Budget 2010

Transcript for Video Message from President Barker — November 10, 2008

For the past three weeks, we have been working to find ways to deal with state budget cuts of nearly $25 million. This is an enormous challenge, and our approach has been to see it as having three distinct stages.

First, we must handle the immediate crisis and balance this year’s budget. This will require a mix of recurring and non-recurring funding.

Second, before July 1, we must replace all non-recurring funding with permanent dollars. Our decisions about how to manage next year’s budget can and will be more strategic, because these actions will ensure that we emerge from this crisis as a stronger university.

Third, we must accept the harsh reality that we are going to continue to see state support for higher education decline, and we must position Clemson University not just to survive but to thrive in such an environment.

Let me start by recapping the actions we have already taken:

Education & General Public Service Activities

1st cut (July) — $3.02M (E&G) Budget — $1.23M (PSA) Budget
2nd cut (Aug) — $3.33M (E&G) Budget — $1.54M (PSA) Budget
3rd cut (Oct) — $10.70M (E&G) Budget — $4.98M (PSA) Budget
Total — $17.05M (E&G) Budget — $7.75M (PSA) Budget
TOTAL: $24.8 MILLION

The first budget cut was managed by asking all departments to reduce their budgets, across the board. Most units reduced travel, eliminated vacant positions, and cut operating expenses.

With the second cut, we had to go deeper. We eliminated dual compensation, bonuses and raises, we froze hiring, cut non-essential travel, and eliminated more vacant and temporary positions.

Then we received a cut that was more than the first two put together – and it came nearly a third of the way through the fiscal year.. Further, on Friday, we learned that the Board of Economic Advisers has lowered its revenue estimates again, and the plan that we are announcing today takes that information into account.

In order to minimize negative impact on departments, especially academic departments, and on students, it is necessary that we take certain university-wide actions. In order to balance the budget this year, we must implement a mandatory furlough of five days.

According to the furlough proviso written for higher education, this must include all faculty and staff, coaches, deans, everyone – including me. However, this furlough will not include students. We will make every effort to offer individuals maximum flexibility within the limits of state and federal law.

You will find more information about the furlough on the budget impact web site. If the information does not answer all of your questions, please use the Web site to post questions, and we will respond.

At this time, we see this as a one-time action for this year only, but that could change if the economic situation continues to worsen and we receive significant additional cuts.

We also are delaying construction of the Academic Success Center, the innovation center and the life science building. Plans to build an information technology building, a turf research building and a core campus redevelopment project are being deferred indefinitely.

We have asked auxiliary units such as athletics, housing and dining services to make a direct contribution to help offset the state budget cuts.

We are planning an early-retirement program for positions with PSA funding.

After careful consideration, we have decided that a mid-year tuition increase would not be wise.

Most of these actions represent suggestions that came from the faculty and staff – and once again I want to thank you for you response.

It is regrettable that we have to take actions that directly impact the Clemson family, but the severity of the budget cuts leave us with no choice. Those are the stage one actions.

Stage two of our planning process will take place between now and the end of the spring semester. It will involve substantial changes in many of the ways we do business, in the way we are organized, and in the programs and services we offer.

If we try to manage a cut of this magnitude by nibbling at everything, we could significantly damage the quality of our academic programs, and limit our ability to serve our students and other constituents. This is not about cutting: It is about realigning, restructuring and reprioritizing.

Just last week, we completed budget hearings with the vice presidents and other budget center directors, reviewing every activity and service in rank order of priority. This was a line-by-line review of all university spending, with the understanding that right now, everything is on the table. We are discussing consolidating programs where it makes strategic sense, restructuring to reduce administrative costs, making more programs self-supporting, and downsizing or eliminating some services and activities. Some of these measures may eliminate filled positions.

We also will be looking at ways to generate additional revenue from our academic, service and research “products” – which many of you have suggested. We have a significant investment in facilities, equipment and smart people – and we’ve got to leverage these assets to generate more funding.

For example, there have been many suggestions about increasing revenue from summer school and camps, professional development and continuing education, online courses, Maymester and a new Inter-mester in December. We are reviewing fees we charge outside clients for use of research equipment, facilities and labs. We’re going to take another look at the general education curriculum. We’re redirecting our private fundraising efforts to focus almost exclusively on scholarships, professorships and unrestricted funding.

We will be appointing a series of task forces to explore these and other strategies. It was necessary that the budget task force manage the immediate crisis, but it is time to engage more people in developing long-term solutions.

The third stage of our challenge is to develop a plan for thriving in this new economic environment. Our long-term goal is to be a public university that has meaningful state support but with significant regulatory relief that will allow us to be more entrepreneurial and flexible. Let me show you a graph that clearly shows why we need this kind of long-term strategy.

This graph shows how Clemson’s base E&G funding per student, adjusted for inflation, has fluctuated starting in 1971 to the present. And as you see, it has been mostly downward. There have been some years when it increased, but more recently, we have seen steady decline – to the point where our per-student funding today is the lowest it has been during this time period.

With this latest budget cut, our total state appropriation is now about what it was in 1997, and our education budget per student – adjusted for inflation -- is 40 percent less than it was in 1973.

This trend is very troubling. We can whine about this, or we can see this moment in time as an opportunity to re-invent our relationship with the State of South Carolina. If we can’t be appropriately funded, perhaps we can be given the flexibility to be more entrepreneurial and to operate more efficiently.

Rather than complain, we must find ways to make this environment work for Clemson. Let’s find a way to ensure that we will not find ourselves facing this kind of fiscal crisis in the future.

I have been encouraged and inspired by the way you have responded to this situation. I have seen Clemson’s spirit, determination and sense of community rise to the top. Because of that spirit, I do believe we can emerge as a stronger university.

Thank you for your commitment to Clemson.