Edward J. Ray, President, Oregon State University
October 14, 2010
I appreciate the invitation of the President of the Faculty Senate and the members of the Senate to come before you today to discuss the state of the university and describe how we will meet the challenges and opportunities that we face during the current academic year at Oregon State University.
When I last saw many of you at the June Budget Forum, it was in the context of the request to the Legislative Emergency Board to allow OSU and other campuses of our university system to spend tuition dollars on our individual campuses. I indicated that, assuming the emergency board of the legislature released funds we had on hand, primarily from tuition dollars, for us to spend this academic year, we could meet the budget cuts that the state had just announced and the projected additional 15% in state funding cuts anticipated during the 2011-13 biennium without any additional lay-offs, or furloughs and no double-digit tuition increases. Moreover, I indicated that given access to all of the funds that we generate over the next three years we will continue an aggressive program to hire new faculty in the four divisions that encompass the arts and sciences and professional colleges, create and improve classrooms, address chronic ADA needs across campus, enhance IT and research infrastructure and continue progress toward building a more diverse community in which we retain and graduate students from all backgrounds at higher rates than ever before. I said we could realize that agenda and end the 2013 fiscal year with a fund balance of between 5-10%.
While we are faced with a weak economic recovery in Oregon and the nation this year and beyond, I want you to know that we will make it through this biennium with no further furloughs, no layoffs and no double-digit tuition increases, invest in critical campus priorities, and project being able to manage similarly through the next biennium as long as we are able to retain and manage our own resources. If you take nothing else away from today’s discussion, I hope you’ll leave with the fact that the financial state of our university is sound.
There are a number of financial bright spots. At the end of the last academic year, research grants and contracts totaled $275 million, representing a doubling of such activity over the last 10 years. Financial support from friends and alumni of the university totaled $607 million toward our Campaign for OSU goal of $625 million. Enrollment at OSU reached 21,969 last year and is expected to approach 24,000 this year. While increasing enrollment strains our energy and capacity at the university, it also reflects that this university is a destination of choice for discerning students.
Governments at all levels, industry partners, and foundations have also voiced their confidence through record dollar amounts to support our research and creative work. Donors provided us with over $92 million in support for faculty, staff, students, facilities, equipment, and programs last year, representing the second most successful fundraising total in the history of the university. Record numbers of students from Oregon, the nation and the world are enrolling in our programs because they know that they can realize their dreams for success both in the workplace and in service to others.
The Cascades Campus too is experiencing substantial enrollment growth and is generating considerable community interest in its signature programs. Under the leadership of Becky Johnson and with an outstanding partnership with Jim Middleton, the president of the Central Oregon Community College, the Cascades Campus is poised to launch a significant fund raising effort and sustain substantial long term enrollment growth. The Cascades Campus is celebrating its 10th year with record enrollment, a focused and strong academic base, and greater potential than ever before.
Still, we are faced with a weak economic recovery in Oregon and the nation this year and for some time to come. This is causing a deteriorating state revenue picture, and perhaps worse, uncertainty in Salem and around the state. We are now told that there may be an additional 5 to 10 percent budget cut yet this year, and perhaps 25 percent in state budget cuts for the next biennium. Even so, we still have capacity to meet the goals that I outlined last June and to do so while maintaining an appropriate fund balance.
One area in which we are at great financial risk and the path forward looks particularly difficult is in our statewide outreach and engagement programs – The OSU Extension Service, Agricultural Experiment Station, and Forest Research Laboratory. Since our founding as a land grant university, these programs have played a vital role in fostering and sustaining economic opportunity and growth throughout the state. We have a special and unique responsibility among the public universities in Oregon to sustain those programs on behalf of all of the people of Oregon. Funding for the statewide programs is separate from the general funding provided to the university for instructional purposes, but the programs themselves are an integral part of the instructional and research capabilities we have on campus. We will carry that message forward but I am very, very concerned about our continuing ability to sustain our excellent statewide service effort across the entire state.
