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January 26, 2009
Wagner discusses budget with College faculty

By Nancy Seideman

At the Jan. 21 spring meeting of the Emory College faculty, President Jim Wagner gave an overview of how the University is adjusting to new economic realities brought about by the national crisis, and noted that what the world is experiencing is “not a passing storm that can be weathered, but an economic climate change.”

Emory will prevail, said Wagner, by following “practices of transparency and ownership, by trusting and challenging leaders at every level to exercise creativity, fairness, compassion, courage and determination to adjust to the new reality.”

The challenge, according to Wagner, is to meet University priorities — including rewarding, retaining and recruiting the best faculty and staff, and recruiting and retaining top students — while faced with substantially
reduced resources.

Wagner reported that the value of Emory’s endowment and investment portfolio is down by more than 20 percent for calendar year 2008, resulting in a reduction of about $50 million in annual budgeted revenue from this source, and an additional reduction of $10 million in annual revenue from interest on working capital funds, due to sharp reduction in interest rates. Although the University is still moving through the fiscal year 2010 budget preparation, Wagner said that the University’s overall budget would grow approximately 1.6 percent next year, compared to 6-8 percent in recent years. He said that budgets would remain flat or be reduced in virtually every administrative unit.

With assistance from Earl Lewis, provost and executive vice president for academic affairs, and Mike Mandl, executive vice president for finance and administration, Wagner spoke of the specific challenges and opportunities within colleges and schools, and addressed questions regarding tuition’s role in the College’s budget, Emory Advantage, graduate student support, specific financial challenges being faced by other schools, and the status of Campaign Emory.

In addressing questions posed by Eric Weeks, associate professor of physics, Wagner said it is becoming increasingly clear that Emory can do more to enhance transparency of its budget and finances with College faculty. He said the administration is very open to working with the College to provide information to the Emory College Financial Advisory Committee so that the full context of University decision-making is available to faculty.

However, Wagner also noted that many decisions in the College are “local” and said that he would not presume to tell any school how to make its own decisions about the relative priority of programs and commitment within that school.

Lewis also welcomed the opportunity for more discussion regarding the University’s budget process. “We look at the University budget line by line and are willing to take out anything that is extraneous, but there are some things we can’t take out without harming the institution,” Lewis said. “We have to figure out collectively how to pay for things that maintain the quality of this University that we all take pride in. Conditions and opportunities may dictate that we develop a new business model in time, one that ensures sustainability and positions Emory for excellence over the next quarter century.”