The Red and Black

Issue date: 3/20/09 Section: News

Adams [Click to enlarge]

Project cutbacks

Endowment downfalls

Budget problems

Though tuition, fee increases and the stimulus may help shoulder the University's operating costs, University President Michael Adams said the University will start the 2010 fiscal year strapped for funds.

Reflecting on Tuesday meetings with the Board of Regents and state legislators to deal with economic issues, Adams said in Thursday's Cabinet meeting, "We don't yet have an answer. We certainly don't have a 2010 budget."

The 2010 budget goes into effect July 1, and projections show cuts between 11 and 11.5 percent in the state, Adams said.

"For the University of Georgia, the lines don't yet come together," he said. "If we are to operate in 2010 exactly like we are operating in '09, it will require $22 million more."

That means the University will begin the 2010 budget year in a hole. There are several ways to fill the hole, which include money stemming from the Board of Regents and increases in tuition and fees paid by students, Adams said.

However, he said "all of those together don't quite get there."

Adams told The Red & Black that if the $22 million hole is not filled, the University must find a way to increase revenue or cut expenses.

"We will do what we have to do to balance the budget and fill the $22 million hole," he told the Cabinet.

The University will receive stimulus help, but the dollar amounts have not been finalized, Adams said.

"We have submitted lists to the appropriate parties at the state and the federal level for other stimulus money - the outcome of which we don't know the results of yet," he said. "We don't want to anticipate too much."


What the recession has cost


In the down economic time, the University has cut back on many projects.

"I have not pushed as many international initiatives for faculty or staff," Adams said.

Out-of-state recruitment also has taken a hit because the University has not had the money to finance it.

"We've become a little more insular this year than normal," Adams said. "And I think in the long term, that's not healthy for a great university. But we've done what we have to do to stay above water."

Endowment funds, which are intended to be kept permanently and invested to provide income for continued support of the University, are down between 15 and 26 percent - a loss of "a couple hundred million dollars," Adams said.

"We will get less endowment support next year," he said. "There are endowment funds that are under water. We may have to come up with some money to ensure our capacity to pay endowed scholarships and endowed professorships."

Adams said the reality of the endowment situation is it will take two to three years for the University to work through.

"[In] the last month, the market seems to have turned a bit," he said. "But whether that's permanent is anybody's guess."

Adams said he attended a conference on endowment management last week where he spoke with people across the country going through the same problems as the University.

"The only solace I can bring away from that is we are probably in better shape than anybody immediately around us."

Construction will continue

But despite economic troubles, Adams said the University intends to go forward in its planned construction projects.

"We intend to do that because we think, first of all, it's a very strong economic stimulus," he told the Cabinet. "And secondly, we don't have anything on the list that we think is frivolous."

Greek Park, along with the Tate Student Center and Health Center expansions, is expected to be open and fully operational by the beginning of fall classes. Adams said work on a new East Campus residence hall and new parking decks will continue. Adams said the parking deck construction will open opportunities for pedestrians and cyclists.

The Univ. and the General Assembly

Adams addressed University-related bills in the Georgia General Assembly.

The University opposes Senate Bill 169, which would restrict the creation of embryonic stem cells in Georgia, limiting the use of cells in research.

"There's certainly powerful emotions on both sides of that issue," Adams said. "The University believes - I believe - the kind of stem cell research done here holds great promise for significant health breakthroughs, and the University will continue to oppose Senate Bill 169 and work to see that it is not passed by the legislation."

Adams said the University attracts world-class scientists because of the atmosphere and is concerned a change could create an environment not conducive to work.

Adams mentioned the University's opposition to House Bill 700, which would transfer control of University System of Georgia projects from the Regents to the Georgia State Financing and Investment Commission.

"There are some things that are inherent to the successful function for the University," he said. "We think our capacity to manage our own construction projects and our capacity to continue biomed/biotech-related research of the type that is aimed at in this field is important."

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