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President Says Resources Are Paramount Challenge to Future of The University of Texas at Austin

William Powers Jr., president of The University of Texas at Austin, praised the hard-earned accomplishments of the university during his second State of the University Address Wednesday, Sept. 19, but he also stressed it is important to recognize and confront serious challenges that must be overcome if the institution is to become ‘the great public university in America.’

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AUSTIN, Texas—William Powers Jr., president of The University of Texas at Austin, praised the hard-earned accomplishments of the university during his second State of the University Address Wednesday, Sept. 19, but he also stressed it is important to recognize and confront serious challenges that must be overcome if the institution is to become “the great public university in America.”

William Powers Jr., president of The University of Texas at Austin, delivered his second State of the University Address Wednesday, Sept. 19 in Jessen Auditorium

William Powers Jr., president of The University of Texas at Austin, delivered his second State of the University Address Wednesday, Sept. 19 in Jessen Auditorium.

Accomplishments such as enriching and reforming the undergraduate experience, campus diversity, research endeavors and faculty achievements recognized by prestigious awards show that the university is strong and thriving, Powers said. However, the university also is seriously challenged by resources, he said.

“Put simply, we are grossly under-funded compared to our mission,” Powers told the audience of more than 300 faculty, staff and students in Jessen Auditorium. He said the university, therefore, must set its house in order with a “sound business plan” that will require more robust funding and alignment of budgets and budget processes with the goal of becoming competitive with peers to attract and retain the very best faculty and graduate students.

For more information contact: Robert D. Meckel, Office of Public Affairs, 512-475-7847.


President William Powers Jr.
State of the University Address
Jessen Auditorium
The University of Texas at Austin
September 19, 2007

A Year of Focus and Discipline

Good afternoon.

This month, we celebrate our 124th birthday, and in its 124 years, UT has grown into one of the world’s great research universities. In the past year alone, we can celebrate many achievements. I don’t have time to go through them all, but we should use this occasion to take pride in our success.

More than 300 faculty, staff and students were in attendance at Jessen Auditorium for the president’s second State of the University Address

More than 300 faculty, staff and students were in attendance at Jessen Auditorium for the president’s second State of the University Address.

Overall, we continue to thrive, and our academic peers think highly of us. In the U.S. News and World Report poll, our academic peers rank us 22nd in academic quality among 262 national universities and sixth among public universities. These rankings have their flaws, but what our academic peers think of us is a rough guide, and they put us in lofty company. I should point out that our overall ranking is not as high, mainly because of criteria that measure our financial resources. I’ll say more about that in a moment. But we should take great pride in the fact that we work—and we are perceived to work—in the very top echelon of academic research and teaching. This recognition by our peers confirms my firm belief, which I discussed last year, that we are poised to be the great public university in America. We need to embrace this goal.

I wish I could take credit for the way we are viewed by our academic peers. But, of course, I can’t. Academic quality in teaching and research is won by faculty working in departments and research centers. These are the central building blocks of a great university.

But we also face serious challenges, and we need to use this occasion to recognize and confront these challenges. We will not become the great public university in America if we ignore our problems, or if we lose the resolve and fortitude to overcome them.

But first, let me briefly recite some of the year’s successes.

In the past year, we made great strides in enriching and reforming the undergraduate experience. We now offer 87 first-year Signature Courses, most of which are small seminars. I’m happy to say I myself am enjoying teaching a seminar for freshmen and sophomores. It’s called “What Makes the World Intelligible.” Tonight is the third in our series of University Lectures, which help unite the Signature Courses. Six colleges have revised their degree plans so that next year half of our freshman class will take the First-Year Signature Course as part of their required curriculum.

Implementing all of these changes will take a decade, but we are off to a great start. This is due to the time, effort, and candid debate of our students and faculty. I applaud the Faculty Council for the leadership it displayed in this process. We knew curriculum reform would be controversial, but avoiding this task would have been a disservice to our students. And we surprised the external community by confronting it as an academic institution should confront any issue, with free and robust debate, and then by getting the job done.

We have much more to do with respect to the undergraduate experience. We need to expand advising, to develop courses that better satisfy our new curricular requirements, and to create a home for truly undecided students. But the structure is now in place to move ahead. I’m proud of our campus for moving through this process with both candor and with a commitment to progress. And I’m proud of Dean Paul Woodruff for his vision and tireless effort.

