January 14, 2009
The UW and the economic downturn
Dear UW Alumni and Friends:
Of all those in our state, UW alumni and friends need least to be reminded of the value of education and a degree from the University of Washington. Therefore, it’s been no surprise that many of you have contacted me in recent weeks with concerns about the weakening economy and its impact on your University. I write now to let you know about the serious challenges the UW faces in light of the severe economic conditions and about some of our efforts to deal with them.
This is an extremely critical time for the future of our state. The economic downturn comes at a time when demand for higher education is at its highest. Last year, for example, we had the largest number of applicants to the University in our history — 20,000 for about 5,500 slots in the freshman class. It looks as if this year we will break that record.
The national — indeed, global — economic downturn has hit our state hard, and revenue projections for the 2009-11 biennium have fallen dramatically. In December, Governor Gregoire presented her proposed budget for the biennium, which by law must be a balanced one. Writing a budget with nearly $6 billion less in revenues is a daunting and difficult task. The Governor and her staff worked very hard to protect vital core areas of state government, including higher education. But ultimately, virtually all parts of state government saw significant cuts in the Governor’s proposed budget, including higher education and the University of Washington.
The Governor’s budget proposes a 13 percent cut for the University, which translates to a $116 million reduction for the 2009-2011 biennium. This cut comes on top of a 4.25 percent cut — $17 million — we have already taken this year. In the face of this extremely difficult budget proposal, we are working very hard in all of our schools and colleges to stretch our dollars and reduce costs in order to maintain the level of quality our students deserve. We have begun by focusing on administrative costs, reducing expenditures wherever we can. The academic deans have also begun working hard on cost reduction. For instance, we will be changing the way students can meet foreign language requirements, reducing costs and making it more productive and meaningful for students. This is an initiative that emanated from our language departments themselves, and it is the kind of thinking we need to meet the challenges we face.
But the hard reality is that cuts of this magnitude would mean the loss of hundreds of positions at the University. Ultimately, this would mean fewer faculty to teach students, fewer advisers and other services, and an overall decline in the quality of the UW educational experience. The bottom line is that with less funding, we simply will not be able to educate the same number of students at a time when more of them need and want higher education.
The Washington State Legislature convenes this week. The task shifts there to continue the budget-writing process and eventually — sometime in the spring — come up with a budget for the state. The University’s highest legislative priority will be to protect our ability to offer a high quality education to the citizens of our state.
We will be working very hard in the coming months to convince members in the Legislature to do everything they possibly can to minimize the budget reduction for the University. Reducing general fund support will of necessity create pressure to increase tuition, which, while it certainly cannot make up for cuts of this magnitude, can help soften them. Incidentally, UW tuition and fees this year stand at $6,800, the lowest among our peer universities. The Legislature is responsible for setting tuition for undergraduate resident students, and I expect this will be part of the equation to solve our funding dilemma.
We have other items on our legislative agenda, including increased flexibility in managing some areas of the University, as well as accelerating a number of capital projects for academic buildings that would also serve as an economic stimulus for the local construction industry. We are hoping to advance the timeline for construction and renovation of many critical academic buildings, including molecular engineering, the replacement of Balmer Hall for the Foster School of Business, the third phase of South Lake Union for UW Medicine, and a number of others. But by far, our top priority is protecting the University’s budget. Doing so will help us navigate through the next two years and—perhaps even more importantly—help us emerge from this period well positioned to continue to contribute to our region’s economy and quality of life for years to come.
Finally, I want to say a word about Husky Stadium since many of you have asked about it. Those of you who attend events in the 90-year-old stadium know that it is sorely in need of repair and renovation. Because King County tourism taxes created to fund the debts on Safeco and Qwest Fields will have paid off those debts sometime between 2013 and 2021, there may be an opportunity to use those revenue streams to help pay for fundamental safety improvements. None of the funding we seek can be used for academic buildings, and none of it comes from the state’s general fund. Normally, seeking funding in tight economic times for the stadium would simply not be on our list of priorities. But by issuing debt now, we could do the project, create 5,000-7,000 construction jobs, and still have no negative impact whatsoever on the 2009-11 budget. We believe it is worth considering and would benefit the state economy now and the University for decades to come.
This period of economic uncertainty is difficult for all of us. But with focus and hard work, the UW can be well positioned to help lead the state back to prosperity and continue its march toward academic distinction. Let’s hope we all see real signs of an economic turnaround in the new year. We will do all we can here at the University to contribute to it and to ensure that generations of Washington students continue to have access to this remarkable institution.
Mark A. Emmert