Address on the State of the University

The University of Texas at Austin.
September 21, 2001

It is not possible to open an address on the state of the University now without reference to the terror perpetrated against us all on September 11. Make no mistake: These were not acts against New York and Washington, or even against America. They were blows—hard blows indeed—against what it means to be human.

Over thousands of years, we have developed the knowledge, wisdom, and practices that make up human civilization. In the course of those ages, our species has achieved beyond all others who inhabit the planet—as far as we know, even beyond all others who inhabit the universe. But despite the success of humankind, the fabric of our civilization is thin, and not integral to our animal being. The base spirits within us remain and are exposed when the fabric is removed. The terrorism of last week was a quite deliberate attempt to tear it away—possibly altogether away.

Respect for the rule of law. Respect for the individual. Rational stewardship of human possibilities. These are three foundation stones of civilization that came under attack in New York and Washington. A proper response for us now is to reaffirm them, to remind ourselves of their enormous importance, to recommit ourselves—each of us, person by person—to sustaining and promulgating them.

Friends, this is precisely the business of a university. Although we rarely see that mission framed so starkly by context, we see it so now. Ours is the job of nourishing and extending the roots of civilization. Ours is the task of endowing a new generation with the power to pass their heritage and their advances to the next. We often express pride in what we do, because we see its powerful positive impact on individual people and on our society. But our role is far larger and still more fundamental than we usually perceive. If we often saw the full enormity of our responsibilities, we perhaps would be immobilized by fear of them. It is the very intensity of this moment that illuminates those responsibilities and affords us resolve not to fail the generations who follow us.

We are beneficiaries of generations who did not fail, but rather succeeded with extraordinary prescience in their obligation. Let us look backward now, to the founding of Texas, to the legacy of Mirabeau B. Lamar.

President Lamar set the tone for educational achievement in Texas when he urged the fledgling nation to develop not one, but two universities, and he sponsored the commitment of public land to support them. This was in 1838. Texas was on the frontier. The daily goal of individuals was survival, not high culture. The Texas population—everyone included, part of the civil society or not—was only 50,000. The whole nation was no bigger than present-day UT Austin. Five square miles to every person. There were few schools and no cities. A university must have been practically the furthest thing from the minds of most people as an element essential to the future. Even Lamar had never attended a university and could only have had second-hand understanding of social benefits that could be derived from them. Yet he sought two. And not colleges, but universities.

Lamar was not a detached intellectual, writing these ideas in a personal diary to be discovered by curious scholars of a later era. He was the President of the Republic, a man at the center of affairs in this incipient society. He declared these concepts to be foundations for the future. And people followed him.

How wise they were. How exceptional. How unlimited by immediate circumstance. These early Texans were looking far beyond the unrelieved crudeness of their immediate world, not just to a more pleasant, more prosperous home, but literally to the vision of a fresh, vigorous civilization. And that required the resources of universities.

We still celebrate the Texas spirit, but we do not always know why. Texas is not about size or volume or brashness. It is about freedom. It is about ambition. It is about leadership. But our special legacy from the founders is the imagination to envision a future of such brilliance as to seem preposterous, and to hold on to that vision, and to pursue it, and sometimes to realize it. Not by mere talk, but by acting with imagination and commitment. This is a legacy worthy of celebration. Even more, it is a legacy worthy of living.

The Civil War interrupted the path toward Lamar’s vision, but in the Constitutional Convention of 1876, which developed the Constitution under which we now live in Texas, the leadership of Texas encoded Lamar’s dream into the provision calling for the Legislature to “establish and maintain a university of the first class.” This university, The University of Texas, was founded in consequence and was endowed with land—large amounts of public land—the earnings from which gave rise to the Permanent University Fund.

Lamar could not have known how the story would progress. He probably did know that it would take decades, maybe even a century or more. He surely knew that it would take wisdom and resources. The best he could do was to furnish a striking vision and urge Texas along the path. The vision ultimately attracted people with wisdom and talent, and the land of Texas furnished the resources. Lamar’s dream—an audacious, unreachable dream—is a reality, not just that his two universities are here, but that the new, fresh civilization has arisen in Texas.

We who have inherited such a legacy ought to tremble with awe. Can we live up to it? The founders of Texas whisper this question every day to us who lead their remarkable university. They whisper it, too, to those who govern their treasured land. Across the years, generations to come will hear the question from the founders, and they will judge how well we did our duty.

