Emory Report

Feb. 22, 1999

 Volume 51, No. 21

Next year's budget allots much of excess income to salaries and faculty additions

The 1999-00 Basic Educational and General Budget reflects Emory's investment in its human capital, said Provost Rebecca Chopp. "Because Emory, like all universities, is people-oriented, the biggest priorities in this year's budget relate to salaries, benefits and market adjustments," she said. Funding faculty appointments and student scholarships also figure prominently in next year's budget.

With Chopp's appointment last year, President Bill Chace moved responsibility for the budget from the chief operating officer to the provost. Still, many of the players remain the same, said Chopp. She and executive vice presidents Michael Johns and John Temple, along with their chief budget officers, worked together to develop next year's budget. "Putting together a budget the size of our Basic Educational and General Budget is an incredible task of balancing the larger picture of our goal of academic excellence with the more focused, specific needs of each school and administrative unit," Chopp said.

The income used to support initiatives and operating expenses in the schools and administrative departments will rise by $27.2 million next year, to a total of almost $355 million.

About 48 percent of that increase, or $11.4 million, will augment the salaries and benefits program. More than three-quarters will fund merit-based salary increases for staff and a 1 percent increase in the fringe benefit rate, which will rise to 25 percent.

The booming economy and a tight job market make it necessary to set aside funds to accommodate market adjustments in salaries, Chopp said. "Given that Atlanta is a tight market for personnel resources, it is important for us to remain as competitive as possible in our salaries and to address special labor categories such as accounting, information technology and custodial services."

School investments, in addition to the salary and benefits program, will absorb about 32 percent of next year's budget increase. Scholarships and stipends will increase by about $1.5 million, including new PhD stipends as the nursing school starts up its doctoral program and partial fifth-year funding for fellowships in the graduate school.

About $4.9 million will go to faculty initiatives and support in seven of the nine schools--adding new faculty, enhancing existing programs, and providing additional instructional and research support for professors.

Initiatives include Emory College's plans to begin recruiting science faculty for Science 2000 and adding faculty in the humanities and social sciences. The business school has searches underway to support projected growth in the MBA and non-degree programs, and the law school plans to recruit faculty specializing in intellectual property, corporate governance, and commercial and international law. At the medical school, the Winship Cancer Center and several departments are seeking chairs. "These searches require investments in order to attract gifted administrator-scholars who can balance teaching, research and clinical activities," Chopp said.

As this year's 14.6 percent rise in income from sponsored research suggests, research activities continue to grow at Emory. "We were able to fund the operational budget of our new bio-tech center. We included a new program in electronic registration for funded research, and we addressed some specific needs in library and information technology," said Chopp.

Most other income streams posted gains. "The Emory Clinic, however, is experiencing revenue constraints around managed care," explained Charlotte Johnson, the senior vice provost for administration who oversaw the budget process. "And that has to be reflected in how they can contribute to the medical school's academic enrichment fund." The clinic's support of this fund will decline by 7.5 percent next year to $6.1 million. While also affected by the changing health care environment, Emory hospitals managed to post a modest 1.1 percent increase in the contribution to the academic enrichment fund.

While tuition continues to account for the largest portion of income, it is one of the slowest growing revenue streams at 6.7 percent. Tuition percentage increases will dip slightly for undergraduates at Emory College and the Goizueta Business School next year, rising $1,000, or 4.57 percent. Other schools will post no increases or moderate ones. With the exception of the graduate programs in nursing and theology, tuition at Emory's schools continues to fall below that of comparable national institutions.

Gifts and grants represented the largest percentage increase in revenue, at 18.8 percent. The jump was mostly due to a gift to the Candler School and "pretty remarkable success with annual giving in the Graduate School of Arts and Sciences and at Emory College," said Johnson.

Long predicted and finally realized, growth in endowment spending slowed this year after a high of 33.2 percent in FY 1997-98 and last year's 26.3 percent. Down this year to 7.56 percent, spending growth "caught up" to the declining growth in the market value of Emory's endowment, which stood at 8.5 percent in FY 1997-98, the last year for which figures are available, after a high of 34.6 percent in FY 1995-96.

The slowed growth in spending means that some of the University's priority programs were not additionally funded this year, said Chopp. "For instance, we were not able to add new resources to address growing needs in support and training for the World Wide Web, and we did not expand many programs in administrative and service units.

"Still and all, we were able to project an overall growth in the budget. More limited growth such as this challenges us to remain responsible and careful in our stewardship of Emory's financial resources, as well as in our deliberations around funding new opportunities for investing in our teaching and research and, above all, our people," she added.

--Stacey Jones

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