Renaissance at Rensselaer: Spring 2006 Update
Shirley Ann Jackson, Ph.D.
President, Rensselaer Polytechnic Institute
Spring 2006 Town Meeting
Darrin Communications Center
Rensselaer Polytechnic Institute, Troy, New York
Tuesday, March 7, 2006
This afternoon, I had the opportunity to take part in the lunchtime discussion with students which we call "Pizza with the President." This event was launched last year, and it allows me to spend some time talking with, and taking questions from, students in a relaxed, informal atmosphere. I enjoy these sessions. I come away impressed with the commitment of our students to Rensselaer and to our institutional vision. Of course, we may not always agree on the details and this often makes for lively discussions but, I believe, we share a common goal of making this a world-class university, one of the handful which will lead in this century. And, so, with that in mind, I extend a special welcome to the students here this afternoon.
I also am pleased that members of the President's Cabinet and the Dean's Council are here this afternoon. As always, their contributions during the Question & Answer session, which follows this presentation, are welcomed.
This afternoon, I would like to give you an overview of the Institute budget for Fiscal Year 2007, which begins July 1. I also want to discuss some of the challenges we face as an institution, and how we are positioning this university to meet these challenges, and to fulfill the promise of The Rensselaer Plan. I am confident that we are on the right road the road to success, and to the realization of Rensselaer as a university with "global reach and global impact."
It is very important for the members of the Rensselaer community to have relevant, current, and accurate information about the state of the Institute. Indeed, each of us, no matter our role here, is an ambassador of Rensselaer. In some cases, you may be the only person from Rensselaer another person meets. I urge you to keep this in mind whenever you are asked about or when you talk about this university.
When I first came to Rensselaer in 1999, I was charged by the Board of Trustees to transform an institution which, at that time, had been in existence for 175 years. The Rensselaer Plan, as you know, became the road map for that transformation. It is a plan that honors and builds upon the past, while looking ahead to stake our claim in 21st century fields, such as biotechnology and nanotechnology, and to create a world-class student experience.
This vision has yielded tangible results.
- By the end of the current fiscal year, we will have hired 150 faculty since 2002. Faculty growth will continue under this budget, with the hiring of 20 new faculty in FY07.
- The ongoing investment in our faculty has resulted in improved student-to-faculty ratios, and in a more robust research environment. We have a world-class Center for Biotechnology and Interdisciplinary Studies, where potentially life-saving research is taking place, and where our expertise in engineering and multidisciplinary research is paying off by adding new dimensions to the disciplines of biochemistry and biotechnology.
- We are building a one-of-a-kind Experimental Media and Performing Arts Center [EMPAC], which is scheduled to open in the fall of 2008, providing new and unique opportunities for research and performance at the intersection of the arts and science.
- Student living and learning programs and environments have made strides with more enhancements to programs planned in the coming years.
- The Institute is more highly regarded than ever, in terms of national and international reputation. We even have the ear of the President of the United States in regard to innovation and competitiveness.
There have been many rewards but there also have been hurdles. We made the decision to grow this university during a time of unprecedented challenges to this country and the world. As a national and a global university, we are inextricably bound up with the world. The dot.com bust, September 11, 2001, recession, war, terrorism. Most of these issues require policy and political solutions, but, sometimes, also technical solutions. Indeed, the need for top-tier engineering and science education, for which Rensselaer has been renowned throughout its history, has never been more critical for our country and the world.
In last year's budget presentation in this room, I said that in order to proceed with our ambitious goals under The Rensselaer Plan, that we must expand our resource base. Specifically, that we must continue to:
- Attract a broader pool of highly qualified and diverse applicants, to enrich and be enriched by the undergraduate educational experience.
- Raise significant funds through the campaign.
- Achieve appropriate levels of indirect cost recovery from research, and grow graduate enrollment.
- Shift investment strategy from aggressive growth to absolute return.
I also said that we must have the discipline to reduce expenditures if revenues from these activities did not materialize.
I must be very frank with you that not all these revenues have materialized to the extent needed. Therefore, under the FY 2007 budget, as approved by the Board of Trustees in late February, we must institute rebaselined budgets for our portfolios. This means that all portfolios, with some exceptions, will operate at 90 percent of their fiscal year 2006 budget levels. The exceptions are those things that are so crucial to our future growth and/or critical to our revenue-generation capabilities that we cannot afford to scale back their budgets.
