Budget woes, slipping national rankings and race relations were among the major issues which University President John T. Casteen III tackled in his annual State of the University Address yesterday in Old Cabell Hall.
Dramatic budget cuts by the state General Assembly have plagued the University over the past year -- and little relief is in sight, Casteen said. State funds now account for only 13 percent of the University's total operating budget.
"The state is now the minority stake holder in the University," Casteen said.
Casteen compared the situation to state funding cuts in the early 1990s from which the University escaped intact.
"We are going through a period of intense work," he said. "We've done it before. We're doing it now."
Casteen outlined a three-part plan to build future financial security for the University. The plan includes forging a new relationship with the state, setting reasonable tuition rates and financial aid packages and conducting an ambitious capital campaign to raise $3 billion beginning in 2006.
"We need tuitions consistent with the markets, so cost does not deter qualified students from coming here," he said.
Budget cuts forced a hiring freeze last year which resulted in the loss of faculty members, but since has been lifted. Casteen credited deans and administrators in addition to a $6 million budget defense fund created by the Board of Visitors for maintaining quality faculty despite recruiting challenges.
"The faculty has grown over the course of recent years despite the fact it seems we never have enough people," Casteen said.
The University commits about 40 percent of its budget to salaries, totaling $797 million, but Casteen said there remain unmet costs because of the University's inability to fund payroll raises. Salaries have not been increased for the past two years, but Casteen said he anticipates a 2.25 percent pay increase for employees for the 2003-2004 year.
Though the subject of privatization has surfaced from time to time, recently-elected University Rector Gordon F. Rainey Jr., who Casteen introduced at the address, said he believed the University must always remain a public institution despite the growing need to generate funds from outside sources.
"We always want to be a public institution -- that was our founder's ideal," Rainey said.
Despite the current budget crunch, University Spokesperson Carol Wood emphasized the optimism in Casteen's address.
"While budget issues have been a focus of state of the university addresses for the past few years, President Casteen had much good news to report today," Wood said. "Outstanding faculty and student achievements, new degree programs, increased decentralization initiatives, a new relationship with the state, receiving a coveted triple-A bond rating -- all added to the sense of optimism."
On another note, Casteen expressed his pride in the University's students.
"Students come here with tremendously diverse academic backgrounds," he said, citing the strength of students as compared to his peers in the 1960s. "The key issue for the upcoming year will be to accommodate accelerated student demand."
The administration also will examine and possibly reevaluate curriculum standards in the coming year.
When U.S. News & World Report released its graduate school rankings last Friday, many of the University's graduate schools, such as Law and Darden, dropped by one or two spaces. Casteen said these statistics did not surprise him, saying these declines may continue to occur until the next capital campaign takes place. The campaign currently is in the "silent phase" of fundraising now.
"All of that ought to concern us," he said. "None of that ought to panic us."
Casteen said he expects the University's 23rd undergraduate ranking may drop as well.
"My expectation is our rank will go down somewhat," he said. "That's not advanced mathematics. That's what happens when you take a zero salary increase."
Casteen also mentioned new degrees that have been developed, such as the master of public health degree, a bachelor of science degree in biomedical engineering and a master of engineering and Ph.D. in computer engineering.
On a less pleasent note, Casteen addressed issues of race relations at the University sparked over the past year by events ranging from students wearing blackface to a fraternity Halloween party, the assault on Daisy Lundy, an alleged racist remark in the Newcomb parking garage and a recent comic in The Cavalier Daily.
"The entire system of values through which the faculty builds a relationship with the student body is threatened," he said.
Though Casteen said he supports the ideals of student self-governance, he asserts that diversity "is not just a student issue. It's our issue."
The Board of Visitors recently formed a committee on diversity, and Casteen also will establish a president's commission on diversity and equity to deal with issues related to race relations.
Casteen concluded his speech by observing this is a notable time for endings and beginnings at the University, ending on a positive note:
"The University is never finished. It evolves."
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