who are the University.

Statewide, we will develop a strategy to persuade the next Legislature in the 1997 Session to release us from bureaucratic entanglements. In this endeavor, we follow the lead of our colleagues in Oregon who succeeded in a similar effort this year, with an estimated savings of nearly $18,000,000 annually. We do not have a fix on the potential savings as yet, but we will have before we launch our initiative. To that end, I have appointed a special Task Force with members from all campuses of The University of Montana to prepare a report by January 1996. The Task Force will take account of the work of our various benchmarking committees during the last two years.

Why must we place so much emphasis upon efficiency and effectiveness? I submit two reasons for your consideration. First, by standing accountable to the State and people of Montana for the most efficient and effective use of the resources made available to us, we have a much better chance of securing release from bureaucratic red tape. If we persuade the Legislature in the 1997 Session, we will have an even more compelling interest in accountability. To protect our newly won autonomy will keep us focused on the bottom line of the cost to our students and the State. Second, we can ask students to bear a larger part of the cost of their education only if we control the cost. I do not suggest that we cut corners, for to do so will inevitably lead to a decline in the quality. But we must scrutinize every proposed increase in cost to evaluate its purpose and legitimacy.

Moreover, the general atmosphere of the 1990s requires that we attend to these concerns. As you know, virtually all governments and businesses have found it necessary during the last decade to reduce their costs in order to survive and remain competitive. Higher education cannot expect exemption from close scrutiny of costs during this period of retrenchment. We argue that we have been there and done that ourselves. Our critics and even some of our friends review the data and disagree. Consider a few brief facts.

From 1982 and through 1997, total educational revenue for the University will have increased by $36.9 million, up 139.9 percent. In constant dollars, that increase amounts to just over $13.1 million, or roughly 48 percent. During that period, student numbers will go up by 2,103 FTE from 8,141 to 10,244, an increase of 25.8 percent. As a result, constant dollars per FTE student will increase from $3,366 to a projected level of $3,955, up $589 or 17.5 percent. Despite the adequacy or inadequacy of the beginning point--bear in mind that most commentators describe 1982 as a good year for Montana higher education--and the cost increases imposed by external mandates and the introduction of educational technology, we have clearly made progress during some very difficult years. When we talk about our situation, we need to keep these data in mind. They do not describe a progressively worsening plight.

Now, how did we finance the progress? The components of our revenue increases reveal the answer clearly. In constant dollars, the General Fund, which provided 82.1 percent of educational revenues in 1982 but only 43.5 percent in 1997, will actually decline by $4.8 million or 21.5 percent over that period. Meanwhile, constant dollar tuition revenues, which provided only 17.9 percent of educational revenues in 1982 but fully 56.5 percent in 1997, will increase by $17.9, up 365.1 percent--an increase larger than the real dollar value of the 1997 General Fund contribution to our educational expenditures. These dramatic changes make it clear beyond doubt that we must deliver on our promises to students if we hope to survive in the new environment. Otherwise students will stop coming and the University will not have the resources to sustain the desired array of programs and the quality of those offerings.

I want to take a few moments to discuss three additional and related issues with you this morning. One has to do with the means of assuring that we have the enrollments necessary to sustain us. I refer to enrollment management, a function we cannot merely assign to someone or some office and then forget. If we fail to do it well, we will all pay dearly, for we will not make budget. Consider that if we miss our enrollment target for nonresident students by 100 FTE, we will have to reduce budgets by at least $620,000. We cannot afford to neglect this vital area of concern.

Therefore, we must develop quickly the planning capacity to project the number of students needed by program and level across the campus in the programs we wish to maintain. In the past, we merely set a total enrollment number, if even that, and then waited to see how many and which students enrolled by major program of study. We can no longer afford such a crude approach. We must have a detailed and reliable plan that relates enrollments to resource allocations. To that end, I have appointed members to an Enrollment Planning Task Force under the leadership of Don Habbe, Senior Assistant to the President, to develop the enrollment plan and to suggest strategies for implementation to help us attain our recruitment and retention goals. The Task Force will present the plan as early as possible in Fall Semester so that we can refine and approve it prior to conducting the recruitment campaign for FY 1997 in accordance with its premises and projections.

Let me state the obvious so that we all keep it in mind. It makes little sense to recruit students if we do not serve their needs and they fail or drop out shortly after their arrival. I do not mean to suggest that we must acquiesce to their every whim, but rather that we must attend to their identified needs. In addition, we cannot expect to recruit students if we do not maintain academic quality, or if we fail to make the students feel welcome when they arrive. Once again, I do not suggest that we must coddle them. Students want and thrive on challenges. But experience shows that students have little respect for an institution that has no respect for itself. When faculty and staff evince little confidence in either the institution or its programs and give that impression to students and potential students, the students will exhibit these same attitudes. If we expect students to continue to come to The University of Montana, we must respect them as individual learners and treat them accordingly, while attending to our own responsibilities as professors and mentors.

