BY JAMES ROBINSON
To address what he termed "deferred maintenance," Provost John Hennessy says faculty and staff salaries are a top priority in his 2000-01 budget plan.
At last week's Faculty Senate meeting, Hennessy sketched the outlines of the university's $1.87 billion 2000-01 consolidated budget -- noting, however, that the amount of money he controls is much smaller. But the consolidated budget shows the university expects to have spent $708 million for academic and staff salaries and benefits by the end of the current fiscal year, while next year the amount will increase by 6.5 percent to $753.7 million.
Hennessy used a series of pie charts to illustrate how relatively small a pot of money he has to use on new initiatives and programs. Of 1999 consolidated revenues of $1.69 billion, he noted, the provost controlled only $413.6 million in general funds, including a $401.4 million base budget and $12.2 million in one-time reserves to cover unexpected items.
Looking at the five-year period 1996-2000, of the monies controlled by the provost, 96 percent "are basically predetermined costs based on last year's budget cost." What he termed "a small piece" -- 2 percent -- "is the incremental budget that we get to allocate on a yearly basis." That is the money from which new efforts and initiatives can be funded.
Showing how $56.2 million in incremental funds has been used during the five-year period, Hennessy noted that the top categories were faculty salaries and academic programs, and debt service. In each of those categories, more than $10 million was spent in the last five years. Other categories included technology, planned maintenance, and operating and maintaining new buildings.
Of the one-time reserve money, faculty housing has led all other categories. "If you thought we didn't have a housing problem, all you have to do is look at this chart and realize it's our biggest consumption of one-time money over the past five years," Hennessy said.
As for priorities for the 2000-01 budget, "we decided that faculty and staff compensation -- in particular, trying to address what I would call deferred maintenance -- was something we really needed to pay attention to. As a result, we've spent 42 percent of the incremental budget this year on faculty and staff compensation."
Other programs that will see increases are housing programs, including a boost in the subsidy for graduate student housing. In addition, stipends for graduate students will go up 6 percent, and more money is being spent to improve the financial aid package for undergraduates.
Also, some incremental money will go to the School of Humanities and Sciences "to address a schoolwide budget shortage," and there will be continued investments in administrative systems, he said.
Of $28.9 million in initiatives funded by the incremental monies, $12 million will be spent on the faculty and staff salary program, Hennessy said. "Recall that this $12 million only covers the portion of that program that's paid from general funds. So, in fact, there's considerably more money being spent university-wide. It doesn't include the medical school or any faculty or staff salaries paid from contracts and grants, nor does it include the Graduate School of Business."
But Hennessy acknowledged he wouldn't be able to make everybody happy with his budget plan. Lifting a hefty binder in the air, he said, "This is the book of budget requests for the entire university." The book represented about $26 million in budget requests against an available $12 million.
"And I would guess that probably 75 percent of what was requested were things that we'd really like to do. So we're constantly in the crunch of not being able to do things that, in the ideal situation, we would like to do," he said.
Stephen Monismith, civil and environmental engineering, asked how much of the budget increase for salaries was being spent on new employees.
"Overall, our personnel growth continues to be on the order of 1 percent a year outside of the medical school, which you don't see in the general funds budget," Hennessy said. "So I'd say it's driven primarily by faculty and staff salary increases."
Hennessy also briefly discussed the major items in next year's capital budget. The James H. Clark Center for Biomedical Engineering and Sciences is the major item that will see construction next year, but there also will be a new parking structure building on Stock Farm Road, the beginning of renovations to the Medical School and additional construction of graduate student housing.
Hennessy also indicated there would be a "fundamental change" from here on in the financing of new buildings.
"We are, in a broad sense, reaching
the university's ability to use debt as a primary way to finance
new construction," he said. As a result, in the next five years, he
said, 52 to 53 percent of the cost of new buildings will have to be
covered by gifts rather than debt. In recent years, gifts have
covered only 35 to 40 percent of construction costs.