Sullivan answers our questions on faculty stability, budget shortfalls, and the future of her students

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Teresa Sullivan presides over her second Final Exercises as UVA president this weekend. (Photo by Dan Addison/UVA Public Affairs)

 As her second academic year at UVA comes to a close, we talked with University President Teresa Sullivan about new leadership, budget struggles, and what graduates face as they head out into the world.

What’s changed at UVA since your inauguration?
I’m not the only relative newcomer. Last spring, Leonard Sandridge retired as executive vice president and chief operating officer after 44 years at UVA, and Michael Strine came from Johns Hopkins to step into that role. Last fall, John Simon, a noted chemist and academic leader at Duke University, became our new provost after Tim Garson stepped down. So for the three top leadership roles at the University to change hands in a relatively short period of time—that’s a lot of change for an organization to handle, and it’s been an adjustment, not just for the University community but for us as well.

That new leadership has meant some different foci. One of my main priorities when I arrived was to institute what we’re calling a new internal financial model based on activity-based budgeting—basically a way for the schools and units to have more control over their resources and the opportunity to be more entrepreneurial in experimenting with new research areas, new academic programs, new courses, new ways of teaching and conducting research. This is more than just a system or a process. I believe it will offer John Simon and the deans, together with faculty governance, opportunities to inspire greater collaboration and partnership across schools. Michael and John are leading this initiative and they have involved many, many faculty and staff across the Grounds.

Although this form of budgeting is found at many universities, public and private, we’re not sure what it will look like for UVA. As Michael is fond of saying, “If you’ve seen one activity-based system, you’ve seen one.”

Another focus is that we’re prioritizing our relationships with state and federal officials, both elected and administrative. We want them to understand that UVA is an exceptional institution that excels in its core missions of teaching, research, public service, and patient care. During the General Assembly session, we were frequently in Richmond, and I make a point of visiting key stakeholders in Washington at least once a month.

Another change: One of our key messages is that higher education, not just UVA, but all of higher education, drives innovation, economic growth and jobs. It was university research that gave us such things as fluoride toothpaste, LCD technology, and locking retractable seatbelts—things we take for granted. And I’m not just talking about applied research. Universities today conduct most of the basic research that goes on in this country. Basic research is driven by scientific inquiry, curiosity and sometimes serendipity, and it leads to discoveries that can then be applied to new technologies and products.

Even with a 3.7 percent tuition hike planned for next year, UVA is facing a $6 million budget shortfall. How will the University plug that hole?

Tough times are nothing new here, certainly. We are receiving less in tuition and state support to educate an in-state undergraduate student on an inflation-adjusted basis today than we were in 1989-90. The state has cut its general fund allocation to UVA five times in five years, to the tune of $51.5 million, or 32 percent. Through it all, UVA hasn’t employed mass employee layoffs nor eliminated programs wholesale, as many colleges and universities did. I attribute this to sound fiscal planning and management.

Now, we are very grateful that the governor and General Assembly have recognized the past defunding of higher education in Virginia and have allocated $230 million to state colleges and universities this coming biennium. UVA’s share of that will be $17.1 million over the next two years, much of it directed toward cancer research, focused ultrasound surgery, research equipment and a proposed 2 percent salary increase in the second year of the biennium.

At the same time, we face substantial economic headwinds. We will be required to absorb the costs of a 3 percent bonus for state employees, which the governor promised in the event state finances are healthy enough at the end of this year. We will also have a substantial increase in the employer’s contribution to VRS, just as the local school districts and municipalities will. The University faces the same rising costs for energy as consumers do, and we also have the need to stay current on the technology for a vast number of fields that we teach.

We will continue to squeeze out costs by looking for opportunities to collaborate and achieve efficiencies. We will also seek to grow philanthropy. If you look at the last U.S. News & World Report rankings, you will see that UVA is the 25th-ranked institution overall among publics and privates, but it is 60th in financial resources per student. We provide a high-quality education more efficiently than many of our peers. We are good stewards of the resources we have, and we will continue to get better.

People—including some legislators—look at our endowment and ask why we can’t spend some of that. Almost 70 percent of the endowment is restricted—that is, the people who gave the money gave it for a very targeted purpose, so it cannot legally be used for other purposes, such as increasing salaries. The unrestricted endowment income is currently committed to Board of Visitors’ priorities such as financial aid for students, graduate fellowships, improving the residential experience of students, and some salary support for faculty. Additionally, the unrestricted endowment income is used to fund costs, such as fundraising, which are better supported from private funds than from state or tuition funds.
Other big-ticket items, such as athletics, don’t receive state general funds at all. Athletics is self-supporting through conference revenues (including television revenues), student fees, ticket sales, philanthropy, corporate sponsorships and other sources—and in fact, it returns money to the University by paying tuition for the student-athletes and supporting financial aid.

Since your arrival, you’ve emphasized the need to focus on retaining faculty. The state budget calls on the University to contribute to a 3 percent raise for faculty, and there’s talk of the first raise in years in next year’s budget. Is this enough? Is there more to meeting the goal of keeping and recruiting professors than salary increases?

I’ve already talked a little about that. As recently as 2006-07, UVA’s average faculty salary ranked in the 66th percentile among AAU institutions, and now we have dropped to the 57th percentile. The College was in the 47th percentile, and is now in the 34th percentile. Yes, we are at risk of losing many of our esteemed faculty, and younger faculty eager for opportunity.

Philanthropy plays an important role here. The College recently acquired the Rosenblum Chair in mathematics, which was endowed by an alumnus in honor of his father, Marvin Rosenblum, a longtime professor and chair of the math department. This chair was used to recruit Craig Huneke of the University of Kansas to Mathematics, and we are pleased that his wife, Edith Clowes, will join the Department of Slavic Languages and Literatures.

Several alumnae just put on a gala fundraiser in New York to endow the Julian Bond Professorship in Civil Rights and Social Justice in the history department, as Professor Bond retires this spring.

For the long run, however, we will be challenged to find ways to keep faculty salaries competitive.

The members of the class of 2012 are, by all accounts, going to have a tough time as they enter the job market. Has the still-suffering economy pushed the University to change its tack at all when it comes to preparing students for careers? Do you have any advice for departing students?

Career Services, of course, works with students, and many of the individual schools have their own career offices. We realize student career services are important and we will continue to evaluate our efforts.

If I had to identify a change in tack, it would be entrepreneurship. Young people don’t lack for ideas, and UVA gives them lots of opportunity to try out their ideas and even get funding for them. Three student entrepreneur proposals were pitched at this year’s Venture Summit and received funding from the investors in attendance. A company called PureMadi is developing ceramic water filters for developing countries that can be manufactured with local materials. Two engineering students won the business plan award at the South by Southwest Festival for WalkBack, a social media application to help students watch each other’s backs and improve safety.

At the same time, I believe there is enduring value to a liberal arts education—which includes the sciences. Meredith Woo, the dean of the College, wrote recently that the liberal arts develop not only intelligence but also intellect—intellect being that quality that questions, examines, wonders and theorizes. Such an education is ever more critical in a world of ever more complex problems that require ever more complex solutions. This is what our students learn. This is what many of our graduates do.

This will be my third Final Exercises, and my second as president. It’s such a proud day for me to recognize the accomplishments of these young people as they move on to jobs, graduate school, Teach for America, Peace Corps and many other endeavors.

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