President Mary Sue Coleman calls for more cuts to University of Michigan budget
Even as she announced a need for the University of Michigan to cut another $120 million out of its budget by 2017, U-M President Mary Sue Coleman said she’s still counting on having some sort of state support for the university.
“I haven’t given up on state support,” she said during her annual State of the University address on Wednesday afternoon. “I will be advocating as hard as possible.”
But, she quickly added, she’s not going to sit around and not make cuts while waiting for more state money.
To that end, she used a portion of her speech to address the budget crunch.
“Over a six-year period, ending in 2009, we reduced our general fund spending by $135 million,” she said. “We are on a more intensive track to reallocate another $100 million by 2012, and our progress is good.
“Because of economic forecasts and a decline in state support that we do not expect will reverse any time soon, we now know that we must identify another $120 million in savings by 2017.
“As we have been, we will be deliberate and thoughtful, focusing on reducing administrative and operational costs, with an eye firmly on enhancing the academic mission.”
University of Michigan President Mary Sue Coleman delivers the State of the University Address, Wednesday afternoon from Stern Auditorium inside the University of Michigan Museum of Art. Lon Horwedel | AnnArbor.com
College officials said that through 2010, the college has cut bout $24 million of the $100 million targeted to be cut through the 2012 fiscal year. That means that the university is looking at cutting a total of $196 million from now through 2017.
The university’s general fund expenditures for fiscal 2011 are budgeted at $1,553,245,285. That means $196 million represents 12.6 percent of that budget.
“Of course we can’t cut our way to the future,” she said. “We also intend to increase our revenue (through alternative sources).”
In her nine-page speech that lasted slightly more than a half-hour and in her response to a few questions from the audience afterwards, Coleman touched on a number of topics, including:
- Responding to a question about construction in the health system, she said, “We can’t expect faculty to work in in substandard facilities. We just can’t.” She pointed out that’s a major reason for the construction across the entire campus. She also said, “At some point in the future, we’re going to have to address the main hospital.”
- Responding to a question on using animals in Survival Flight medical training, she said that the training would “continue to do so as long as they (the physicians who run the program) feel it’s the best way to teach those skills.”
- She also said that the university has hired 25 new junior faculty and approved funding for 70 positions as part of an effort launched three years ago to hire 100 junior faculty “committed to interdisciplinary teaching and research that explores the truly complex issues of our day.”
- She said that this year’s budget includes funding for 50 tenure-track faculty. She said “several” of those positions are dedicated for “post-doctoral fellowship positions that lead to faculty appointments in the science, technology, engineering and math disciplines.”
David Jesse covers higher education for AnnArbor.com. He can be reached at davidjesse@annarbor.com or at 734-623-2534.
Comments
leaguebus
Tue, Nov 9, 2010 : 11:41 a.m.
To all the naysayers, do you realize how many jobs the $1 billion UM research budget creates. Rick Snyder should be so lucky to have a billion dollars to spend to create jobs. The goal of the U is to double the research budget in 5 or 6 years. This is another bunch of jobs for the area and the state. As Todd said, Harvard is borrowing money to pay their general fund expenses because they have use their endowment for this purpose. UM has not done this and never will do this. At the same time, all the researchers/faculty that UM has lost to the big spending California and private Universities like Harvard are now looking at UM again because we can use our endowment to lure them back and the laboratory space exists to house them (Phizer). The UM is not a perfect institution, there are plenty of things I don't like about it, but if job creation is the number one priority to us all, then UM does a great job. How many spin offs of UM technology exist in this area now, how many more will come later? Their goal is to be the largest research institution in the country, hopefully they will make it.
Killroy
Mon, Nov 8, 2010 : 12:32 p.m.
@ Edward R Murrow's Ghost, thanks for your insights. If I may add to your points, the University of Michigan plays an enormous part in developing scientific breakthroughs in gene research, preventive care, and developing cutting edge procedures designed to improve the quality (and extent) of life for many patients. If I may add to your points, the University of Michigan plays an enormous part in developing scientific breakthroughs in gene research, preventive care, and developing cutting edge procedures designed to improve the quality (and extent) of life for many patients. Some of the most cutting edge research is being done at the University and I would encourage this board to be a little more 'cognoscente' of the fact that this research is taking place, here, in Ann Arbor! Lets try to think a bit into the future and what this might mean for our state in coming decades, rather then trying to bring back the automobile industry and the glory days of the past which are gone FOREVER!
lordhelmet
Fri, Oct 29, 2010 : 4:51 a.m.
A good place to start would be a 10% pay cut for all profs, a 15% cut for Mary Sue, and the elimination of the UM football team's defensive coordinator.
