Campus News

May 9, 2011

Board approves FY12 budget

Emory's Board of Trustees voted to approve the University's fiscal year 2012 budget, and with it, a 5.2 percent increase ($38.1 million) in the University's unrestricted operating budget. The action was taken at the May 5 Board meeting. Emory's fiscal year begins Sept. 1.

Total operating activity, including Emory Healthcare, is projected to be $3.5 billion. The academic component at $1.5 billion reflects a very modest increase in overall spending of just under 3 percent; the Emory Healthcare component, which will be finalized in August and is estimated to be $2 billion, includes the addition of Emory Johns Creek Hospital.

"For the past three years, Emory has focused on reducing costs, exploring alternative revenue growth opportunities and realigning reduced resources, all in response to the economic downturn in 2008," says President Jim Wagner.  "The budget for 2011-2012 reflects a continuation of these innovative and prudent measures that have allowed Emory to fund and advance our strategic plan and its priorities during a prolonged and challenging economic climate."

"The landscape for funding higher education and health care is changing, and this budget is reflective of early steps in an evolution of the operating models for our schools and in patient care," says Mike Mandl, executive vice president, finance and administration. 

Innovative revenue-raising ideas

In light of the funding challenges affecting Emory and its peers nationwide, last summer all Emory schools and Yerkes National Primate Research Center were charged with developing new ideas and strategies to support future investments for FY12. These new resources, according to Mandl, will be an important step in advancing the priorities of the academic units as other revenue growth is constrained. 

"Individual schools have proposed innovative ideas to increase revenue while fulfilling their mission," says Earl Lewis, provost and executive vice president for academic affairs. 

"For example, the Goizueta Business School plans to increase marketing for its portfolio of MBA programs and joint synergies with the Law School and the Rollins School of Public Health; the Law School will broaden its portfolio of educational programs, including the addition of a new Juris Masters' program and an increase in enrollment with its LLM program; and the Candler School of Theology is restructuring is course schedule and offerings to appeal to new students.

"New and joint master's programs are proposed in the Laney Graduate School and the School of Medicine is exploring a possible major international partnership," adds Lewis.

Strategies for enrollment, funding

The University is also completing a new strategic plan for undergraduate enrollment including the implementation of specific strategies to meet enrollment objectives and reduce the rate of growth in financial aid from the Unrestricted Operating Budget. Continued philanthropic support is a component of this strategy.

Consistent with the FY11 budget, funding for a modest merit salary pool is included in the plan for FY12 and will be used to reward those who perform so well on behalf of Emory.  In order to remain competitive and retain Emory's best faculty and staff, these resources will be distributed through a plan overseen by the deans, the executive vice presidents and human resources.

Strategic investments will occur in the areas of research administration, undergraduate admissions, student systems and the finance division.  The offices of general counsel and internal audit will see additional staffing in anticipation of expanded operational needs within Emory Healthcare, including the acquisition of Emory Johns Creek Hospital and the pending Joint Operating Company with Saint Joseph's Hospital that was announced in March.

"Emory Healthcare is mindful of several issues that are evolving quickly, beyond our control, yet directly affect our budget," says Wright Caughman, interim executive vice president for health affairs and CEO, Woodruff Health Sciences Center.

"In particular, Emory Healthcare faces continuing changes to its payer mix, pending implications from federal health care reform legislation and financial pressures related to the overall state of the economy.  We will have to work through the effects of this on both the health care clinical front as well as in the School of Medicine. We are working cooperatively across Emory Healthcare, the School of Medicine, and the University to best position Emory in the context of these coming changes." 

"Locally, health care providers are consolidating market share, and we believe Emory Healthcare is well positioned in light of the acquisition of Emory Johns Creek Hospital and the pending Joint Operating Company with Saint Joseph's Hospital. Both hospitals have outstanding reputations for patient care and both are strategically located in the competitive metro Atlanta market," says Caughman.

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