04/25/95
CONTACT: Stanford University News Service (650) 723-2558
STANFORD -- A sudden cut in federal research funds could send academic departments scrambling in order to help graduate students to complete their degrees, chemistry Professor Michael Fayer warned at the April 20 meeting of the Faculty Senate.
Fayer's comment came after Provost Condoleezza Rice outlined the university's 1995-1996 budgeting process to the senate. This extreme scenario was not discounted entirely by Rice, who urged departments to begin finding ways to help cover unanticipated costs that could be associated with a large-scale cutback in federal funds.
A large portion of the university's funds for research comes in the form of restricted funds that can't easily be shifted from one department to another, Rice explained.
"I think that we recognize that if the shortfall is in a particular department, that department is going to have to be the first line of defense," she said.
Rice told senate members the university is on track to meet its current goal of cutting $6 million from the budget. This marks the second year of a three-year effort to cut $18 million from the university's annual budget.
In a preview of a report she will make in June, Rice explained that the reductions are being achieved through a new "revenue constrained" budgeting process, whereby the university plans to spend no more than it accrues in revenue.
She told the senate that the old concept of factoring in an automatic annual adjustment for inflation each year was something the university "can't afford to do."
Under the new system of allocating funds, Rice reported that the expense growth would be held to 1 percentage point over inflation. University costs traditionally have risen approximately 2 percentage points above inflation annually.
Administrative units will bear the brunt of most of the cuts, with some units facing budget reductions of 2 to 3 percent, Rice said. Library services, the Department of Environmental Health and Safety, and Student Affairs units are the exception. Their budgets, Rice said, will be increased at the rate of inflation, which this year is 3.5 percent.
Central Stores, the university's facility for departmental purchases and office supplies, will be downsized and perhaps even eliminated, Rice announced.
"We have been forced to lay off significant numbers of employees in order to lower our costs. However, even with those layoffs we cannot both cover our costs and maintain competitive prices on many kinds of products," Rice said.
The university has been developing a new procurement system that will facilitate the process of purchasing standard office supplies and laboratory equipment through online systems rather than through paper order forms.
"Given these developments," Rice said, "we have informed the staff of Stores it will be downsized significantly in the coming months."
Other savings will be achieved by holding the budgets of certain departments constant in nominal dollars.
This is "somewhat of a real cut" that amounts to about a 3 percent reduction in each school's budget because allocations aren't being augmented for the rate of inflation, Rice said.
Although the provost said the university is well on its way toward meeting its budget-cutting goal for the second year in a row, she acknowledged that the threat of cuts in federal research funding is a wild card that is difficult to take into account in the budget planning process.
"Our dependence on the federal government is substantial at this point," said Charles Kruger, vice provost and dean of research and graduate policy. "Something like $471 million out of our $1.2 billion consolidated budget is sponsored projects, and 87 percent of that is from the federal government."
These figures are likely to take a plunge, said President Gerhard Casper. "I think that there can be no question that in the long term -- and by the long term I mean as soon as two, three, four years out -- there will be further cutbacks in federal funding and we will have to go into a downsizing mode," he said.
Though Casper pressed for individual departments to begin taking a serious look at how they might accommodate some of these shortfalls in their budgets, he acknowledged such planning efforts are difficult, because the extent to which departments will be affected is difficult to forecast.
"We are working in utter darkness," Casper said. "Members of these major [congressional] committees have really no clue how these things will come out. And since they have no clue, we, of course, are even more clueless."
One step the university has taken to brace for sudden cuts is allocating 2 percent of general funds to a contingency fund aimed at covering unanticipated shortfalls in revenue, Rice said.
"I believe that it is only prudent that we be able to cover some shortfall of revenue, which we could experience if things go bad in Washington in August or September or October -- a not at all unlikely probability," she said.
The contingency fund also will help smooth over any last-minute wrinkles that may appear from uncertainties in the university's costs and revenues at the closing of the books, Rice added.
In other matters, the Faculty Senate renewed the Master of Liberal Arts degree in the Continuing Studies Program for five years and postponed making a decision to change the way academic unit credits are granted for activity courses.
The credit issue was brought to the senate by the Committee on Academic Appraisal and Achievement, in response to a proposal by the Commission on Undergraduate Education last October to discontinue the practice of granting credit for activity courses.
The current proposal advises against eliminating credit for activity courses altogether on grounds that "the policy of granting 12 units for activity courses is a statement of a long- standing educational policy that encourages students to broaden their education and to participate in music, dance and various sports activities." Instead, the C-AAA proposal recommends a maximum of 4 of the 12 units counted toward graduation be allowed to come from any one department.
The senate postponed bringing the matter to a vote after a lengthy debate on the relative value of athletic activities in education that brought to the fore a concern that some Stanford students could become ineligible for financial aid or NCAA competition if the proposal went into effect.
The NCAA requires that varsity athletes take a minimum of 12 units per quarter while their sport is in season. Stanford students currently earn up to 2 units per quarter for participating in a varsity sport.
Under the proposed change, these activity units would no longer count toward graduation after a second quarter of play, possibly giving the NCAA cause to rule that the varsity athlete is not a full-time student and therefore ineligible to compete.
The senate will reconsider the proposed change after the NCAA rules and regulations are clarified.
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