The key to so much has been the Permanent University Fund, the miracle from Lamar’s imagination. It was this concentrated commitment of resources that gave Texas generations of leadership educated practically without cost to them. It was this commitment that gave Texas the opportunity to assemble its own listening posts on the frontiers of knowledge, and the ability to attract teachers whose expertise extends not just to their fields today, but to where their disciplines will be in five years or two decades. It was this commitment that gave Texas the opportunity to attract and to develop the sheer talent that a leading society must have. It was this commitment that gave Texas educational assets that are the envy of surrounding states for many miles, and that now begin to compete with the assets that the nation’s agenda-setting states have had at their service for half a century or more.

The public lands dedicated to building this institution, the lands that made the Permanent University Fund possible, were intended to finance the level of excellence that could support the leadership that Lamar foresaw for Texas. Today, Lamar’s vision has been dimmed by financial convenience. In the decade of the 90s, one of the most prosperous eras in American history, state general revenue support for UT Austin grew at the stunningly low average annual rate of 1.9%. The annual rate of inflation over the same decade was 2.7%. The real value of our general revenue appropriation actually fell by almost 1% each year in the 90’s. Today, the income from the Permanent University Fund has less to do with reaching for excellence than with simply shoring up the small and fading fraction of state support for this university. The same story is told at our sister institution, Texas A&M University.

In recent months, we have heard talk of further weakening of state support by redistribution of the Permanent University Fund. The intention is to elevate the standing of some of our state’s other institutions. Texas does need more educational capacity and more universities of superior quality. But you never hear that expanding educational access in California should be financed by eroding quality at Berkeley and UCLA, or that increasing access in Michigan should be financed by diminishing the University of Michigan. Leading with strength—not undermining it—is a hallmark of any competitive endeavor.

Texas must support its leading universities if it expects to remain competitive in the new century. The Permanent University Fund is already shared by 18 institutions. Because of the way reporting is done in the popular media, many people believe that The University of Texas at Austin commands an $8 billion endowment. This is indeed the value of the Permanent University Fund. But the UT System has only a two-thirds interest, with the rest being dedicated to the Texas A&M System. UT-Austin’s share of the payout from the Fund is 45 percent of the UT System fraction. Thus, the part of the Permanent University Fund supporting The University of Texas at Austin is roughly $2.4 billion. Good. Valuable. But smaller than Rice University’s $3.4 billion. With that endowment, Rice builds excellence for 4,200 students. We seek to do the same for a dozen times more future leaders of Texas and America.

I have much good news to report today, but first, I offer this caution. To divide the Permanent University Fund further—with the intention and effect of diluting excellence in higher education—will relegate Texas to a second-class future. Our generation of leadership must not yield on this issue. We’ve come too far since 1836 to lower our sights now. This is a message I will be repeating in the months ahead.

We had an ambitious set of major goals for 2000-2001 and I am pleased to report accomplishment in every area.

A year ago, I began to emphasize the extraordinary cost to students of prolonging undergraduate study to five or six years and I sought to create a strategy for encouraging them to take an additional two or three hours per semester. I’ve been talking about this subject in my travels across Texas, and students are getting the message. The price of these extra years of college expenses, student loans, and lost earnings amounts to tens of thousands of dollars per year per student. And the point is not lost on parents.

I am convinced that part of the problem is in our habit of pricing everything by the credit hour. With the leadership of Representative Scott Hochberg, the Legislature authorized a flat-rate tuition pilot program in which one price will be charged for any full-time load. We are now implementing the plan in two test colleges—the Colleges of Liberal Arts and Natural Sciences. It will take effect with registration for next fall. Students who take more hours than they would otherwise have taken will get those hours free of charge. If we’re successful in encouraging that, the plan will result in more openings for new students in the future.

The increased size of our student body also prompted another task—revising our admissions policies and the provisional admissions program. The provisional program was moved to five other UT System campuses and attracted more than 700 students, with Arlington and San Antonio being the most popular sites. On this campus, we welcomed 900 freshmen to our new summer admission program. These changes were well received and the summer freshman experience has proven to be more positive than in past years.

In addition, our students are performing better by several important measures. More than 90 percent of freshmen returned for their sophomore year in 2000-2001, a retention rate comparable to the nation’s best public universities. Our four-year graduation rate improved to 38.5 percent, up from 29.4 in 1995, and the six-year graduation rate reached 68.7 percent, an increase of almost 3 percent last year. This is good progress.