The second issue derives from the first but focuses upon a distinct segment of our student population and our responsibilities to all students. In my State of the University Address in 1991, I urged that we find ways to enable all of our graduates to experience life in another culture. In addition, I suggested that we enroll at least 10 percent of our students from other countries. In making those two related recommendations, I had in mind our obligation to prepare "global citizens for a world that is shrinking before our eyes, where alliances and interrelationships change on an almost daily basis."3 I also had in mind the benefits to all our students of having people from diverse cultures on our campus. I think these recommendations even more urgent today, for recent developments underscore the imperative to assist our students to prepare for the global society they will inhabit in the next century. As an added benefit, American higher education remains very attractive to international students so long as the education equals in value the cost to attain it.

The third issue derives from the first as well and relates to our mission as a research-oriented, doctoral-granting university. I allude here specifically to the relationships between research and graduate education. Last year in my State of the University Address, I emphasized our collective concern that the Carnegie Commission had altered the designation of The University of Montana from a Doctoral I to a Doctoral II University. The redesignation occurred solely because we failed to maintain the required average number of doctorates conferred annually. We must regain Doctoral I status or reconsider our mission in the State.

As we all know, graduate education by its very nature involves research, both sponsored and unsponsored. No university in this country can do graduate education in today's environment without significant external support for the research. Nonetheless, the term research has become almost an obscenity in some circles, in part because of a perceived conflict with teaching. I reject that view. I believe that by involving them in research, we prepare our graduate students for the leadership roles they will have to assume in the future. I also think it bears mention that research involvement enhances the quality of undergraduate education, when kept in balance. As John Slaughter, former President of the University of Maryland and Director of the National Science Foundation, once observed, "Research is to teaching as sin is to confession. Unless you participate in the former, you have nothing much to say in the latter."4 Let me state again for emphasis that not all research is funded externally, but external funding makes a tremendous difference in what we can do as a research-oriented, doctoral-granting university.

The faculty researchers of this campus have performed incredibly well during the last five years. The volume of funded research went from just over $7,000,000 in FY 1990 to more than $22,000,000 in FY 1995. That remarkable increase, more than tripling the annual volume, came during a period when the competition for funding became especially keen. But, as I explained last year, the rate of increase has slowed in the last couple of years, and we must take steps to support the researchers to enable them to sustain the progress. The first step involved designating a Vice President for Research and Development to provide leadership. Ray Murray, who has facilitated the growth during the last five years, has accepted that assignment for the coming year as we conduct a national search for a new Vice President. We will not wait for the completion of the search to initiate changes in infrastructure to support our research mission. We have three separate reports to guide us in the process, and will refer to them as we proceed.

But we cannot leave the graduate education issue there. We must find ways to increase the number of doctorates conferred annually. Doing so will probably result in more doctoral programs on the campus as well as somewhat higher enrollments in existing programs. As we add new programs, we must do so with all the costs clearly stated and met. It does little good to add programs we cannot sustain. In this regard, however, we must keep in mind that a doctoral program more nearly represents a license to search for external funds than an entitlement to additional resources. If the proponents of new programs expect the University to shoulder the entire burden, we will never succeed in our effort. We must together find new ways to attract the needed resources. As to enrollment levels, we must assist the students to qualify for their degrees within a reasonable period. Most studies indicate that attention to student needs combined with adequate funding assures persistence as well as graduation. The Provost, in his new role as Dean of the Graduate School, will coordinate the planning to regain our Doctoral I designation as soon as possible.

Before closing, I want to pay public tribute to the dedication and sacrifice of a committed faculty and staff. Without your total involvement, we stand little chance of succeeding in our effort to respond to the challenges before us. That involvement explains, in the final analysis, my optimism about the future regardless or perhaps because of the challenges we face. In our new social contract, we have recognized the faculty commitment by providing assurance of competitive salaries within a reasonable period. We have yet to respond as fully to the staff, but we have determined to do so within the next two years.

Let me add as well a note of special gratitude to all the faculty, staff, and students who have served or will serve on building committees. As someone said the other day, it seems that something is either going down or coming up on every corner of the campus. Without the guidance and counsel of the committees, we would not make progress at all. I also appreciate the indulgence of the campus community as we proceed with this important work. I know you agree with me that the long-term benefits make the temporary inconveniences, however annoying, bearable.

Thank you for your commitment and your assistance. I wish you all a successful and productive year.



1 Comment of Professor Richard L. Schacht in Looking to the Twenty-First Century: Higher Education in Transition, The David D. Henry Lectures, 1986-93 (Urbana-Champaign: University of Illinois Press, 1995), at p. 128.

2 John Immerwahr with Steve Farkas, The Closing Gateway: Californians Consider Their Higher Education System (California Higher Education Policy Center, September 1993), p. vi.

3 As quoted from Looking to the Twenty-First Century, at p. 67.

4 As quoted in Looking to the Twenty-First Century, at p. 64.