Manoa Faculty Senate Meeting of March 18, 2009
Chancellor Hinshaw's Report

Aloha!  Mahalo for the opportunity to share information with you today.  I know everyone has a lot on their plates right now, so having this time together is particularly important. 

I do have to share “a sense of urgency” that I have with regard to our economic situation, particularly as I watch the on-going legislative actions. 

I know that we all share the goal of ensuring that UH Manoa is a strong research 1 university and that includes preparing educated citizens, creating research advances and adding value to our State. 

The recent report by UHERO regarding our economic contribution to Hawaii surely demonstrated that UH Manoa is an important economic engine for Hawaii with the return of $5.34 in state spending for every $1 invested in this institution.  That report was commissioned last spring, well before the economic crisis that we now face – I felt it was important for a public research institution like UH Manoa to have valid data on our role as an economic generator for Hawaii so we asked UHERO, as a respected analysis group, to undertake that endeavor.  You never know what the outcome will be but clearly our positive contributions in generating income for Hawaii are clear.

Now I’m an optimist by nature but a realist by experience.  I am optimistic that UH Manoa is highly critical to this state’s future, but I am also realistic that we can’t support the enterprise as it is or where we want to go with the resources we currently have and I actually thought that before the cuts so we certainly can’t do it with the reduced budgets being proposed by the legislature.   I noticed a quote in Ka Leo from Mary Tiles who said we can no longer afford to be what we have become.  So what do we want to be in the future and how can we get there while remaining affordable?  I certainly agree with Mary’s comment. 

The reality is that the House’s current proposed budget contains a $33M cut to our campus – this is not a one-time cut but an on-going cut in our general funds which we use to support our people.  The legislature is saying that they are “transferring resources” from general funds to tuition – this is not a transfer, this is a cut.  This means that the additional dollars we anticipated from tuition increases disappear, plus a lot more money along with that.  This is similar to last year when they proposed not supporting programs here but telling us we could pay for it from other funds – regardless of whether that money was committed to other purposes.  We have major commitments on the funds we are generating – we can’t simply reduce the amount of money and swap from pot to pot without impact.

The reality is that the proposed $33M cut in general funds means we will lose positions, people and that will impact services that our campus can provide.  Those cuts will come quickly and our accommodating them will involve painful choices for everyone. 

Now I was concerned about our financial arrangements when I first arrived here but confident that the increasing income from tuition would be beneficial in two ways – provide resources to strengthen our position as a research one institution and provide the driver to improve the educational experience for our students.  In the current scenario, we are not even maintaining the economic progress we were making.  Cutting our budget at the proposed level surely does not support the outcomes we all had in mind.

Across the mainland, major universities like Manoa are making dramatic changes because of reductions – we are now facing the same situation and need to be bold and strategic in our decision-making to protect the academic quality of our institution.  I can assure you that this is not a ploy by anyone to force changes but rather the reality we all face in planning for the future.

Where are we in our planning for both short and long term changes to create financial flexibility for us?

          Budget workgroup – has worked hard to come up with changes that will help in the short term – approximately $10M at this point, but a far cry from $33M.

          Prioritization process – which is with the vice chancellors at this point – will prove very helpful in determining bigger changes that will strengthen and also increase our academic effectiveness in a number of ways but many of those will take time to accomplish – the cut is facing us now.  I will say that I started this process before the economic crunch because people were telling me that we couldn’t do more because the legislature hadn’t given us more money – I hadn’t been anywhere where the legislature gave us more money so I felt we had to make internal changes to enable us to reallocate to achieve the goals Manoa wanted.  I still believe that but my sense of urgency has certainly accelerated with the current situation we are facing.   

Legislature – still has time to go but, as we all know, the economic news is not going in the direction anyone would like, so that is not encouraging for any of us.  The legislature faces difficult decisions and I know Manoa has a role to play in taking certain reductions but the level being proposed damages our ability to be an economic generator for the state. 

Stimulus money – there is income there and Kathy Cutshaw can best describe the details but remember that is one time money – our state reductions are not one-time but rather continuing cuts. The stimulus money may well help in giving us time to accomplish the changes we need to make internally to readjust our budget but it is not a long term solution – we still must make significant changes and start now in accomplishing that.  President Obama has moved billions of dollars into his stimulus package that can help research institutions such as ours.  There are requests for applications on the street from the NIH and NSF and more will be coming forward.  However, we must recognize that these are also one-time funds and there are costs associated with developing and ongoing research programs.  Also, we continue to build on philanthropic opportunities – folks clearly do care about UH Mānoa and its future. 

One of the benefits of working in a university is that there are a lot of smart creative people here – I have been studying the many ideas that faculty and staff provided to the campus on how to strengthen Manoa and also save resources.  Such as, reduce administration – I agree with that – you could get rid of the independence gained in having your own administration for UH Mānoa but that won’t meet the reductions and puts you back where the campus said it didn’t want to be.  But there clearly are cuts to be made - those include combining and eliminating programs to reduce bureaucracy.  Focus on student success through advising, reducing low enrollment classes and focus on those of greater impact, reducing credits hours required, get rid of cap on out-of-state students.  Reduce energy consumption – a huge need for our campus which should lead this effort and be a model – ranging from replacing old mechanical systems, operating fewer buildings, increasing Green Days, preparing for a 4-day campus calendar that matches our academic goals. Going paperless is a favorite and we desperately need progress there – I have never seen as many paper transactions as required here.

Most folks did not want to cut R&M and I respect that because we have much work yet to do in that area – we are making progress but there is a lot of backlog to address.  Most folks did not support making across the board cuts but rather strategic cuts – including merging and closing programs and buildings. 

There are two outcomes from the input received – first of all, we should be using as many ideas as possible and we should determine what we want to do, not wait until someone else does it to us.  Resources we recover can cover reasonable reductions but, most importantly, as we both alter our investments and attempt to generate more income, those resources can be used to strengthen, not simply maintain, this university.

Every one of us needs to recognize the seriousness of this current situation – this is not the normal fluctuation in budgets – this requires major changes and we must start now.  I am confident we can make changes that will both recover resources and strengthen our university but the current reductions being suggested are damaging and the legislature needs to be aware of that reality.  It is important that we, as a campus, determine what is best for UH Manoa and sometimes that means ignoring some of the outside forces as we work to get our own house in order – and we must do that together by generating the best solutions we can and making them happen in a timely way.

I will close with a quote that I have found helpful in tough times – Ralph Waldo Emerson said “The sun shines after every storm;

There is a solution to every problem,

and the soul’s highest duty is to be of good cheer.”   

We have many reasons to be of good cheer in that our work as a research institution enlightens the present and strengthens the future.  As an ohana, this is a time to be respectful and supportive of each other, because there is a lot of stress in people’s personal and professional lives during times like these.  So mahalo for your efforts and I look forward to working with you as we address these serious challenges together.