In addition, there are several fiscal realities we face each year, with some new challenges:
- Rensselaer has a much more modest financial resource base than other major research universities, which requires tight financial management.
- Rensselaer is a relatively tuition-dependent institution.
- The cost to educate a student is higher than the tuition "sticker price" at Rensselaer, and, for that matter, at any other college and university in the United States. The differential is covered via philanthropy, by gifts provided to support current operations and to endowment.
- Energy costs have increased dramatically.
- We have an obligation to fund a legacy defined benefit retirement plan.
With all this in mind, I want to present a broad overview of this budget that gives you a clear picture of where we are and where we are going without overwhelming you with facts and figures. And we will have time for questions at the end.
- The board has approved an undergraduate tuition increase of 5.2 percent to $32,600. This tuition is necessary to provide the quality of education which we strive to provide our students. This rate increase will keep Rensselaer in the "middle of the pack" relative to tuition rates at other colleges and universities with which we compete. The increase for room and board is 5.1 percent, which raises the overall cost of attendance 5.1 percent to $45,185. The rate for room and board incorporates projected energy cost increases, which have been significant for all of our facilities.
- Full-time graduate tuition is consistent with the undergraduate rate, at $32,600.
- Tuition rates for students in Education for Working Professionals Programs are geared to assure consistency with Institute-wide goals, enabling growth and expansion in targeted programs, and will be published separately.
- The budget provides for merit salary increases for faculty and staff as well as the continuation of Employer of Choice initiatives.
- We must refocus our efforts to fill the Constellation positions. First, let me explain where we are in this process. To date five Constellation chairs have been filled with outstanding senior research scientists. Our focus now will be twofold: filling the constellations which are supported by endowments, and completing those which already have a Senior Constellation Professor in place. The first step will help us to attract additional support for the other constellations. The second will help us to build on the progress we have made in the Constellations with senior leaders in place.
- Research expenditures are projected to grow at 4 percent. Research awards have reached a plateau in the current fiscal year, although, there continues to be significant proposal-and-award activity, as evidenced by the recent five-year, $947,000 grant from the National Science Foundation, awarded to Dr. Angel Garcia, senior constellation chaired professor in biocomputation and bioinformatics, to study how proteins behave under pressure. We expect such success to continue in FY07.
- The Education for Working Professionals program has been experiencing enrollment declines for several years. Under new leadership, Hartford program enrollments have stabilized in general programs, with growth in newly developed programs. New signature programs continue to be developed, and we anticipate that these programs will increase enrollment as well.
- Continued expansion of academic programs will continue in FY07. New Ph.D. programs in biochemistry and biophysics as well as in electronic arts have been through the internal preliminary approval process. They now will be submitted to the New York State Education Department for approval.
A new concentration in "Built Ecologies" for the Ph.D. program in architecture is awaiting final approval from the State Education Department.
We will continue to look for ways to expand and enhance academic programs to attract talented students, and to develop Rensselaer further into a world-class and comprehensive university.
- Dramatically increased energy costs have burdened families, businesses, and institutions across the country in the last year. Rensselaer is no exception. We are projecting an overrun of $4.1 million over the amount budgeted for energy costs this year, for a total of nearly $13 million. To reduce costs, we have instituted an energy-reduction plan, which sets guidelines for energy conservation on our campuses. In addition, we are reviewing buildings and programs, and instituting new airflow and energy systems, to reduce usage and costs. The plan could yield up to $1 million in savings over the next year. To make this work, we need your help, and your participation. I am sure you already are taking steps in your homes to conserve energy. I encourage you to bring that same approach and mindset to your work and living spaces on our campuses. The Division of Administration has produced a very helpful pamphlet with tips and suggestions we all can follow. As an institution, we must be prepared to deal with continuing escalating energy costs, as we also strive for long-term energy security through our research. In fact, I believe our own faculty have much to offer to the Institute in terms of our own energy posture and associated steps here.
- The FY2007 budget for capital expenditures is modest and no new major projects those of more than $5 million will commence in the coming fiscal year. The budget does provide for required renovations, repairs, and maintenance, such as those needed at the Houston Field House, and for continued work on existing projects, such as the work on West Hall.
The East Campus Athletics Village, which I have spoken about in previous town meetings, will have design work completed in FY07, and we will go through the required State Environmental Quality Review (SEQR) process. Construction should commence at the beginning of FY08. This also will give us more of an opportunity to fund raise for this initiative.
