September  22, 2004     

 

 

To the Faculty Senate:

 

I have reviewed the document entitled “Economic Talking Points” distributed by Professor Bruce Nauman and formally request that the following comments be read into the minutes along with this document.

 

Using just one source of data – in this case the Institute’s IRS-required 990’s over several years – does not capture the entire picture of institutional growth and change that occurs at a university over such a wide time span. A few examples:

 

·         By looking strictly at enrollment numbers that are reported to the IRS on the form 990 ignores the fact that the number of credit hours taken per graduate student has increased substantially over recent years.

·         The document uses the CPI as the inflation factor when converting to constant dollars for most tables, yet the majority of the higher education community uses the Higher Education Price Index (HEPI). Since 1983 the Consumer Price Index has increased 85 percent while the HEPI has increased 122 percent; and since 1999 HEPI has outpaced the CPI by a factor of nearly 2:1. Faculty salaries nationally have contributed significantly to this increase because of the intense competition for outstanding faculty.

·         The 990 form incorporates accounting conventions that are reflected in the actual numbers cited but are not necessarily representative of actual operations. One case in point is the section labeled as management expenses. In 2002 there is a substantial spike in the data, but it is entirely due to a pension accrual that has absolutely no relevance to management operations.

·         Trending 990 information exclusively without considering other factors assumes “ceteris paribus”. Institutions change, the environment in which they operate is dynamic, and all other things are not equal.

 

Following are some more specific reactions to the document listed by section:

 

Enrollments

 

·         The document indicates that undergraduate enrollment has risen to highs over the measurement period. This is correct, and it is also part of the Rensselaer Plan to have undergraduate enrollments at an optimal, stabilized level of 5,000 undergraduate students. When 2003-2004 data are available it will be clear that this has continued to be the case as we attempt to manage the size of the incoming class and forecast the graduation and attrition rates. Having a stable undergraduate enrollment of approximately 5,000 ensures that we have adequate resources in place and does not overextend the infrastructure of the institution in terms of housing and classroom space. Yet, despite the increase in undergraduate enrollments over the period measured, we have made significant progress in reducing the student-faculty ratio through our aggressive faculty hiring program.

·         The document implies that graduate enrollment has fallen below the base year cited. This is correct and was clearly stated as a possible outcome of the Graduate Tuition and Student Support Policy and one we were perfectly willing to accept to strengthen the overall program. It also does not capture that the reduction in graduate enrollment headcount is concomitant with increases in the total number of credit hours, something that the 990 does not measure or reflect. For example, during fall 2003 the Troy campus matriculated graduate student enrollment declined as

 

 

 

anticipated, falling to 1,378. However, the total number of credit hours taken by students reached a ten-year high this past year of 14,502 and represented an average number of 11 credit hours per student, compared with 7 credit hours per student in 1992-1993. This is all part of the plan to move these graduate students to a full-time level and is not something that is apparent when just looking at the data in the 990’s. There is also a change in balance between the number of PhD and MS students that while consistent with the Rensselaer Plan, is not apparent in the 990’s. Since 1995, the ratio of matriculated graduate students – PhD to MS on the Troy campus has increased to 69% from 46%, again, all part of the plan.

 

Public Sector Gifts and Grants

 

·         It is correct to cite the positive changes now underway in the campaign. In addition, we are now seeing some very real positive effects of the silent phase of the campaign – look around.

 

Government Grants

 

·         I realize that the data from the most recent 990 is not yet available, but when it is, it will be clear that the revenues realized are beginning to reflect the very real growth in awards. Revenues are up 20% in 2004. Awards too are on the rise, increasing significantly from $42 million in 2001 to $86 million in 2004. Given that expenditures lag awards by a year or two, this bodes well for the future growth.  Again, this is entirely consistent with the Rensselaer Plan and is not necessarily quantifiable from merely looking at the 990’s.

 

·         Contrary to what is portrayed in the document circulated, Rensselaer is not “caught in the doldrums”. We are making significant progress, despite this negative perspective. How can the significant progress we have made in areas like Nanotechnology, IT, and Tera-Hz (as well as many others) be part of the “base establishment”?

