October 20, 2008

Skorton Addresses State of C.U.

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Despite national economic turmoil and threats of the worst financial crisis since the great depression, President David Skorton assured on Friday morning that Cornell is “not in a financial crisis.” Still, in his annual State of the University Address, Skorton emphasized the need for the University to revise its economic plan for its future in light of recent “stresses and strains that deserve our serious attention.”
Citing a 2.7-percent increase in the University’s endowment return for the 2008 fiscal year, which ended on June 30, Peter Meinig ’61, chairman of the Board of Trustees, described last year’s gain as a “significant accomplishment in turbulent times.” As long as the University’s fundraising campaigns continue to be successful, Skorton vowed to sustain his commitment to need-based financial aid, stating that he intends to make such a commitment the hallmark of his presidency.
“Our students are showing increasing financial need,” Skorton said. “Growing concerns about inequities implicit in our exclusion of international students from our need-based aid commitment compel us to make more money available for international need-based aid.”
Outlining the six streams of University revenue — tuition, federal grants and contracts, clinical funding from the University’s medical and veterinary colleges, state funding, investments and philanthropy — Skorton expressed the importance of approaching financial cutbacks from a unified perspective. “We do need to have a fresh look at our institutional fiscal management. In going forward, in dealing with pressures of the moment and the near-term future, we need to approach our challenges as one institution.” [img_assist|nid=32769|title=The state of things|desc=President David Skorton fields questions from audience members during his annual State of the University address on Friday morning.|link=node|align=left|width=|height=0]
The notion to combat financial strains as a unified entity comes in the wake of detrimental budget cuts from the State of New York. Just last month, the state legislature announced that the State University of New York (SUNY) system may absorb up to 70 percent of state budget cuts, which could amount to $70 million slashed from the budgets of campuses across the state.
Student Trustee Mike Walsh grad supported the unified approach.
“Cornell needs to address these challenges as a single entity,” Walsh stated in an e-mail. “If the state colleges suffer, the endowed colleges will certainly feel the ripples. The University needs to work as a unit to focus its priorities and seek out opportunities for collaboration and cost savings.”
Skorton referred to a column published on Sept. 28 in Newsday written by former University president Hunter Rawlings III, who was in attendance at the address. Rawlings asserted that NYS has long focused on the financial sector as its most promising industry and it is crucial for the state to refocus its economic base.
“It is time for state leaders to take a long-term view of New York’s future,” Rawlings wrote. “And to recognize … that higher education, particularly top research universities, is the key to the intellectual and economic future in a knowledge economy.”
Skorton announced the recent creation of an ad hoc budget committee, which will advise him on how to proceed amidst anticipated increased budget cuts and additional financial constraints.
“We are now translating the ad hoc group’s principles and recommendations into action and have assigned senior staff, working with collegiate deans and other leaders, to oversee efforts in each of these areas. General approaches going forward include revenue enhancement — from tuition, endowment, research support, gift revenue and entrepreneurial activity — and also cost containment and cost reduction considerations,” Skorton said.
Student Trustee Kate Duch ’09 stressed the importance of transparency in this process, as the committee will release a progress report in November.
“I am confident that the University will continue to communicate clearly and openly with the campus community, as outlined by the final recommendation of the ad hoc budget group,” she said.
One of the areas the University is looking to cut back in is staffing. Up to two-thirds of the budget is spent on personnel, Skorton said, adding that the University has already begun to layoff members of its staff in areas where funds have been cut and could not assure that there were more layoffs were not in store.
“Fortunately, the University has been preparing for a downturn in state funding for some time,” explained Student Trustee Michael Walsh grad. “Some contract college positions have been going unfilled for extended periods to lessen costs.”
“Escalating costs for salaries, faculty start-up, construction costs and many other factors have combined with the pressures on the revenue streams,” Skorton continued. “These times test our mettle, and we will succeed.”
Skorton later lightened the tone of his address, changing his focus to the vitality of the University’s current leadership. He acknowledged the recent appointments of several new deans to the University’s colleges, and thanked the provost search committee for their work in finding a replacement for former p–rovost Biddy Martin, who announced in May she would be vacating her post.
The subsequent announcement that Kent Fuchs, dean of the College of Engineering, would be the next University provost brought the audience to their feet for a standing ovation.
“Kent brings to this post great knowledge of Cornell, strong leadership abilities, and a clear vision for the future,” Skorton said.
Skorton expressed further optimism, announcing a $50 million gift from Tata Education and Development Trust, a subsidiary of India’s Tata Group. The trust will be divided into two grants of $25 million dollars each. One will establish the Tata-Cornell Initiative in Agriculture and Nutrition and the other will go to the Tata Scholarship Fund for Students from India.
At the conclusion of his speech, Skorton fielded questions from members of the audience, and was probed on hot topics that ranged from racism to social responsibility to the job market.
Alice Berglas ’66 expressed concern about the “disturbing” incidents of prejudice that have occurred on campus this fall since the Aug. 31 Clubfest in which students protested against inflammatory remarks printed in a student publication.
“This is such a big problem in society and in the world,” Skorton began. “Where do we want to protect the right of free speech more than on college campuses?”
Skorton acknowledged that “we do have problems of racism on this campus, in society, in the world,” and encouraged a more open dialogue on campus about race issues. Echoing a claim he made in his Sept. 29 column in The Sun, Skorton asserted, “The antidote for free speech is more speech.”
In response to a question regarding stockholder interest in the investment of the endowment, Skorton responded that the University practices “socially responsible investing.”
Skorton proceeded to offer an unsure response to a question about the waning job market, recognizing, “We are facing a frightening environment.”
Skorton told the audience the University is taking a “multi-pronged approach” to the current challenges facing college graduates.
“We will continue to do what we’ve always done … networks really are helpful,” Skorton said. “We will keep vigilant of how things are changing … We will listen to students and parents about what can be done.”