Construction on EMPAC will continue in FY07. In fact, it will be the decisive year to prepare for the opening of EMPAC. Construction will move to the interior and installation of the program-specific infrastructure.
This budget has required us to make some hard choices. We are, essentially, doing more with our limited resources. Often I have said that we are "trying to cover a king-size bed with a twin blanket." President of the Union Peter Baldwin understands this. He believes that "these calculated and methodical pulls will some day allow Rensselaer to have a king-sized sheet with a broader reach."
A process of growth and expansion sometimes can be difficult, and it always involves trade-offs. Clearly, there is risk involved in what we are doing: the risk that is in inherent in making strategic investments placing our bets, if you will on our ambitious plans, and on our vision for Rensselaer in the 21st century. But, look how far we have come, in a very short time.
As we do this, we must keep in mind that our national competitors are not standing still. Our peer universities, such as Carnegie Mellon, Cornell, and Georgia Tech, continue to press forward. Each has a larger faculty, conducts more research, has a larger endowment, and has more diverse programs than Rensselaer. Yet, we are competing with these institutions, and other peer universities, for the best students, the most talented faculty, and crucial research dollars. We are succeeding on many fronts. We have wonderful students and faculty. We are doing important things. That is why Rensselaer must move forward boldly and with confidence, as it has in the past.
So, let me outline for you what we must do in the coming fiscal year, in order to propel further the Renaissance at Rensselaer.
First, we must push forward with the $1 billion fund-raising campaign Renaissance at Rensselaer: The Campaign for Rensselaer Polytechnic Institute. As of February 28, we have reached $666 million in gifts and gift commitments. We still have far to go to reach our goal by the end of 2008. In order to propel the campaign forward, we have instituted what we are calling "mini campaigns" in targeted areas. These areas are: scholarships/fellowships, biotechnology, EMPAC, and athletics. The mini campaigns are focusing our fund-raising efforts in priority areas to enable us to offer support to talented and promising students, to complete projects, and to initiate or enhance programs.
The full realization of The Rensselaer Plan depends upon a successful campaign. Given the size of our endowment compared with our peer institutions, reaching the campaign goal is even more crucial. Simply put, it is essential to completing the Plan.
We remain a tuition-dependent institution. We must meet our projected tuition revenue targets at the undergraduate and graduate levels. This is dependent on class size and on the tuition discount rate. When you consider that approximately 90 percent of financial aid comes from our operating budget, you can see our need to garner campaign support for scholarships, so that we can continue to make a Rensselaer education possible for talented students who need support.
In fact, our undergraduates rely heavily on financial aid far more so than students at our peer institutions. For example, Table 1 indicates the high percentage (72 percent) of students with demonstrated financial aid need, and receiving Pell Grant awards (20 percent), in relation to peer and "aspirant" institutions. Table 2 shows the percentage of students graduating with debt, as well as the average debt at graduation. Again, both numbers (74 percent and $25,000, respectively) are on the high end for Rensselaer students. Table 3 further demonstrates our tuition-dependency with a comparison of our current endowment as of June of last year (more than $624 million) on a per-undergraduate basis.
But, there are hopeful signs on the horizon. So far, we anticipate that applications for fall 2006 will increase approximately 20 percent over the current year. We are continuing to focus our enrollment management efforts on increasing the depth and breadth and the diversity of our applicant pool through a variety of communications, outreach, and pipeline initiatives that we expect will yield positive results over the next several years.
Perhaps the most ambitious aspect of The Rensselaer Plan is the vision of a robust and world-class research program. This program has grown substantially since the Plan was enacted. Overall research funding and research expenditures have increased substantially since the year 2000. However, we have not yet met our goal of increasing research awards to $100 million. Therefore, we will continue to encourage a full range of individual and group scholarly activity to enable the Institute to compete in the areas of biotechnology and information technology, as well as maintain our traditional strengths. We expect that new growth in our research program will come from our investment in new and enhanced facilities, notably the Center for Biotechnology and Interdisciplinary Studies, and from our investment in new research faculty, while supporting our existing faculty.
