President’s Report
Board of Trustees, February 6, 2009

Chairman Boyce, trustees, faculty, students, staff, alumni, and friends, good morning.

As we all know, the economic turbulence of these times is unparalleled in recent American and world history. The associated uncertainties give rise to great anxiety, and we at UVM are not immune from either the circumstances or our reactions to them. I nonetheless believe, with great intensity, that the University of Vermont is a strong and durable institution; that we are on a positive trajectory; and that, if we maintain our faith in and commitment to our shared values and goals, we will emerge from this troubling period an even more vibrant university.

I want to begin with a review of the budget situation. We had been projecting a $28 million budget gap we proposed to close on July 1 by drawing on approximately $8 million in reserves, generating $5 million in tuition revenue from an enrollment increase of 300 students, and reducing the general fund base budget by $15 million. As we have begun to study the recommendations deans and vice presidents have submitted for FY09 budget reductions—recommendations designed to bring spending and revenues more closely into balance—we are finding that the effects on personnel in filled positions and on key indicators of the quality of the academic experience for students and faculty are less dire than many of us had feared.

As to personnel, while there are routine non-reappointments of faculty every year—and that will remain the case—it appears there will be few if any purely financially driven lay-offs of faculty in the current budget plan. Instead, we now anticipate only the unfunding of vacant faculty positions—less than two dozen total vacant tenure-track, extension, and library faculty positions—and, even with those eliminations of vacant positions, average class sizes will increase only slightly, by about 5%.

The recommendations on staff positions also rely in part on the unfunding of vacant positions—again, less than two dozen in all; however, in the case of staff, there are also proposed layoffs that, if fully implemented, would eliminate as many as 60 positions. Let me be clear: even though the number of layoffs will in fact be fewer than projected, the impact of a job loss on the individuals affected cannot be minimized. We are deeply mindful of this human cost, and we have aggressive plans designed to transfer personnel into vacant positions within the University as well as to provide job search counseling and support.

We are still intensively examining the status of the budget and, consequently, all projections as to budget cuts are simply that—predictions based on still-evolving information. The recommendations that we have received from the deans and vice presidents have yet to be approved and the budget plan—which the Board must ultimately approve in May—is not yet final.

It is also the case that the budget process of the State of Vermont is far from complete. Because decisions about base general fund appropriations from the State may still be influenced by federal action and changing economic news, we plan to implement the budget reductions in two phases. In the first phase, we will reduce the general fund budget by $10 million of the $15 million target we set in December, when our State appropriation target for FY 2010 called for a cut far below our FY 2009 appropriation and when we had not yet seen the Governor’s recommendation of a 20% increase in funding for higher education. During this phase, the positions primarily affected will be the vacant faculty and staff positions that have been recommended for unfunding, but we will defer action on most of the layoff recommendations we have received. Once the status of the State’s recurring base appropriation to UVM is resolved, we will proceed—if necessary—with additional lay-offs. Although I recognize that the uncertainty caused by this phased approach has its own psychological cost, I have decided that this course is preferable to laying off individuals on the premise of a reduction in state appropriations that may be mitigated by any number of factors. We are, of course, very grateful to Governor Douglas for his recognition of the vital importance of higher education to the long-term well-being of Vermont, and we will actively support his efforts.

Turning now to the issue of key indicators of the quality of the academic experience for students and faculty, I know that apprehensions have been expressed about what will happen to class sizes next year. The deans have submitted to the Registrar class schedules for the fall semester premised on the budget actions they have recommended, and nearly 3000 sections—2,989 to be precise, as compared to 2,945 at the same time last year— have a stipulated maximum enrollment. The biggest increase in sections for fall 2009 is a 21% jump in sections of 11 students or less. Sections with 19 students or less also increase, by 2.7%. Sections with 19 or fewer students will increase by half a point as a percentage of all sections. At the same time, the number of large sections, with 100 or more students, grows by only 15 sections out of the nearly 3,000 sections on the planned roster of courses. These data demonstrate that we will, in fact, see more of the small sections valued so highly by UVM’s students and faculty and only a small increase in large classes (where of course excellent instruction also takes place). In short, these class size data show that we can reduce spending while maintaining the element of academic quality represented by a good balance of smaller and larger classes (please see Table 1).