 

Program Revenue

 

·         The document indicates that there has been a major increase in student-derived income over the years. This is entirely predictable when one examines the planned growth in undergraduate enrollment to an optimized level of 5,000, and in the full-time equivalent number of graduate students.

·         The document indicates that investment income has been poor in recent years, but market performance has in general also been poor in recent years. One of the key goals of the campaign is to strengthen the endowment and thereby improve investment income.

·         The growth in student related income is a direct result of the increased revenue from graduate students and, as such, would appear to support the changes resulting from  the Graduate Tuition and Student Support Policy implemented several years ago.

 

Management Expenses

 

·         As I indicated in the introductory paragraph, 990 management expense data alone do not tell the whole story. The dramatic increase to $94,783k from $48,756k in the prior year is entirely due to a $45,820k increase in pension liability. In addition, there

 

 

 

has been an increase in management expenses as we build the infrastructure required to support the increase in construction management, research administration, environmental services, safety and maintenance, and to manage an institution made considerably more complex as a result of the very positive outcomes of the Rensselaer Plan, as well as real cost increases in insurance, utilities and employee benefits.  However, the increase in management expenses, exclusive of pension accruals, from 1999 to 2003 is $19 million or 39%, substantially less in both dollars and percentage than the increase in program service expenses for the same time period.

·         The document indicates that we are in “a period of approximately flat faculty count”. This is nowhere near an accurate statement and no data are provided to substantiate this incorrect supposition. The facts are that the number of Tenured/Tenure-track faculty on the Troy Campus has increased from 333 in fall of 2000 to 382 this fall (2004).  This represents an increase of 15% with an additional 18 hires projected for the rest of the current year.  This does not count the Constellation hires.  We are hiring faculty at an unprecedented rate of 30-40 per year, again, a conscious decision to invest heavily in faculty to realize the Rensselaer Plan.

·         The document overlooked additional information included in the 990’s, but not included in the document as distributed --  increases in program services (services that directly impact the students at Rensselaer in academic and student-related items) increased markedly from 1999 to 2003. Specifically, program services increased from $180,942k in 1999 to $258,565k, an increase of $77,623k, or 43%. We are also investing heavily in the physical plant; besides the new buildings, Bioteh, EMPAC, Boiler Facility, and Parking Garage, we continue to aggressively renovate classrooms, residence halls and other campus facilities.

 

Assets and Liabilities

 

·         Here it is indicated that the liabilities have increased due to long-term debt. This too is a direct result of investing in the Rensselaer Plan, a manifestation of the increased building program and paying for the deferred maintenance. All of this will better position Rensselaer for the long-term.

 

Salary Data

 

·         Here the document cites the increase in the number of Officers of the Institute and the average raise for these individuals. The implication of excess here assumes everything was fine prior to 1999, and ignores the status of the institution in 1999 and prior years, i.e., the financial status and the decline in campus infrastructure, faculty numbers, etc.   The changes made have included the addition of a VP for Research, a VP for Human Resources, and the elevation of an existing position, the Dean of Computing and Information Services, to Officer status as the CIO. Additionally, there were salary adjustments made to these salaries to bring them more in line with comparable positions at other private, top-tier universities.

·         Two other items are rather conspicuous by their absence in the narrative synopsis:

o        As indicated in the data below, which are published annually in the Chronicle of Higher Education, the five highest salaries at Rensselaer include both faculty and administrators. In 2003, 3 of the top 5 were faculty; in 2002, 2 of the top 5 were faculty and 1 was dean; in 2001, 3 of the top 5 were faculty; in 2000, 3 of the top 5 were faculty and 1 dean; and in both 1999 and 1998, 4 of the top 5 highest paid individuals at Rensselaer were faculty.