Sources of Financial Strength
The sources of our financial strength despite reductions in state funding are ones we discussed over the last two years. A major positive on our ledger has been the remarkable growth in research grants and contracts by our faculty under very difficult conditions. The financial support of friends and alumni and foundations through the campaign for OSU has been extraordinary during these uncertain times. The more than $100 million raised for scholarships so far in the Campaign for OSU have helped us provide talented but resource poor students the opportunity to pursue higher education through programs like the Bridge to Success, which provided 2,900 of our Oregon undergraduate students access to OSU with no tuition and fees last year.
Also on the positive side of the financial ledger is the rapid growth in overall enrollment in the last two years, especially the growth we have seen in non-resident undergraduate students from across the nation and around the world. Whether or not the enrollment of U.S. non-resident undergraduate students will continue to grow as quickly in the next few years is not clear but international student enrollment is expected to continue to grow rapidly, in part, as a consequence of our partnership with INTO.
While I believe the financial state of the university is sound, a number of the steps we have had to take to address our financial needs have strained the social fabric of our community. Some of these steps have been of our own choosing while others have been imposed upon us. I believe the most important step we can take now is to address the stress that many of us are experiencing and I have a number of proposals to do so going forward.
Addressing Community Stress
Community is one of the most powerful ways we express our commitment to a shared direction and our investment in supporting our colleagues. By being a stronger community we will add power and substance to our commitment to diversity, create a climate in which risk taking will be encouraged and new ideas can flourish, and affirm that we are an open and welcoming university. Again, I believe the most important step we can take now is to address the stress that many of us are experiencing.
Our favorable financial bottom line as a university was earned in part by eliminating positions and asking remaining colleagues to do more, despite the fact that they got no raises and were forced to take furloughs. We took crowded classrooms and made them even more crowded. We eliminated or moved many local staff positions and created regional business centers in their place. We believe that the business centers can help us manage costs and improve critical services but those benefits require further improvements in the performance of the centers.
We created a narrative about focusing our educational and research capabilities in three signature areas and created divisions for colleges aligned with those areas. The effectiveness of conversations and collaborations within those divisions has varied significantly and some divisions still struggle to find common ground. We need to continue that drive toward focus and excellence. Inadvertently, and I take primary blame for it, some of our colleagues in the arts and sciences believe that they have been marginalized and that their role has been reduced to serving as foundation course instructors for programs in the three signature areas. Strong programs in the arts and sciences are critical to basic inquiry and research, to the success of the signature programs, and to an engaged student learning experience. As I explained to one colleague, the success we seek in the signature areas will only be possible if the arts and sciences are recognized as essential in their own right and if selective programs are vibrant and successful.
Perhaps I have not said this often enough and clearly enough but I have said since I came here that there are no great universities that are not outstanding in the arts and sciences. We have pockets of excellence in the arts and sciences but I believe we have under-invested in them in the past. We need strength in the arts and sciences for the success of our students and as a solid foundation for our overall excellence. Recognizing this need, we have committed to add 50% of the new faculty positions over the next two years in the Division of Arts and Sciences. These faculty will join current Arts and Sciences faculty providing excellent education, research and scholarship in areas ranging from mechanisms and causes of cellular change to inquiries into social-cultural dimensions of human behavior and to creative writing.
Words to Action
When I had the privilege of speaking to you last year I provided a snap shot of what Oregon State University might look like in 15 years if we can remain on course to become a top ten land-grant university over the next 20-30 years. The profile I presented drew a less than positive reaction to the possible size of the institution, a reaction that I understand given the budget situation at the time. The profile was not a promise or a prediction but a reference point to measure ourselves against as we approach 2025. I urge you to review that profile again in terms of the mix of undergraduate and graduate enrollments, the diversity of students, staff, and faculty, the level of annual fundraising and research grants and contracts, the levels of first year retention and six year graduation rates for students from all backgrounds, the number of faculty and the significance of university and industry research partnerships. The numbers are daunting. Yet, who would have believed that we could double our annual funding through research grants and contracts in 10 years or easily exceed a first fundraising campaign goal of $625 million?