Continuing to diversify our campus is one of our highest priorities. We’ve recruited 30 minority faculty members during the past two years, and we’ve retained 14 minority faculty members who were courted by other institutions. This year’s freshman class is the most diverse ever: 19.7 percent Hispanic, 19.7 percent Asian American, and 5.8 percent African American. These are new highs in each group.

This has been a record year for our research endeavors. In the most recent reporting period, we received $497 million—almost half a billion dollars—in sponsored research awards. This is an extraordinary 22 percent increase over the previous year. We moved from fourth to third in the nation in the amount of federal funding for universities without medical schools. The Texas Advanced Computing Center alone received a 5-year grant of $59 million from the National Science Foundation to fund the largest supercomputer at any academic institution in the world. This is our largest ever single award from NSF. And the UT Applied Research Laboratories were awarded a 10-year contract with the U.S. Navy for $928 million!

Last year we received $270 million in gifts from donors and friends. This is the second-highest gift total in our history, surpassed only by the year in which we received the majority of the $285-million Jackson gift to Geosciences.

We made changes to our licensing and intellectual property policies that will make it easier for faculty to commercialize their work and that will encourage entrepreneurial activity. These changes will streamline the administrative process for UT researchers and enable their work to have a greater impact on the world at large.

Finally, our faculty has been honored with numerous awards, of which I will mention only a few. Stelios Kyriakides of aerospace engineering and Simon Lam and J. Moore, both of computer sciences, were elected to the National Academy of Engineering; Guggenheim Fellowships were awarded to Diana Davis of geography, Neil Foley and Cynthia Talbot of history, and A. Van Jordan of English; Thomas Hughes of aerospace engineering was elected to the American Academy of Arts and Sciences; and Karen Uhlenbeck of mathematics received the Leroy P. Steele Prize, the highest distinction of the American Mathematical Society.

And I could go on. I have barely scratched the surface. There is simply more good news than I have time to report. But these and other accomplishments show that the State of the University is strong, and that UT thrives in the very top echelon of teaching and research.

But, as I said earlier, we have serious challenges, and we ignore these challenges only at our peril. As we take stock of the state of the University, we must recognize these challenges, and we must resolve to overcome them.

The paramount challenge is resources. Put simply, we are grossly under-funded compared to our mission. Compared to the average university or college in Texas or the nation, we do OK. But when we recruit faculty and students, we don’t compete against the average college. Our mission is to compete at the very top, and when we do that we compete with fewer resources.

As I said, our peers say we are 22nd out of 262 national universities in academic quality. But when you turn to total financial resources, we are 96th out of these same 262 universities. On nearly every financial comparison, we lag far behind our competitors. Put another way, our six-year financial forecast, which keeps most current initiatives constant and excludes any future tuition increases, shows a future yearly deficit of more than $200 million in year six. And that counts all sources of funding, including current tuition, philanthropy, external research grants, and the Permanent University Fund, which, by the way, accounts for only 6.9 percent of our budget. To paraphrase Mark Twain, rumors of our oil wealth are greatly exaggerated. We can take pride that we do more with less, but in the end this is no substitute for resources.

Our financial resources affect us most when it matters most: when we are recruiting or retaining faculty and graduate students. All too often a sterling faculty prospect considers a dozen schools at the outset of her search. When she visits our campus, she decides that the choice is between us and one other school, and her heart is with us. We really do compete well when prospects see our programs, our faculty, and our students. But then she compares the two offers, and we’re not competitive. So we lose her. The other school has a higher salary, it has a sabbatical program, it pays more for research and travel, it has a more favorable teaching load, it subsidizes housing, and it pays college tuition for children. We face many of the same hurdles when we recruit graduate students. Other top tier universities simply offer much more attractive stipends.

We often lament the phenomenon of salary compression, whereby mid-level faculty are caught and even surpassed in salary by junior faculty. This is merely the canary in the coal mine. It’s a symptom of our condition. We are forced to compete at the margins to attract and retain faculty, but our average salaries lag. And so the mid-range faculty suffer.