 

 

   Five Highest Paid Individual at Rensselaer per 990’s

 

2003

 

 

 

1998

 

 

Shirley Ann Jackson

President

  644,135

 

Byron Pipes

President

 287,748

Daniel Berg

Professor

  390,700

 

Daniel Berg

Professor

 279,585

George P. Peterson

Provost

  254,216

 

Shyam Muraka

Professor

 202,139

Michael Zucker

Professor

  242,157

 

Frank Dicesare

Professor

 198,176

James Tien

Professor

  240,480

 

Martin Glicksman

Professor

 194,078

 

 

 

 

 

 

 

2002

 

 

 

1997

 

 

Shirley Ann Jackson

President

  490,000

 

Byron Pipes

President

 273,070

Daniel Berg

Professor

  421,078

 

Daniel Berg

Professor

 227,682

George P. Peterson

Provost

  243,753

 

Robert Block

Professor

 194,751

Martin Glicksman

Professor

  234,885

 

Gary Judd

Dean

 181,100

William Baeslack

Dean

  231,595

 

Richard Lahey

Professor/Dean

 176,400

 

 

 

 

 

 

 

2001

 

 

 

1996

 

 

Daniel Berg

Professor

  421,032

 

Byron Pipes

President

 250,500

Shirley Ann Jackson

President

  375,000

 

Daniel Berg

Professor

 246,248

Richard Lahey

Professor

  248,045

 

Gary Judd

Dean

 173,800

George P. Peterson

Provost

  218,340

 

Richard Lahey

Professor/Dean

 171,307

James Tien

Professor

  217,800

 

Doyle Daves

Provost/Dean

 157,500

 

 

 

 

 

 

 

2000

 

 

 

1995

 

 

Shirley Ann Jackson

President

  310,329

 

Byron Pipes

President

 215,500

Daniel Berg

Professor

  292,506

 

Daniel Berg

Professor

 212,672

Doyle Daves

Actg Provost/Dean

  213,105

 

Harry Sneck

Professor

 210,182

James Tien

Professor

  207,014

 

Richard Lahey

Professor/Dean

 164,586

Richard Lahey

Professor/Dean

  194,143

 

James Tien

Professor

 156,082

 

 

 

 

 

 

 

1999

 

 

 

1994

 

 

Daniel Berg

Professor

  306,701

 

Byron Pipes

President

 215,500

Shyam Muraka

Professor

  196,102

 

Gary Judd

Dean

 154,000

Martin Glicksman

Professor

  186,302

 

Arthur Bergles

Professor

 150,390

Jack Wilson

Actg Provost

  185,000

 

Lester Gerhardt

Associate Dean

 147,439

Richard Lahey

Professor/Dean

  184,000

 

Doyle Daves

Dean

 140,500

 

 

 

 

 

 

 

 

o        As shown in the Table below, faculty salaries have also increased substantially since the fall of 2000 (FY 1999)  According to this publicly available information, the average salary for Assistant Professors, Associate Professors and Professors have increased 24.4%, 35.0% and 18.4%, respectively, from the fall of 1999 (FY 2000) and the fall of 2004 (FY 2005) (does not include Officers of the Institute).

 

Tenured/Tenure-Track Faculty Salary Analysis (FY '00 - FY '05)

 

 

 

 

 

 

 

 

 

 

Rank

Fiscal Year

 

Assistant

Annual

 increase

Associate

Annual

 increase

Professor

Annual  increase

 

 

 

 

 

 

 

 

2005

 

72,933

1.84%

87,401

12.87%

108,783

1.70%

2004

 

71,618

5.38%

77,438

4.46%

106,969

2.75%

2003

 

67,961

6.36%

74,133

5.84%

104,101

3.72%

2002

 

63,896

4.60%

70,045

3.96%

100,371

4.93%

2001

 

61,088

4.17%

67,378

4.11%

95,653

4.13%

2000

 

58,644

 

64,719

 

91,856

 

 

 

 

 

 

Conclusion

 

It appears that this document presents only a portion of the information from a single source and uses it to attempt to describe the current situation, while not factoring in the impact of the strategic vision or Rensselaer Plan, the changing environment or the dynamics that currently exist in higher education.

 

I look forward to working with the Faculty Senate to continue to clarify these data and to identify issues of interest and importance to the faculty and Rensselaer.