JE
Thu, Oct 28, 2010 : noon
MSC gets a raise but must cut the budget. nice. MSC give back the raise THEN cut the budget.
ToddAustin
Thu, Oct 28, 2010 : 11:33 a.m.
There are some clarifications needed to the data presented above. The university, as it provides a service, rather than a physical product, sees its costs rise at a rate that tends to be higher than the rate of inflation for the economy as a whole. Conservatively, it's 3 percent, at a minimum. If you take the 2011 budget and extrapolate it out to 2017 at that rate of growth and then compare the total $196M reduction against it, you see that it comes to something more like 10.5% and represents a reduction in the rate of growth, rather than an outright reduction in the budget. Half a century ago, the state contributed a majority of the university's budget. That has not been the case for some time. The state has been holding the line (that is, reducing by the rate of inflation) or actively cutting the university's allocation for decades now. The state's contribution to educating its future leaders and best now amounts to about 20% of the total operating budget. As one part of the university's adjustment to that reality, tuition rates have gone up steadily. The amount spent on scholarships and grants has gone up at an even faster rate. Yes, the nominal price of the service is high. However, the full price is actually paid by a comparatively small fraction of the students whose families can afford it. Graduate students are often funded by grants, fellowships, teaching & research positions, etc. Those headed into the medical, business, and legal professions are most likely to bear the full cost, but they are also the ones most likely to pull in large salaries down the road that can be used to service the debt taken on. As one commenter noted, those who enroll in those high-cost programs have clearly decided that they are getting their money's worth. Several anonymous writers have complained here about the endowment. The majority of gifts to the university are restricted. That is, the donor has specified for what their gift may be used. The university has no discretion. When donor X donates $10M to build a building, the university can't use the money to pay salaries. Donors like to see their names on a plaque. It's just the way it is. Statements that the university lives off the interest from the endowment are erroneous. Several other high-profile universities were doing exactly that. Harvard and its Ivy brethren come to mind. When the market crashed, they suddenly found themselves with huge shortfalls in their operating budgets. U-M was wise enough not to allow itself to depend on this unreliable source for operating expenses, and so has been less injured by the fluctuations in the market. Reductions have been underway for many years. Most staff receive annual pay increases that come well short of inflation and have for many years, effectively reducing their salaries. The cost of benefits, such as health insurance, to staff has been going up at a steep rate. Empty positions are not necessarily filled. Projects are underway across campus to find efficiencies of scale, reduce and remove redundant services, cut energy use, increase use of existing space (classrooms, etc.), outsource basic services that other companies can do the work for lower cost so that resources can be concentrated where value is added, and develop cutting-edge services can be provided to teachers, researchers, students, and staff so that the U stays at the forefront of education in the US and the world. The university is doing a rather exceptional job of living within its means. As a result, while other major universities struggle (e.g., the University of California system), U-M thrives and grows. The university provides scientific and human leadership to the entire state that is helping to turn it out of its long decline and it does so in a way that's careful with a nickel.
Carolyn
Thu, Oct 28, 2010 : 11:12 a.m.
Will her compensation be part of the budget cuts?
sbbuilder
Thu, Oct 28, 2010 : 9:59 a.m.
I agreee with SomewhatConcerned. That is what I was alluding to about the 'interdisciplinary research' stuff. That's just code for shifting monies from programs that are self supporting to pet programs that fulfill personal agendas.
Vance333
Thu, Oct 28, 2010 : 9:47 a.m.
1. Stop buying $1000.00+ oak desks 2. Use pine trim instead of oak trim in offices.(some pines are as hardy as oak) 3. Make employees drive their own vehicles, give standard milage compensation.(reduces fleet maintenance) 4.STOP TENURE IMMEDIATELY. 5.Remove redundant positions in all areas. 5 simple suggestions from someone who has never been educated in Finace whatsoever. Basically cut the waste! Simple really!
David
Thu, Oct 28, 2010 : 8:22 a.m.
Just go to: http://www.umsalary.info and/or http://data.michigandaily.com/tmdsal...and do the math
Somewhat Concerned
Thu, Oct 28, 2010 : 7:43 a.m.
Mary Sue Coleman's pledge to reallocate another $100 million is code for her desire to do even more of her take money from the successful programs and send it to the unsuccessful, expensive programs that are her pet areas (and that often turn out expensively-educated students who aren't qualified to make a living). Using the budget difficulties to take from programs you don't like and give their money to programs you do like is unworthy of a university president. But it's done at UM, every day. It's one of the reasons she often is referred to as "Kwame Sue Coleman" and is one of the reasons some major donors who still could make university-changing donations are holding back.
Sam
Thu, Oct 28, 2010 : 7:33 a.m.