Other key quality indicators also support my confidence in UVM. The year-to-date total of awards of grants and contracts through the Office of Sponsored Programs was up at the end of the first two quarters from $61.3 million in the first half of FY 08 (almost precisely half of last year’s total) to $73.3 million in the first half of FY 09—undoubtedly in part an issue of the timing of several large awards but still auguring very well for UVM’s at least holding its own in a very tough funding environment. We know that our continuing success in competitive grant-seeking is a significant index of the scientific and scholarly power of our faculty, that the quality of academic programs and the distinction of the faculty are among the top five motivators of college choice for undergraduates applying to UVM, and that linkage is borne out in our enrollment management data.

Vice President Lucier will comment on enrollment data when he reports to the Educational Programs and Institutional Resources Committee, so I will just say that my confidence in UVM’s ability to ride out the perfect economic and demographic storm is buoyed by a record number of applications (over 22,000), with climbing SAT scores (up 10 points on the critical reading and math scores among early admits and up 27 points in that cohort including the writing score—and up 9 points on critical reading and math and 11 points overall in the total applicant pool), and record numbers of ALANA applicants, up 22%. Meanwhile, the differential between spring and fall enrollment, normally between 500 and 600 students, has tightened up to a little over 400, the number of Vermont undergraduates this spring is the highest in 16 years, and the number of non-resident undergraduates is the highest ever.

Six and a half years ago, we renewed discussions about launching an Honors College. The successful launch of the College has been one of the keystones of the invest-and-grow strategy; it has invigorated the intellectual culture of our students and has energized the growth in the quality of our increasingly diverse and multi-talented student body. That growth in turn has not only helped us to adjust UVM’s economy of scale to the unusual complexity of our small research university, but also has supported significant gains in faculty and staff salaries, in the number of jobs at UVM (nearly 400 faculty and staff positions have been added in the last half dozen years), and in programmatic richness.

I would point, for example, to faculty salary gains against the moving targets of rising salaries at other public doctoral universities as a signal feature of UVM’s rising competitive metabolism. Faculty salaries for continuing faculty are up by about 40% since 2001-2002—the first year of the first faculty salary contract, negotiated, approved, and implemented retroactively after my arrival. Salaries have increased by 40% for full professors, by 39.5% for associate professors, and by 42.6% for assistant professors (see Table 2). The total salary base for deans and other senior administrators has gone up by about the same percentage in the same period, 41.9% for all deans (including in the calculation not just continuing deans but new appointments in Continuing Education, Education, Engineering, Extension, Honors, and Medicine) and 41.2% for vice presidents (including all new hires and all new positions), with most continuing administrators having advanced between 21% and 23% over the course of seven years, about half the rate of salary increases for continuing faculty (see Table 3).

Although UVM has made many advances in recent years, to stand still in these times—where the pace of change is breathtaking—is to fall behind and court failure. To be truly competitive, we must examine how we organize and deliver our academic programs and how we can be more effective in producing academic excellence. I have, therefore, appointed a working group charged with doing just that in the interest of promoting enhanced faculty and student success. I look forward to receiving the recommendations of the working group and to engaging the University community in consideration of options. I also await with great interest the outcome of the Governor’s new initiative, under which a Task Force will review opportunities for enhanced integration of higher education in Vermont.

In closing, I say this: we cannot allow our fear of change—which will occur whether we respond passively or actively—to incapacitate or divide us at this critical time. We must have confidence in our strength, which we derive from each other as members of a community, and believe in our future. I ask you to join me in doing so.

Thank you.