On a national level, this may be a watershed period in regard to a public discussion of innovation, science and technology, and competitiveness. President Bush put forward a proposal in the State of the Union Address to increase federal spending on research in the physical sciences, mathematics, and engineering. He specifically has proposed an 8 percent increase in the NSF budget, and an increase of 14 percent to the Department of Energy for research. We must remain well-positioned to compete for these federal funds, and to stay in the forefront of the national discussion. To this end, we are discussing the formation of an Institute for Energy and Environmental Sciences, Innovation, and Policy, to be a platform for extended enterprise in this arena.
This is but one example of how Rensselaer is becoming a respected player in research, innovation, and policy. As a follow up to the State of the Union, we hosted a Roundtable on Innovation and Economic Development, featuring the Honorable Sandy Baruah, U.S. Assistant Secretary of Commerce for Economic Development. I also have had the opportunity to address these topics in a variety of fora around the country in recent months. As many of you know, I have spoken on what I call "The Quiet Crisis" to audiences comprising scientists, educators, policymakers, and business leaders those who are interested in developing the next generation of scientists, engineers, and technologists to maintain this country's competitive edge. Recently, I had the privilege to attend dinner at the White House and to speak to President Bush personally about his American Competitiveness Initiative and offered him ideas on gaps I believe exist in the plan.
As a global university, it is important that we engage with institutions in other nations which also are concerned with research and innovation. For this reason, a delegation from Rensselaer made a visit to Asia last spring, where we made connections with universities, businesses, and government officials. In two weeks, I will lead a similar delegation to India to meet with leaders in select government agencies, and to visit leading universities, research institutes, and companies, in order raise the visibility of Rensselaer, and to establish relationships for future collaborations. It is imperative to our growth and stature as a global university that we make these connections, and enhance the reputation of Rensselaer on the world stage.
Overall, this budget is all about risks and challenges, and, I believe, eventual rewards. We have to make tough decisions. In some cases, we must defer ambitious plans until we garner the financial support to make them happen.
However, we are assuredly moving forward. We must. We have no choice but to do so. In many ways, we are placing our bets on the future a future in which Rensselaer will lead, will inspire, will educate, and will change the world.
You cannot change the world without taking a risk. Indeed, we inhabit this geographical region today because of a risk taken almost 400 years ago by one man: Henry Hudson. Hudson sailed in 1609 for the Dutch East India Company in the 85-foot ship The Half Moon seeking a "Northeast Passage" a shorter route to Asia that would not require going around the Cape of Good Hope. Hudson left Amsterdam in early April, sailed near Norway, then took an unplanned left turn, and headed toward the New World. In doing so, he took an enormous and potentially deadly risk. He was placing his bet on information and maps he received from Captain John Smith, leader of the Jamestown settlement in Virginia, which hinted at a waterway that opened to the west. Hudson's search culminated in his trip into what is now New York Harbor and up the river named for him, getting as far north as Albany. Hudson noted of the river valley that: "The land is the finest for cultivation that I ever in my life set foot upon." We now inhabit that paradise Hudson first laid eyes, and foot, on centuries ago.
This country, this region, this university all were founded and developed by persons unafraid to risk, confident that their visions of the future would take the world in a more propitious direction, for the benefit of the greater good. Indeed, from Henry Hudson to this country's Founding Fathers to Rensselaer's founding fathers, Stephen Van Rensselaer and Amos Eaton, to we who are here today all have imagined a larger world, a better world, and have created that future. The coming year will test us: our resolve, our commitment, our belief in the vision of Rensselaer. But, I believe, we will navigate successfully the short-term obstacles ahead, to become a stronger institution and community, determined to achieve our goals, and to be a force for positive change, in this young century, as we have been in the past.
We must do it. We will do it. And most important, I believe that we, the people of Rensselaer, can do it.
Before I close, I have some important information to share, and an exciting announcement to make.
First, as some of you know, this year, Rensselaer is preparing for a visit from the Middle States Commission on Higher Education, which is the accrediting agency for the Institute. In fact, Rensselaer first was accredited by the group in 1927. In anticipation of the visit, we have prepared a Middle States Self-Study Report, a document that represents nearly 20 months of work by more than 100 members of the Rensselaer community. The draft report is the culmination of efforts by working groups to collect existing data and reports, to evaluate that information, and to produce a report of their findings. This Self-Study Report, along with supporting documentation, has been forwarded to the chairman of the Middle States Self-Study Review Team: Dr. Jared Colon, President of Carnegie Mellon University. He leads an eight-person committee, which will be on the Troy campus April 2nd through 5th.