If we are to continue on our decades-long path to become the leading public university in America—and we must continue on that path—we need to change this. We need to set our house in order so that in five years, we have competitive salaries, a full sabbatical program, travel allowances, and resources for our graduate students that are equal to our peers.

The leading public university of the 21st century will have many attributes: great research programs, diverse faculty and students, and a rich undergraduate experience. It will have a lower student-faculty ratio. And it will have global reach. But we can’t do any of this without the best faculty and students. We simply need to be more competitive, and this needs to be our top priority.

We also need to attend to our physical campus. Of course, we fix the things that break on our aging campus, but we are falling behind on renovating major systems. On top of that, we need more space for classrooms, laboratories, and faculty offices. In short, we are letting our facilities deteriorate to balance our budget.

Every administration faces the challenge of unfunded obligations arising from past contingencies. Past commitments to student loans without an ongoing funding source; an acquisition by one of our collections that has not been fully offset by philanthropy; buildings that we constructed to satisfy a strategic need without a secure funding stream for their operation. We are working to exercise better control over these situations.

All of these issues, and especially competitiveness in faculty compensation, come down to resources. This is a big challenge. To overcome it, we need a game plan. It is what the private sector calls a sound business plan.

One dimension of that plan will be a robust capital campaign, and we are already at work. As I said earlier, we had a very good year in raising $270 million. But we need to increase that, and we will. In addition, we need to make sure that our fundraising is focused on our greatest need: becoming competitive in attracting and retaining the best faculty and students. This will be the highest priority of the capital campaign.

We will undoubtedly need to rely on resources from tuition. Our students are not well served by a cheap education that has eroded in quality. And we must remember that we are still one of the great bargains in American higher education.

Part of the plan will be to continue to take the message of higher education—and of a great research university—to the Legislature and to the people. There is no greater engine for economic growth in Texas than UT. Our program of “Horns and Aggies: Together for a Change” focused on that issue, and it led to the Legislature’s adopting the Competitive Knowledge Fund. This fund rewards research campuses for generating external research dollars, not just for increasing student credit hours. It needs more robust funding, but it’s a start.

But we can’t just wait for others to solve our problems. The past two decades have taught us that we can’t pin our hopes on the Legislature to provide us with the resources that will enable us to compete at the very top of the American academy. There will be years when we fare a little better and years when we fare a little worse, but on average we have had slightly less than 2 percent in annual increases for well more than a decade. Two percent doesn’t even keep up with inflation. Lawmakers can be our partner, but we can’t leave it to the Legislature alone. For all the talk about the importance of higher education, there are too many demands on existing state budgets and too much political aversion to increasing state revenue. There is too much regionalism when the times demand that we think globally. And for some there is a seeming aversion to true greatness. It is true that we need predictable state support that recognizes the value of world class research and innovation, but we can’t simply sit back and wait for that to happen.

Instead, we also need to put our own house in order. We can’t merely lament why others don’t do more; we must do more ourselves. This means that we must align our own budgets and decision-making structures with our goals and aspirations. In my 20 months serving as your president, I have observed that we often espouse a goal, but wait to see if there is money left over at the end of the day to pursue it. There never is. Aligning our budgets and decision-making structures with our goals and aspirations will take focus, and it will take discipline. The portfolio of the new Vice President for Diversity and Community Engagement and the new decanal portfolio for undergraduate studies are starts in structure. But we now need to align our budget and budget processes with the paramount goal of becoming competitive with our peers in attracting and retaining the very best faculty and graduate students. That will take focus, and discipline, and even some pain.

In my first 20 months I have also come to have an even deeper respect for the Commission of 125 and it’s charge: “The University of Texas must create a disciplined culture of excellence that will enable it to realize its constitutional mandate” to be a university of the first class. A “disciplined culture of excellence.” I have learned to appreciate each word.

Excellence means that our greatest enemy is settling for “pretty good.” President Emeritus Peter Flawn recognized this in his “War on Mediocrity.”

Discipline means that, while we do need to pursue excellence in everything we do, we can’t do everything. If we try to do everything, we’ll become “pretty good.”

Culture means that no single group can bring about excellence and discipline. Excellence must be pursued and discipline must be exercised in every decision we make. Faculty, department chairs, deans, staff, and even presidents—we all must make excellence and discipline a habit.

