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April 13, 2009
Board approves FY10 budget

By nancy seideman

Emory’s unrestricted operating budget will grow a modest 2.6 percent ($17.6 million) in fiscal year 2010, as the University begins to feel the effects of diminished income from its endowment funds following the worldwide equity market collapse in Fall 2008.

Given that increases in financial aid across the University will consume most of this revenue growth, significant cost reductions and reallocations were necessary to fund the highest school and university priorities and requirements for next year.

The Board of Trustees approved the budget at its April 9 meeting. When combined with other University resources and with Emory Healthcare’s budget, total operating funds will remain even with last year, amounting to an estimated $3 billion for the new fiscal year beginning September 1.

Reflecting the impact of the national economic environment, next year’s growth will be only half of what the University experienced for this fiscal year. For FY10, few of the University’s staff and faculty will see an increase in compensation as the budget does not include a usual merit salary program for the first time in many years. In addition there will be some targeted reductions in force as individual schools and administrative divisions respond to the new environment of overall resource constraint.

Despite this challenge, “Emory will remain true to its twin purposes of excellence of mind and greatness of heart,” says President Jim Wagner. “The fiscal year 2010 operating plan is balanced and allows the University to continue forward movement, although at a significantly different pace.”

Specific budget priorities include faculty recruitment within individual schools, and substantial investments in undergraduate financial aid and in support for graduate and professional students.

The University has made a substantial increase in financial support for current and potential students, many of whom need enhanced financial assistance due to changing family situations as a result of the national economic downturn.

In addition to recruiting and retaining top students, Provost and Executive Vice President for Academic Affairs Earl Lewis says that, “Emory’s quest for excellence will continue through investment in our faculty, who represent the cornerstone of our academic reputation. A focus in the coming year will be recognizing those who have been promoted and working hard to retain those we would hate to lose.”

The recently passed federal economic stimulus package could benefit the University through additional support in several areas, says Fred Sanfilippo, executive vice president for health affairs and CEO, Woodruff Health Sciences Center. “The substantial funds being provided to the National Institutes of Health and for health information technology applications have created significant opportunities in research and health care for which Emory is especially well positioned because of our strong existing and newly developing programs.”

The continuing unrest in the financial markets and the constrained ability of students and their families means that University leadership will need to move immediately from FY10 budget approval to the next phase of financial assessment and adjustment, including a comprehensive evaluation later this month of the initiatives funded by the Strategic Plan Fund, identification of additional revenue generating and cost savings opportunities, and a fundamental assessment by schools and administrative units of new ways to forward Emory’s mission.

“We face a new economic reality and our challenges are clear — a large percentage of our non-clinical revenue stems from tuition and endowment, and we know that these sources will be subject to significant constraints for the foreseeable future,” says Mike Mandl, executive vice president for finance and administration.

“Emory must continually look for new resource opportunities, seek philanthropic support through our comprehensive campaign and adjust expense budgets as needed through cost savings and redeployment,” says Mandl. “Our goal is to work with all members of the University community to develop a wise plan that positions Emory to take full advantage of opportunities when economic conditions begin to improve.”