What is most important is the action plan that we put in place to move us in that direction. I want to go beyond the words and pictures of the future today and describe how we will continue to work toward financial sustainability in uncertain economic and political times, how we will begin to address the strain on community well being, and how we will begin to move toward key aspects of the profile for 2025.
The pieces are already in place to continue to perform well in terms of revenue growth for the university. At the end of September the Campaign for OSU had raised $620 million and I expect to make an announcement later this month on extending the campaign for at least two more years and raising the campaign goal substantially. This campaign, which many of you have contributed to financially, is succeeding beyond anyone’s expectations and is remarkable for a first university-wide fundraising campaign. More than 2,700 current and former employees of Oregon State have contributed nearly $11 million to the Campaign for OSU.
We will continue to see enrollment growth over the next three years at rates that are more moderate than the growth of the last two years but we will continue to attract students from Oregon, the nation and the world. Growth in international enrollments in partnership with INTO will continue to benefit our revenue raising capacity for at least the next several years.
As extraordinary as our research funding performance has been in the last decade, we need to do more. Our new vice president for research, Rick Spinrad, is working with colleagues to provide even more focused support from the Office of Research in enhancing our internal research processes and faculty support and in working with government, industry, and foundation partners to increase research funding in ways that advance our standing in the signature areas including the core arts and sciences programs.
On the political front we will continue to argue for the right to access all of the tuition and other funds that we generate without the legislature taking money from our accounts to balance budgets elsewhere in the state. We will also work with the Board of Higher Education and colleagues within OUS to move the OUS to the status of a state-wide public university system rather than a state agency. Our conversations with the Board will include future budgeting, performance and accountability for Statewide Public Service Programs.
Building a Stronger Sense of Community
Again, as I indicated in June, if we can be left to manage our existing resources efficiently and keep the resources that we generate over the next three years, we can accommodate the reductions in state funding that are anticipated and avoid additional lay-offs and furloughs. We have now implemented each of the seven regional business centers at the university but we will continue to strive for better performance through more effective training processes and user suggested service improvements.
To address the overcrowding in classrooms we have taken several actions. First, we have continued to upgrade existing classrooms remodeling 38 classrooms last summer. The Linus Pauling Science Center, Education Hall, the International Living and Learning Center facility will open and additional improvements in over 50 classrooms will be made by next autumn. In addition, the Student Success Center will be completed by autumn 2012 and the Haley Ford Center for Families and Children will be completed by summer 2011. We are close to fundraising $25 million for a new college of business building so that we can request an XI-G match from the state to construct a $50 million building. While several years off, that building will add to our instructional capacity too. Furthermore, we are pursuing new funding strategies to expedite our ability to construct new instructional buildings on campus.
The provost’s authorization to hire 30 new faculty with 15 positions going to the arts and sciences and 15 positions going to the other three divisions will help us in achieving our educational goals. Hopefully, those searches can move forward quickly. The provost has released $2.5 million in funds primarily to the Colleges of Liberal Arts and Science for additional hires this year to reduce the instructional burden on current faculty, particularly in the foundation disciplines core to all undergraduate education and in selected baccalaureate core areas. We anticipate authorizing an additional 30 new faculty positions next year.
The provost and I have agreed to invest additional resources this year in two critical areas: advising and graduate student recruiting. The provost will announce plans and the process for deployment of these resources shortly.