This is an important process for Rensselaer. I thank the many members of this community who have worked on this report for their time, energy, and efforts, and I thank you in advance for the work to come when we host the committee. This is an opportunity for us all to learn more about this institutionóits accomplishments, its challenges, and its role in promoting education excellence.
Now, as has become a tradition at the Spring Town Meeting, I would like to announce the names of the Commencement speaker and the honorary degree recipients. The speaker for Rensselaer's 200th Commencement will be Retired U.S. Army General Wesley Clark former Supreme Allied NATO Commander, who contended for the Democratic presidential nomination in 2004. General Clark was a top West Point scholar, graduating first in his class of 1966, with a Bachelor of Science in Civil Engineering. He was awarded a Rhodes scholarship for two years of study in England at Oxford University upon graduation from West Point. He subsequently served in Vietnam and commanded battalions in Colorado and Germany, taking units that had failed inspections, and transforming them into outfits receiving top ratings.
In February 1970, while serving in Vietnam, the 25-year-old Captain Clark was shot four times by a sniper in the jungle. Despite being seriously wounded, he managed to shout commands to troops, who launched a counterattack, defeating the enemy force. For his valor, he was awarded the Bronze Star and the Silver Star. He then spent a year in rehabilitation to recover from his injuries he taught himself to walk again, and to use his injured hand, defying the grim prognosis of his doctors.
He went on to become the commanding general of the Army's National Training Center during the Persian Gulf War, and later conducted three emergency deployments to Kuwait as the commanding general of the 1st Cavalry Division at Fort Hood, Texas. He commanded NATO forces during the war in Kosovo, winning in a way few thought possible with air power alone, without a single allied combat death, while holding together the alliance of 19 nations.
He exemplifies the West Point mission of providing the nation with leaders of character who offer a lifetime of leadership to the nation, both in and out of uniform.
Our honorary degree recipients likewise are distinguished and influential individuals in their fields, who exemplify the Rensselaer themes of global leadership, entrepreneurship, and innovation.
As you know, we are celebrating the 75th anniversary of our School of Architecture this year. So, we are celebrating:
Peter Bohlin, Class of 1958, who is an outstanding Rensselaer alumnus, who has achieved exceptional distinction in the field of architecture. He is respected not only for his design of houses in the great American landscape tradition, including the design of many houses for Bill Gates, but he also was Steve Jobs' choice to design Apple stores worldwide. Peter Bohlin is the founding principal of Bohlin Cywinski Jackson, which served as co-designer for the Rensselaer Center for Biotechnology and Interdisciplinary Studies.
Santiago Calatrava is one of the most influential and ambitious engineers and architects in global practice today. He designed the master plan for the 2004 Summer Olympic Games Sports Complex in Athens, which included his soaringly spectacular designs for the Olympic Stadium, the Agora, and the Nations Wall. His highly influential style combines striking visual architectural elements which interact harmoniously with rigid principles of engineering. Mr. Calatrava's works have elevated the design of some civil engineering projects, such as bridges, to new heights. He has designed numerous train stations, which have been heralded for their bright, open, and easily-traveled spaces.
Entrepreneurship is important at Rensselaer.
Frederick W. Smith is founder, chairman, president, and CEO of FedEx Corporation. FedEx began as a classroom idea while Mr. Smith was an undergraduate at Yale. Today, FedEx operating companies handle more than five million shipments every day. Mr. Smith is the former chairman of the Board of Governors for the International Air Transport Association and the U.S. Air Transport Association. He is a member of the boards of the Business Roundtable, Business Council, CATO Institute, and Mayo Foundation. He served as chairman of the U.S.-China Business Council, and he is the current chairman of the U.S.-France Business Council. Mr. Smith was named Chief Executive Magazine's 2004 "CEO of the Year." Business Week recently included him in its profiles of the greatest innovators of the past 75 years. As many of you know, he received the William F. Glaser Entrepreneur of the Year award at Rensselaer in 2004.
These three honorary degree recipients will participate in the Commencement Colloquy, on Friday, May 19, at the Center for Biotechnology and Interdisciplinary Studies. Its theme is Global Leadership and Innovation. These remarkable and accomplished individuals epitomize this.
Source citations are available from the division of Strategic Communications and External Relations, Rensselaer Polytechnic Institute. Statistical data contained herein were factually accurate at the time it was delivered. Rensselaer Polytechnic Institute assumes no duty to change it to reflect new developments.