The University Record, October 19, 1992

Salary program a high priority in budget request

In discussing the University's 1993--94 state budget request with members of the Board of Regents last week, U-M officials underscored "the special role played by research universities, and the U-M in particular, as a `direct' force for economic development and growth, besides its basic function of training tomorrow's citizens and leaders."

They urged that "this special additional role, this ability to multiply the state's support many times over by attracting external resources, highly skilled people, and new industry, be considered when state appropriations are made."

The Ann Arbor campus is requesting an increase of $25.3 million in state funding for next year. The requested increase is made up of three components, Provost Gilbert R. Whitaker Jr. said:

(1) "An additional $8.2 million, or 3 percent, to help us prevent this year's salary freeze and other budget restrictions from doing permanent damage to the University's ability to retain the outstanding and highly mobile members of our faculty and staff on whom the University's excellence depends.

"This year's state funding increased by only $271,000, far less than our request. This shortfall in state appropriation and other revenue declines required a very broad-based approach---`shared sacrifice' approach---to offset the revenue losses.

"A tuition increase was only part of this approach. Every unit was asked to accommodate a 2.5 percent reduction in its base budget. A Universitywide freeze was imposed on all but the very lowest salaries.

"This last step was the most painful and potentially the most dangerous. A one-year freeze on salaries can be accepted as one element in a broad-based response to a serious short-term revenue shortfall; it cannot be part of a long-term strategy. For this reason we have made a general salary program one of our highest priorities for 1993--94.

(2) "An additional $9.2 million for the incremental cost of operating new or newly renovated academic space and of improving the level of maintenance for our existing physical facilities.

"Additional state funding has traditionally been provided for new academic space and for maintenance of physical facilities. But in recent years the state has broken with this tradition. We urge the state to return to its tradition of providing support for facilities.

(3) "At this time our best estimate of the rate of increase in the Higher Education Price Index is 2.9 percent for next year, and we are requesting an inflation adjustment of $7.9 million."

Whitaker noted that "several other areas of great importance will require additional resources. The most critical of these is the continuation of our successful programs designed to increase the diversity of our faculty. Another area to which we attach a high priority is that of student financial aid. We have long prided ourselves on providing aid packages designed to be adequate to meet the need of all of our Michigan resident undergraduates, but there are many aspects of our aid offerings, for these and for other students, that we would like to improve.

"The continued improvement in the educational experience we offer to our undergraduate students is another area of particularly high priority resource needs. Finally, as Michigan is increasingly caught up in the winds of political, economic and social change around the world there is a rapidly growing need for leaders who can grasp the implications of these changes. We have responded to this need by making the `internationalization' of our programs of instruction and research an increasing priority in recent years, and we expect to maintain this extra effort for some time to come."

In addition to budgetary strategies, the University has also strengthened its efforts to improve the management of its existing resources, Whitaker pointed out. "Our most notable effort in this area is our M-Quality program, which is based upon problem-solving and remedial action at the lowest possible level in the organization. The primary aim of M-Quality is to achieve continuous improvement in the quality of our activities through the active and knowledgeable involvement of every staff member.

"The most important outcome, even in the short-run, will be a greater efficiency in the use of our existing resources and an improvement in the overall quality of the institution, as perceived by all of our constituents---students, alumni, legislators and citizens of the state of Michigan, among them."

Whitaker concluded: "The coming year will be a difficult one for Michigan's legislators and administrators. The slow recovery of the economy and the many competing needs for the state's limited resources will present our political leaders with an extraordinary challenge. But it is vital that our leaders recognize the centrality of the role played by human resources in the growth of our economy, and the importance of education in the development of those human resources."