Several years ago working with this Senate, I approved policy changes that would permit academic units to provide their most distinguished instructors, clinical faculty and fixed term extension faculty who are on annual contracts, with extended fixed-term contracts. I encourage departments, colleges and divisions to consider offering extended contracts to colleagues who contribute significantly to their mission. Furthermore, I am concerned that the least well paid instructors may not be equitably paid for the critical work they do. In that regard I have asked the provost to review the salaries of instructors at the bottom of the pay scale on a case by case basis to determine if individual equity adjustments should be made.
In addition to the voluntary furloughs and the lack of raises that faculty experienced last year, the Governor has called for a wage freeze again this year. The financial picture I shared with you would also allow us to move forward with modest faculty salary increases next biennium. What can be done and when with regard to faculty compensation remains to be seen based on economic and political realities but I believe it is urgent to return to salary increases for all faculty as soon as possible. Being able to set faculty salaries at a competitive level is one of the benefits we are seeking in state higher education governance legislation next year.
Finally, it is important that we continue to develop a campus community that honors respect and civility. In our growing, changing and financially uncertain environment we have focused on immediate fiscal and capacity issues. To address the social dimensions of change we will focus on providing developmental opportunities for all levels of institutional leadership. Furthermore, I have authorized the creation of an ombudsperson’s office on campus reporting directly to me. The ombudsperson initiative is a strong acknowledgement that relationship challenges in a complex organization are inevitable, but we are committed to creating additional mechanisms through which we can address those challenges. Our commitment is to attend to strengthening the sense of community we have at Oregon State University.
Where to Begin (Moving Toward the 2025 Profile)
For this year and the next biennium there are three areas in which we must make substantial gains. The Campaign for OSU has been an extraordinary success and we must sustain the current momentum in philanthropic support for the university. Consequently, as I stated earlier, we will be deciding in the next few weeks whether or not to extend the campaign for OSU and what the goals of an extended campaign will be financially and programmatically.
Secondly, we must have continued targeted growth in student enrollment at both the undergraduate and graduate levels and new faculty hires that represent the most promising and diverse groups possible from Oregon, the nation, and the world. Enrollment growth will only be meaningful if we can substantially increase our first year retention rates and retention through to graduation for all demographic groups of students. Those efforts will be aided by our breaking ground for the new Native American Cultural Center this autumn and building the new facilities for the other three cultural centers in the next three years. The work of Susie Brubaker-Cole and others to improve the first year experience will be crucial for success as will your work to improve the baccalaureate core as part of overall discipline-based curriculum enhancements. The Faculty Senate unanimously approved the Learning Goals for Graduates at its June 2010 meeting. These learning goals encompass the broad overarching standards that our undergraduates will achieve through curricular and co-curricular activities and engagement. I expect these goals to enrich and refine the baccalaureate core and discipline based curriculum.
Finally, we must continue our extraordinary success in raising support through research grants and contracts and particularly in the area of industry-university partnerships. The twenty-first century mission of this land grant university is, as it has always been, to benefit the people of Oregon, the nation, and the world, through our teaching, research and creative work, and our outreach and engagement activities. Much of that service must now come from inventions, innovations, and new ideas that find their way to the market place quickly through collaboration with business partners to create the jobs and family wage incomes that are so desperately needed in these difficult times.
In pursuing these objectives, we must build a stronger community that honors and exemplifies OSU’s values of respect, diversity, integrity and social responsibility.
I began my comments today by noting that the financial state of the university is sound. That is no small accomplishment as we crawl out of the worst economic recession since the Great Depression of the 1930s, and I ask you to remember this if nothing else from this speech. A lot of smart and some very hard decisions have been made to get us to this point financially. I also noted that the fabric of our community has been strained during this transition period and I described some of our plans to address our needs as a community too. I hope the second point you will take away from this presentation is that we will improve the state of the university in the fullest sense beginning now. Financial security and a sense of common cause, which derives from a vibrant and cohesive community, are both critical to realizing the potential of this wonderful university.
I look forward to working with each of you to pursue progress on both fronts. And, as always, I thank you for the opportunity in allowing me to speak today and for your attention.