I have a couple of ideas. How about the outrageos "match" to the employees 401K's at taxpayer expense, and her compensation over and above her salary! The "hidden" costs.
Marc
Thu, Oct 28, 2010 : 7:29 a.m.
Consolidation does not always result in savings. Check out this recent study out of Indiana: The Center for Evaluation and Education Policy, a non-partisan education policy and program evaluation center based at Indiana University, recently released the study, concluding that despite some legislative interest in mandating school consolidation, the results wouldnt benefit students and would have minimal impact, if any, on state spending on public education. http://indianaeconomicdigest.com/Main.asp?SectionID=31&SubSectionID=77&ArticleID=56597
SMAIVE
Thu, Oct 28, 2010 : 7:18 a.m.
All I can add to this line of discussion is lets be thankful the University is here. Otherwise this conversation, A2.com, the town and indirectly, most of our jobs, would not exist.
trespass
Thu, Oct 28, 2010 : 6:51 a.m.
Reporters need to question the propaganda they receive. When the UM cuts one line item in the budget but increases another line item more, they call it a budget cut. The general fund budget has gone up 40%, twice the rate of inflation, since 2002 (when the regents up for re-election began their terms). You also need to look at how they are "cutting" costs. For example, one cost "cutting" measure was to increase the amount employees paid for health insurance by 50%. One of the proposals for further "cost cutting" is to cut the healthcare insurance for retirees. This is not cost cutting it is just shifting costs to employees and retirees. Tim Slattow showed data on construction costs, in his Monday presentation to the faculty senate, that showed that construction costs in 2002 were less than $350 million but in the last 3 years constructions costs have been more than $600 million a year. When the UM recruited their current Chair of Pathology, they promised him a new building for the department. It is currently being built on the site of the old Kresge building at a cost of about $120 million. The general fund budget, that is funded largely by tuition and the state appropriation, contains about $400 million in research expenses. These contribute very little to the education of undergraduate students, so why should they and their families pay for research related expenses. The UM already receives more than $1 billion in federal research grants. Every election, the regents promise to limit tuition increases but they vote for budgets that have increased tuition 60% since 2002, three times the rate of inflation. I say vote out the incumbent regents and keep doing it until they keep their promise and control budgets and tuition costs.
AlphaAlpha
Thu, Oct 28, 2010 : 5:45 a.m.
"I'm not complaining." (Just so you know, it often seems you are.) Regardless. Do you have any ideas for possible solutions?
Evelyn Griffin
Thu, Oct 28, 2010 : 5:33 a.m.
In mind, GREAT LEADERS lead by example. She needs to step up and cut that salary of hers. If she would do that, a large number of people who are DOING THE WORK could rest easier knowing they don't have to "tighten their belts", made consessions, do 5 days work in 4 days, etc...all that we have seen happen in this state in order to afford this GREAT LEADER. Mary Sue..how about responding this this and all of the other comments on this page about your absorbant salary. EvieG
Nephilim
Thu, Oct 28, 2010 : 12:10 a.m.
So explain to me then if life is so rough for the U and they are in such need of state help. Why do they continue to mop up land and properties in the city? Why do they continue massive building projects? Yea, I love the fact my tax money goes to them. Everybody else is desperately hurting and now poor U of M has to try and cut their budget which all of you know is a big joke. I hate to let you in on a little secret ghost, but the U might as well be a private university since how many "average" families can even come close to affording to send their kids there? The only reason it isn't private is they want all these "average" peoples hard earned money.
a2citizen
Wed, Oct 27, 2010 : 11:28 p.m.
@Ed: That may not be THE question, but it is MY question. MSC and the flag officers you speak of are extremely well paid. And, having been in the military, I'd rather not waste space on a flag officers compensation package. My question is: If MSC took a $400k per year cut, she would still be making over $375k. Would she be able to live within her means?
UtrespassM
Wed, Oct 27, 2010 : 11:02 p.m.
Do our students get better education? when: 1.The enrollment sets record every year; 2.The tuition increase every year; 3.The class size gets bigger every year.
AlphaAlpha
Wed, Oct 27, 2010 : 10:28 p.m.
"One can only conclude that you like to complain--no solutions aside from wanting MSC to look in the mirror." Eddie - Respectfully, it's going both ways. Have you offered any solutions? What are your ideas?
a2citizen
Wed, Oct 27, 2010 : 10:19 p.m.
@Eds Ghost: If Mary Sue took a $400,000 pay cut she would still be making at least $375k per year. My question is: Would she be able to live within her means at only $375,000 per year? Hey A2 is expensive.
MjC
Wed, Oct 27, 2010 : 10 p.m.