In its second strategic initiative, the Commission of 125 called for strengthening leadership at the department and research unit levels. These are the academic units that are the building blocks of a great university. They are where the core missions of teaching and research take place. We need to empower visionary leaders so they can go beyond daily bureaucratic tasks and build excellence through long-term strategic decisions. These unit heads are in the best position to make most of the hard choices. We need to empower them with budgets and authority to accomplish that, and then we must hold them accountable.

We began that process last year by empowering the History Department with $1.3 million in new recurring funds. Chair Alan Tully and the history faculty have responded with their own strategic plan. This year the provost and I have been working with Dean Randy Diehl and Chair Liz Cullingford to establish a similar program for the English Department. We will announce more details during the semester.

This highlights another challenge that we and other universities face. A combination of circumstances—including external funding patterns—conspires against the humanities and social sciences at great research universities. We have used this situation to our advantage to build great programs in science and engineering, and we need to continue to do that. But no comprehensive university can be great without stellar programs in the humanities and social sciences, and we need to nurture them. The recent Decherd and Moroney gifts to our colleges of Liberal Arts and Communication will help, as will current plans for a new liberal arts building.

Empowering department chairs and research unit directors to make the hard choices that will make us more competitive will also take discipline and focus in our overall budget. And, as I have said, we face challenges in our overall budget.

But we also have an asset: our size and our scale can work in our favor if we have the will to use them. Our budget is more than $1.9 billion. If we have the discipline to establish our priorities and to make a commitment to the initiatives that can transform the University, then we can partner with our donors, our students, and the Legislature to fund them.

If we are willing to reallocate even one percent of our budget, we can self-generate funds for strategic programs like competitive faculty salaries. One percent of $1.9 billion is $19 million! That’s just one percent! That’s not zero based budgeting. It’s not even 90 percent based budgeting. It’s 99 percent based budgeting. In five years that would generate $95 million in recurring funds, or the equivalent of a $2-billion endowment. Over a seven-year period—the typical duration for a capital campaign—it would generate $133 million, or the equivalent of a nearly $3-billion endowment. We can accomplish a lot with $133 million if we have the will to direct these resources to where they will do the most good—as every successful organization does. But that money will not be available if we don’t carve it out first. We can’t ask our partners to participate in building our institution unless we participate as well.

In addition, we must manage our endowments effectively. Some endowment income goes unspent because we are waiting to make a strategic faculty hire, or waiting on a building that is yet to be constructed, or searching for the right scholarship recipient. But sometimes it is just more convenient for deans, chairs, and faculty to build endowment account balances. Some of those resources can be used to fund competitiveness. But it will take focus and discipline.

My question to you is this: Are we willing to make sacrifices to pursue our larger aspirations? With respect to our budget, do we have the will to direct it to our most pressing needs for greater faculty and graduate student competitiveness? I need your help to achieve this. It can’t be done without the support of the deans, the department chairs, and the faculty. But with your help, we can focus our budget and achieve our aspirations.

To help me reach these difficult decisions on strategic planning and budgets, I have established a new council, the Policy and Planning Advisory Council. This group includes leaders from all our major campus constituencies: faculty, deans, department chairs, administrators, students, and staff. In many ways, the council will function as a cabinet, and it will have to face the challenges I have described. It won’t do this alone. It’ll work with the Dean’s Council, the Faculty Council, student leaders, and administration. Its charge is to confront our financial challenges and recommend a game plan. Like the undergraduate curriculum, this will be an ongoing process, and in its details it will raise controversial issues. Hard choices always do. But without facing these challenges head on we won’t succeed. And I have great confidence that our campus is up to the task, just as it has been with curriculum reform.

In closing, let me return to my beginning. In my view, we can be extraordinarily proud of our success this past year. We continue to excel in teaching and research. We continue to excel in the very top tier of research universities. We remain poised to become the great public university of our time. But we won’t get there unless we openly confront our financial challenges. We won’t get there without focus, and discipline, and courage. And we can’t wait for others to help us. We must do it ourselves. Together, we can succeed, if we have the discipline, the focus, and the fortitude. I ask you to help make that happen.

Thank you.