We also launched important new initiatives that have strengthened our academic programs. Recently we welcomed the first class of the Donald D. Harrington Fellows Program: four faculty members and nine graduate students who are among the brightest scholars in their fields.

Other initiatives include UT’s new Department of Biomedical Engineering; the new Institute on Nanostructures and Nanomaterials; the Institute for the Humanities; and the Evening MBA program. And as a part of our faculty expansion program, we created 30 new positions and recruited for them in the last hiring cycle.

In our ongoing commitment to improving public education, UT helped create the National Center for Educational Accountability, the first national research and policy center concentrating on systematic assessment to improve schools. A partnership with Just for the Kids Inc. and the Education Commission of the States, the Center will use research from various UT units to evaluate educational performance, identify best practices, and formulate policy. The National Center will help us make a difference in schools in Texas and the nation.

Compensation has been an important focus in recent years. In 2000-2001 we implemented a 6 percent salary increase for staff and 5 percent for faculty. An across-the-board 4 percent salary increase for staff was mandated by the Legislature for 2001-2002, and we implemented a 4 percent merit program for faculty. In addition, we took steps to make health care premiums more affordable for 2001-2002. Graduate student support has also increased significantly during the past two-year period.

Many on this campus have admired the fine work Associate Vice President Kyle Cavanaugh has done restructuring the Office of Human Resources in a mere 12 months while improving the efficiency of its operations. With his help we created and elected a Staff Council, which is acting as a strong voice for people who are critical to our mission. I also want to acknowledge the work of the Committee on Non-Tenure Track Faculty chaired by Professor Judith Langlois.

There is much new construction on campus. Facilities completed in 2000-2001 include the ACES Building; the Connally Wing and Jamail Atrium at the Law School; San Jacinto Hall, the first new dormitory in 30 years; the restoration of the historic Gebauer Building, and a new garage on the north side of campus.

The list of facilities in progress is formidable:

• The Sarah M. and Charles E. Seay Building
• The North Office Building
• A new South Garage
• The addition to the John A. and Katherine G. Jackson Geological Sciences Building
• Renovation of the lower two floors of the Harry Ransom Humanities Research Center
• Improvements to the Frank Erwin Center
• A new Biological Sciences Wet Lab Building
• The redevelopment of the Speedway Mall
• The Blanton Museum of Art

We are also in the process of acquiring the Scarbrough tract south of Scottish Rite Dormitory, on which we intend to build a new residence hall. A master plan for the development of the Pickle Campus is under way, as is the planning for an expansion and renovation of Batts, Mezes, and Benedict Halls on the South Mall.

Budgetary issues were challenging. We made progress on compensation increases, health premiums, and extraordinary energy costs. With regard to the latter, I want to thank all of you who responded to my appeals for energy conservation during 2000-2001. We have taken measures to secure more favorable natural gas contracts, while market forces have eased the elevated energy costs we faced earlier in the year. Of course, we had other plans for the funds consumed by unexpected energy expenses. We were forced to tighten our belts. While UT’s financial position is sound, the second year of the biennium will be tight. The UT System Board of Regents helped the situation by increasing the yield paid from the Permanent University Fund to 4.75 percent beginning next September.

The energy problems we faced in the spring reinforced Benjamin Franklin’s simple but nonetheless valuable adage—“A penny saved is a penny earned.” We must find ways to cut costs further in the year ahead.

Developing ways, throughout the organization, to deliver a higher level of service at greater efficiency is at the heart of cost control. An outstanding example I have often cited is the continuing success of UT Direct, a consolidation of web-based services for students, parents, employees, and prospective students. Since its inception in August of 2000, some 72,000 students and employees have logged on to take advantage of the more than 100 web-based services available. Eighty-two percent of the fall registrations were performed on UT Direct, and more than 5,000 credit card transactions per week have occurred since August of this year. This kind of improvement of our services, made possible through imagination, initiative, and lots of hard work, is essential to the health of the University.

The administrative reorganization begun in March of 2000 was completed with the arrival in July of Don Hale as Vice President for Public Affairs. He joins Vice Presidents Dan Updegrove in Information Technology and Pat Clubb in Employee and Campus Services as new members of the administrative leadership.

