John Etchemendy speaking with a chart on a screen behind him.

Provost John Etchemendy presenting the budget plan to the Faculty Senate on Thursday. (Image credit: L.A. Cicero)

Stanford’s 2016-17 Budget Plan addresses many of the university’s highest priorities, including providing full funding for new programs designed to combat sexual violence on campus, Provost John Etchemendy told the Faculty Senate on Thursday.

Speaking at the May 26 senate meeting, Etchemendy said the $2.7 million Stanford earmarked for programs focused on sexual assault education, support and adjudication represents the largest single general funds allocation in next year’s budget.

Etchemendy said the budget plan for the fiscal year beginning Sept. 1 also takes steps to address the critical housing needs of graduate students and faculty.

Next year, Stanford will break ground on a four-unit, 2,400-bed housing complex in Escondido Village for graduate students; when it opens in 2019, Stanford will be able to provide on-campus homes to nearly 70 percent of its graduate students. Etchemendy noted that the $937 million project is the largest single capital project in Stanford’s history.

Also next year, Stanford will open the first units in University Terrace, a community of 112 condominiums and 68 single-family homes for faculty.

The 2016-17 Budget Plan will allow the School of Engineering to hire teaching assistants and student services staff to support the growing number of undergraduates selecting engineering majors or taking engineering classes while majoring in other fields.

In presenting the $5.9 billion budget to the senate, Etchemendy said Stanford is in excellent financial condition, due to its underlying financial structure.

He began his senate presentation with a brief 16-year retrospective of Stanford’s budget, noting in 2001-02 – the first year he gave a budget presentation to the Faculty Senate – the university’s budget was $2.2 billion. At the end of his full report, Patricia Jones, a professor of biology, thanked Etchemendy for his excellent stewardship over the last 16 years, and the senate responded with a standing ovation.

In his presentation on the 2016-17 budget, Etchemendy said Stanford took a cautious approach to developing next year’s budget, due to recent weakness in investment markets and the anemic growth of federal research funding. He said the sharp drop in the equity markets in January and early February, when Stanford was making many budget decisions, prompted the university’s careful approach on revenue forecasts and budget allocations.

In response to the market volatility, Stanford decided to hold next year’s endowment payout flat, the same as the current year, a decision that was approved by the Stanford University Board of Trustees.

The budget plan will go next to the trustees for approval at the board’s June meeting. A formal budget document will be available on Stanford’s Bondholder Information website following board approval.

Research, financial aid and compensation

Etchemendy said sponsored research revenue at the SLAC National Accelerator Laboratory is expected to rise 18.9 percent next year, due to an expanded construction program.

Although Stanford faculty continue to be very successful in winning competitively awarded federal research funds, total sponsored research revenue, excluding SLAC, is expected to grow by just 1.8 percent in 2016-17. Revenue from non-federal research is expected to increase 6.8 percent next year, resulting in total university research growth of 3.3 percent, or $1.05 billion.

Growth in federal research revenue varies widely across campus. The School of Medicine expects federal research revenue to increase by 4.9 percent next year, following 7 percent growth in 2015-16. Federal research support in the non-medical schools and units is expected to decline 2.8 percent in 2016-17.

Student financial aid remains a high priority for Stanford, with a 3.8 percent increase in total budgeted financial aid for undergraduate and graduate students for fiscal 2016-17.

Under the new budget, Stanford will provide a total of $286.1 million in direct financial aid to students, including undergraduate, graduate and athletic support, plus an additional $298.5 million in salaries and stipends for graduate students.

Consistent with its commitment to need-blind admission for U.S. undergraduate applicants, Stanford has increased funding for need-based undergraduate scholarships to $147.2 million next year, compared with $145.9 million in 2015-16.

Tuition will rise 3.5 percent next year, under an earlier action by the Board of Trustees.

The 2016-17 Budget Plan includes a 6.8 percent increase for overall compensation next year, reflecting salaries, anticipated personnel growth and benefits.

New investment of general funds

Overall, the Consolidated Budget for Operations anticipates a 2.6 percent increase in revenues, with an ending surplus of $121 million on $5.9 billion in revenues.

Next year’s modest revenue increase is the result of a 9.5 percent reduction in investment income, moderated by a 19 percent increase in revenue from the SLAC National Accelerator Laboratory, and a 10.5 percent increase in health care services revenue.

Within the Consolidated Budget, the General Funds Budget – which can be used for any university purpose and supports many of the core academic and support functions of the university – is projected to decrease 3.6 percent, with an ending surplus of $12.2 million on revenues of $1.3 billion.

The 2016-17 Budget Plan allows $15 million in additional spending of general funds. About half that amount will cover inflationary costs. The remainder will fund a variety of high-priority purposes, including the following:

Student support: Stanford has allocated $4.5 million for student support programs next year, including $2.7 million for staffing to respond to the recommendations of the Task Force on Sexual Assault Policies and Practices.

Faculty support: Stanford has allocated $1 million in continuing support of the Faculty Development Initiative and the Faculty Incentive Fund, which encourage ongoing recruitment of underrepresented minorities and women to the faculty. The university also allocated $1 million to two schools to help recruit and retain faculty, as well as to address faculty salary equity concerns.

Core academic support: The general funds budget provides $2.9 million in additional support for a South Asian studies library collection manager, as well as funding for digital humanities technical staff for the Center for Spatial and Textual Analysis, and operational funding for the Stanford Research Computing Center.

Business efficiency and compliance: This category provides $2.7 million in funding for enhanced efficiencies in procurement, for increased workload in Environmental Health & Safety, and for the new alumni and development system and the new university budget system.

Administration: Stanford has allocated $2.9 million for additional administrative staff in the Office of the Vice Provost for Teaching and Learning, as well as additional staff for fundraising efforts for arts programs and interdisciplinary institutes.

Capital Budget

Etchemendy also presented a Capital Budget for 2016-17 that is part of a rolling multi-year plan that includes projects in progress or expected to begin over a three-year period.

The Capital Budget calls for $1 billion in expenditures in 2016-17, supporting a range of projects requiring $4.1 billion in total expenditures once fully completed. Expenditures will be significant under next year’s budget for several construction projects:

The full minutes of the May 26 meeting, including the question-and-answer session after Etchemendy’s presentation, will be available soon on the Faculty Senate website.