Making Tough Decisions

The challenges our University faces this academic year are complex.  Consequently, our response to these challenges is not a simple story.  In the interest of clarity and transparency, I want to share our strategy.  Because of its length, I’m presenting this post in two installments.

The situation—Declines in investment income from all endowments, including the Available University Fund, have largely offset increases in state general revenue and tuition income for the 2009-10 budget.  Increases in employee health benefits, mandated financial aid increases, and other obligations have absorbed the majority of the new funds.  As a result, our budget is essentially flat.  Because of the way our endowment yields are calculated, we anticipate that this will continue through 2012-13.  Consequently, the Board of Regents has allocated additional funds from the AUF to help alleviate the situation for a three-year period. 

The strategy—In response to this situation, we could merely place our strategic initiatives on hold and cautiously balance the budget.  However, we aspire to be the best public university in America.  We have decided to continue to pursue our strategic goals.  This requires that we combine our limited new revenues with resources made available through reallocations and greater efficiencies.  In short, this means taking money from low priority programs to fund high priority programs.  This kind of change occurs every day in the private sector. 

Our priorities—In 2009-10, our highest priorities are to create more competitive faculty and graduate student compensation, continue faculty expansion, and increase student scholarships.  Faculty raises for this fiscal year will not be effective until January 2010.  They will be targeted to address inequities in our pay structures.  This will not cover normal pay raises for most of our faculty.  And we have been unable to give raises to our staff.  We will need to reallocate our resources so that we can provide faculty and staff raises next year.                                   

The process—In shaping this plan I consulted with students, faculty, deans, and staff.  I made a presentation and fielded questions at the Faculty Council and Staff Council meetings.  I will discuss the situation further and answer questions at a university-wide town hall meeting from 4:00-6:00 p.m. on February 2 at the Avaya Auditorium in the ACES Building.

Tomorrow, in part two of this post, I’ll talk about implementing our strategy and the future.


In Tower Talk I’ll try to answer questions that are raised in reader comments.  While I am unable to respond to every question, I’ll look for issues of high interest or questions raised by multiple readers.

A number of comments asked, who is responsible for deciding how much money flows from Intercollegiate Athletics to the academic enterprise at UT?  Also, why doesn’t athletics contribute more money to academics?

Ultimately, I make the decision, although I do it in consultation with the directors of men’s and women’s athletics. The goal is to make the contribution as large as possible.  But it must be done in a way that ensures that athletics continues as a self-sufficient business model.  As I said in a previous post, it was not that many years ago that academics subsidized athletics.

Some athletics revenues are predictable while other revenue streams are cyclical. Expenses can vary from year to year and from sport to sport.  Recent reports concerning football revenue may lead some to believe that Intercollegiate Athletics enjoys large profits.  Don’t forget that athletics must pay for many men’s and women’s programs besides football, and the majority do not pay for themselves.  The profit of Intercollegiate Athletics is far less than the profit of the football program.

The good news is that our highest revenue-producing programs are experiencing great success, and Intercollegiate Athletics should again be in a position to contribute financially to the academic mission of UT.


Celebrating Exceptional Students, Faculty, and Staff

Most of you have heard me extol our talented, accomplished, and dedicated students, faculty, and staff.  The video linked below will make every member of the UT family proud. We prepared the video to honor...

Tough Decisions, Part II

In my previous post, I discussed our economic situation, priorities, and strategy.  Today I want to talk about implementing the strategy.  Reallocation—No colleges or schools have experienced a budget cut for this academic year.  They have...


  1. ut_alumnus_staff says:

    I, too, would like to know why the percentage of UT football revenue dedicated to academics is so low compared to other universities. Do they, too, not have unprofitable sports programs to support?

  2. President Powers,

    I appreciate the tough position you’re in, trying to meet all the financial obligations during a time of decreasing revenues. I also appreciate your commitment to creating more competitive faculty compensation.

    Do you have a timeline for when the university will start offering domestic partnership benefits or competitive insurance benefits to its faculty and staff? I, for one, would be willing to forego a raise, which I deserve but haven’t received in the year-and-a-half I’ve been a staff member here, in lieu of the chance to purchase insurance benefits for my partner. I’ll bet I’m not alone…

    Keep up the good work!
    Debra Winegarten,
    Administrative Associate,
    Department of Astronomy

  3. I understand that the athletic department needs to fund unprofitable sports and that this eats into the football profit. However, Notre Dame, Oklahoma and Ohio also need to fund the same unprofitable sports, yet are still about to pump significantly more money into academics. For example, Notre Dame and Ohio pump over $20 million a year into academics, where Oklahoma pumps about $7 million. These three schools also bring in less football revenue and need to support the same unprofitable sport teams.

    President Powers, can you explain why it apparently costs Texas tens of millions of dollars more to support the unprofitable sport teams, than it does Notre Dame, Ohio, or Oklahoma to do so? Maybe a profit/loss table of each sport or a high level summary of the athletic department expenditures could illuminate this discussion.

    Postscript: Since it appears to be the policy that multiple readers need to ask the same question before President Powers will answer it, if other readers are interested in this topic please leave a comment indicating so.

    Postscript 2: I’ll second Argus question (at: December 24, 2009 at 6:56 pm) regarding why an independent Staff Ombudsperson position has not been created. This should help it meet the “questions raised by multiple readers” standard.

    • President Powers,

      I am very proud of the work of the UT Staff Council in 2009.

      The Ombudsman Office provide information that since 2004 an Ombudsman was created for UT Faculty Staff.

      We are now a new year 2010, when will you approve for an Ombudsman be created for UT Support Staff? This issue and needs has been previously been addressed or suggested thru various UT offices including the UT Staff Counsel from UT Support Staff.

      President Powers I have often heard of you express your appreciation for all UT staff. I was glad you were approved moneies for the faculty staff as you had set out to do.

      This year would you consider meeting with the Board of Regents to come up with ways and stragities to support increases for UT support staff as well, by allowing for higer education employees to get the same benefits and raises as teachers or other state agencies since UT employees pay into the Teacher Retirement Systems. There are loyal and hard working and long serving employees here at UT, please be a viable voice for your UT support staff too. Extra monies are be taken out of our salaries for parking, health and prescription insurance benefits, deductable etc. These are take a noticeable toll on all staff premiums. We need for you too fight with and for us too. Sometime we cant waite for an oppertunity to present it selve we have to create it. UT’ slogan is what start here changes the world. Pleas do what you can to make it better for all higer education institutions and their entire staff of employees in Texas.

      Thanks for the oppertunity to share with you.

  4. Brian Korgel says:

    Speaking of sports…I think it’s a tragedy that UT Austin does not support a NCAA Div. 1 men’s soccer team.

  5. 1) Thank you for pointing out that the revenue from the football program goes to support all of the other, non-profitable sports. UT has world-class programs in many other sports which are unlikely to show a profit. That helps explain why less money flows from the football program to the academic programs than we might expect.

    2) You state, “In 2009-10, our highest priorities are to create more competitive faculty and graduate student compensation.”

    Will this priority include offering domestic partner benefits for faculty? As you know, nearly all of the comparable universities offer domestic partner benefits, most private sector companies offer domestic partner benefits, and UT has lost several excellent professors due to not offering domestic partner benefits. These benefits would add a miniscule amount to the budget but would help UT meet the highest priority of 2009-10 of creating more competitive faculty compensation.

    I am sure that you know all the details, but anyone else interested in the facts and figures supporting these benefits can view the detailed report at .