And this week we announced that Kevin P. Hegarty, currently Chief Financial Officer of Dell Financial Services, has been appointed Vice President and Chief Financial Officer. He will succeed Senior Vice President and Chief Financial Officer Charles G. Franklin, who retires after 26 years of exceptional service. Mr. Franklin has my greatest respect and appreciation for his remarkable commitment to the University over that time.

As in past years, I want to set some specific goals for this next year.

• To surpass $1 billion in the Capital Campaign.
• To raise our freshman retention rate to 92 percent, the four-year graduation rate to above 40 percent, and the six-year graduation rate to above 70 percent.
• To implement the experimental flat-rate tuition program.
• To prepare to resume faculty expansion.
• To work on further improvements to the employment climate.
• To launch the National Center for Educational Accountability.
• To fully establish the Harrington Fellows Program.
• To break ground on the Blanton Museum.
• To prepare for the 2003 Legislative Session.
• To find ways to recruit a more diverse faculty and staff.

That final item deserves special mention. This university has long been a remarkable engine of opportunity for Texas. But it cannot continue to play that role effectively without reflecting all of Texas. We have made progress in building a representative student body, but we have made much less progress in building a diverse faculty and staff. I challenge the campus to do better. It is time for invention of new methods that can help in this direction.

Before I turn to the last chapter of this address, I want to recognize a particular colleague outside the UT family. Over the past four years, he has become for me a trusted friend and a reliable partner in the effort to advance higher education in Texas. Ray Bowen, president of Texas A&M University, is retiring at the end of this academic year. He has done an outstanding job for the people of Texas, and we will miss him.

There is one major accomplishment of the past year that I have yet to mention. As of August 31—at the end of the fourth full year--the We’re Texas Campaign had reached $928 million. That compares to $682 million at the same point in the year 2000. Over the past 12 months, not a prime period for fundraising because of the general economic weakness, our supporters have committed over $240 million to our programs and our future. We expect to reach the $1 billion mark late this year or early in 2002. It will be a major milestone in the life of The University of Texas at Austin.

On March 2, Texas Independence Day, we will celebrate crossing the $1 billion threshold in the campaign. It will be not only a time to mark success and to draw well-earned satisfaction, but also to rededicate ourselves to the final three-years of the campaign. In that period, we will emphasize the message of “Building value. Making connections.” That is, we want to do a better job of showing Texans that this university is a trustworthy custodian of their culture and its treasures, and that their future can be even brighter by building certain kinds of value here. Beyond that, we want to find better ways to connect that value to Texans individually. We have many resources here, and we provide many services; we want the people of this state to take advantage of them.

As we get our second wind, I would like to see the campaign focus on a few key programs: Graduate studies, our libraries and collections, expanding technological capability, and other initiatives specific to the colleges and schools.

As I have said on other occasions, the Capital Campaign is more than just pledges and money in the bank. It has helped us all define our aspirations and envision a better UT. And it is now bearing tangible fruit. The marvelously talented Harrington Fellows who have arrived on campus are walking examples. The magnificent ACES Building is another. By now, there are thousands of ways in which this university has been made stronger through the gifts of generous individuals, corporations, and foundations made in the We’re Texas Campaign. They have invested. They have believed in Lamar’s legacy.

At the start of this address, I emphasized the indispensability of the Permanent University Fund to the excellence that has developed here. It remains absolutely critical that The University of Texas at Austin retain its current access to the Fund’s earnings. But UT Austin’s share of the PUF is now too small an endowment to support the institution that Texas needs tomorrow, especially given the current realities of public finance. Today, I lay down the challenge of doubling UT Austin’s portion of the Permanent University Fund by building a private endowment of equal size. Right now, that would be a total private endowment of $2.4 billion. Presently, our private endowment (that is, outside the Permanent University Fund) amounts to $1.6 billion. Since the PUF should grow while we are chasing its total, my goal is to add at least $1 billion more to the private endowment. We can pursue this goal as a part of the We’re Texas Campaign. It will be hard to achieve it in the remaining three years; but we can try, and we can go on afterward until we succeed. This is as valuable a step as we can take to protect Lamar’s legacy and to hand it on.

Can we live up to the legacy? The founders of Texas whisper this question every day to us who lead their remarkable university. Across the years, generations to come will hear the question from the founders, and they will judge how well we did our duty. If we can meet the challenges that I have laid out here, we will have kept the faith, and they will know it.

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