Unfortunately, financial cuts at the University will likely mean more jobs lost. I wonder if the bad times in the State of Michigan are ever going to end.
peg dash fab
Wed, Oct 27, 2010 : 9:55 p.m.
Am I blind or did I miss the part where the reporter tracks down and reports the University's total budget, putting the relative size of the cuts in perspective? Oh yeah, this is the new wave of journalism. Reader, report thyself. (Ten clicks later...) FY09 total revenue: $5B. FY09 revenue excluding health system and other clinical: $2.8B. On to relativity... except the way the cuts were described is utterly opaque. It could mean one thing, it could mean another. Good thing we have such skilled reporters with their awesome command of data sources and the English language bringing us the facts. Enough sarcastic whining, right? Here's the money shot: $100M represents 2% of the total FY09 budget, and 3.6% of the FY09 budget excluding health system and other clinical. For the rest of the story: you do the math.
stunhsif
Wed, Oct 27, 2010 : 9:47 p.m.
I'll say it one more time because no one is listening: "live within your means".
stunhsif
Wed, Oct 27, 2010 : 9:29 p.m.
Wow, The Great one just told us in 500 words what could have been said in 4 words and those are: "Live within your means". Hum, my brother currently in grad school at U of M and paying 40 grand for one year so I have to a reasonable degree an interest in what tuition costs at the U of M. As well, my tax dollars support this school. One minor correction from previous post and that is the U of M does not "live off the interest of the endowment", I certainly wish it did because it then would be self supporting/self sufficient like those in the private sector. That is, unless the anointed one wants to bail you out as he did the UAW working for GMand Chrysler. Good Day No Luck Needed
David Frye
Wed, Oct 27, 2010 : 9:22 p.m.
Math correction. The article states: "[T]he university is looking at cutting a total of $196 million from now through 2017. The universitys general fund expenditures for fiscal 2011 are budgeted at $1,553,245,285. That means $196 million represents 12.6 percent of that budget." Yes, but that is 12.6 percent of ONE year's budget, spread out over SIX fiscal years. The relevant number is this: the cuts will amount to an ANNUAL AVERAGE of 2.1 percent.
sbbuilder
Wed, Oct 27, 2010 : 9:06 p.m.
committed to interdisciplinary teaching and research that explores the truly complex issues of our day. Riiiiiiight. Gotta kind of wonder what interdisciplinary research actually looks like. After they explore those complex issues, then what? Oh, yeah, I suppose this would be fertile ground for more grants from the Feds. Then they can go right on exploring those issues. Little bit of bad timing with the raise announcement. Coming out of one of the hospital parking structures, one of the attendants had some not so pleasing things to say about MSC's bonus, etc. Something along the lines of 'her raise is more than the pay of all of us attendants put together.'
stunhsif
Wed, Oct 27, 2010 : 9:01 p.m.
I agree with her comment about cutting the budget 120 million but that is about 1/3 of what they should cut. The bigger question is why did she accept a raise a couple weeks ago of 3%? She already makes well north of a half million dollars. And on top of that,she wants the state to give the U of M more monetary aid. What the H E double toothpicks is she drinking? Her University is sitting on billions of dollars of endowement money and she wants the state to give her more money. One suggestion Mary Sue if I may. Go look in the mirror and stare at yourself for several minutes. You need to get close and personal with yourself!
A2Dave
Wed, Oct 27, 2010 : 8:52 p.m.
Cut from the top. The layers of administrative management at U of M are embarrassing, with many Ex. VPs, VPs, Asst. VPs. Deans, Associate Deans, etc., ad nauseum. Like GM. At one time the British navy had more Admirals than ships--that is the way U of M admin is top heavy. Cut from the top.
scooter dog
Wed, Oct 27, 2010 : 7:54 p.m.
Hopefully rick snyder will put a cork in the bottle. State aid,what a farce.
johnnya2
Wed, Oct 27, 2010 : 7:46 p.m.
Lets not stop there, why not make one giant USA Police Force. One Giant USA Fire Department. One giant USA College president. Local control and issues are a local matter. There is a difference int he way UM runs as opposed to MSU, Wayne State or Northern Michigan. If 14 universities can not be sustained then I would prefer to see one closed as opposed to giving control to the state.
GreenEggsandHam
Wed, Oct 27, 2010 : 7:42 p.m.
Well at least Coleman got her 3% raise...please stop the madness.
DonBee
Wed, Oct 27, 2010 : 7:30 p.m.
I wonder what the reduction might be if the University administration was consolidated across the 14 Universities in the state? I wonder what would happen if the police department was consolidated with the Ann Arbor force and the Sheriffs department? I wonder what the outcomes would be if other services were consolidated with the local or county government? I have no clue what the answers are, but I have to wonder.