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State of the University Address, 2002

President John T. Casteen, III
April 25, 2002

(Edited from the full text of the speech.)

I think we all know that the last several months have been perplexing and perhaps discouraging times for all of us, certainly for anybody who's involved in or dependent on the budget of the State of Virginia. The state's managerial and financial and budgetary problems have been very much in the news. They're problems that really do matter here within the University because so much of our enterprise is either financed in whole or in part or regulated in whole or in part by the state. A lot of you have taken time in these months to come to me or to your deans or to your vice presidents and have offered comments and suggestions and occasional expressions of frustration and a fair number of questions. All of that advice has turned out to be eminently useful, some of it quite frankly brilliant. With regard to both the state's general situation and the University's specific condition and future, your advice and your counsel have turned out to be useful and productive more times than you can imagine, so I'm grateful for that.

I would like to start by thanking you, which is to say students and staff and faculty and neighbors and alumni, and especially thanking those of you who've served in the Faculty Senate and the various employee relations councils and on the Board of Visitors for your concern about the University and your attention to its needs in what are becoming for us unhappily familiar hard times. We have seen hard times before and your participation has made a great difference.

I understand that Jack Ackerly, the University's Rector is with us today and perhaps other members of the Board. Jack, thank you very much for coming. I should say that we've especially appreciated the way in which alumni and Board members and others in a position to make some difference have committed themselves. They've really gone out on limbs to make the good things that have happened happen and we are in your debt.

This is really about longer-term issues. The current issues are serious. I think they're serious both for now and for tomorrow, and point to the continuing need for the University to become increasingly self-sufficient. This need has become a fundamental reality of the world in which we operate. When I watch what happens to finances in Richmond I see there a motive to do more and better of what we have done in recent years.

A number of the issues with which we are grappling are significant because they touch the entire community. I have a little bit to say in the course of these remarks about the current discussion of what is called the living wage issue. I'd like to talk a bit about salary issues including those that touch classified personnel as well as the various categories of faculty. I think we need to try to understand the state's intent to use modest bonuses in place of base salary adjustments and what that might mean for different groups of employees or individuals.

And obviously we've got to talk about the budget cuts and about how state support here compares to state support in the other states that support our primary competitors within the larger world of higher education. And I'd like to say a bit about students' experiences here. I think we want to begin once again the process of addressing the needs of a new generation of students.

And finally I see this address as something I owe you each year by way of expressing my own sense of our condition as an institution and also my own aspirations for what we can be and will be a bit down the road.

Of all the topics about which I have received advice, the budget issues have been the most significant; so let me start with those. I think it's fair to say that the unfolding of the news in the last six months or so has itself been a major issue. The entire story was not available at all until the last gavel was banged on the last General Assembly session. Of course no state action is ever quite a done deal until a year passes because of the way in which the state revisits the old budget in the face of financial difficulty. But in any event, the pieces now seem to be all on the table, at least as they affect the current year and I suspect that most of what we're going to know about the next biennium is also on the table. The pieces are there and we can assess the damage done and also the remedies that are available to us. I'm persuaded that this crisis is survivable as was the last one, that as we came out of the last one in better condition than we entered it, we will do so this time. We will do so because of the same kinds of commitments and the same determination and frankly the same work beyond the call of duty that you contributed to make things work for us 12 years ago.

We've learned the habit of self-sufficiency in this time. We've learned that we can in fact finance our essential ventures. We've learned that we can in fact change the way we manage the enterprise, and, frankly, the most important thing we've learned is that we can set priorities. The priority here is at it has been--the academic enterprise. The first business of this place is scholarship and teaching. Faculty and student scholarship, the kind of teaching that goes on in the classroom and also the kind of teaching that's involved in public service. Those are the things that we value, so if one asks what's most important and what's next important, the scholarship, the teaching, these are the values. These are the things we will sustain first and foremost.

It's important to say that since the Wilder reductions of 1990 we have not seen restoration of more than a little bit of the money the state took away. The issues that we face today are complicated by the lack of sustained attention over time the kind of attention that other states did pay to higher education. The lack of that kind of attention over time led to the damage done from 1990 to 1992. You may recall that in prior speech we had numbers to show that by 1996 all of the states with which we compete had restored the funds taken away in the recession of 1991 and '92. Only Virginia has failed to do that, and at this point the reductions in Virginia are as you probably know, historically deep reductions and so in understanding our current financial situation, you have to understand what it means to have carried forward an unacknowledged change in the state's policy with regard to its support for higher education.

Still, I am optimistic—for various reasons. I am optimistic because of our history and our values. I don't know that we would normally digress in talking about a budget to talk about institutional values but frankly they matter. If one wants a culture to thrive and to be vibrant it has to be a culture in which people believe and the fundamental beliefs, the sum of the experiences that each of us encounters here and carries away, have evolved over some 185 years, even as our national grasp of the meanings of human equality and natural human rights has evolved. This University is not the small provincial boys' school that it was in 1825. That was a provocative experiment, as you know. All of us in a sense grow into this place by learning the nature of that experiment. It was an experiment whose founder secured more reliable and frankly more generous support from his friends and acquaintances than from the state that he intended to serve in creating its first university. We're now a university of global stature built on the foundations that were laid at the beginning and regularly since then by those who committed themselves to the place.

Enlightenment values that led to the creation of the place endure. We believe that this has to be a locus of knowledge, that the knowledge must in part generate education to students of genuine talent, but regardless of whatever divisions or distinctions we may use to describe our students, they are in the end our very first commitment. We believe that education should be focused on preparation for human freedom. Our founder believed that free minds were the seedbed of free nations and then, as now, the vision here was that knowledge is power and health and happiness. Goods belong to individual persons by virtue of learning, but in the aggregate of all of us, these goods benefit and sustain our republic.

Values sustain us, but they do not pay the rent. There is still a fundamental problem with regard to the way in which the University is financed. The state faces a $3.8 billion budget deficit accumulated over some three years. That is an historically large deficit as a proportion of state appropriations. No one has ever seen anything quite like it and frankly as a proportion of total revenue; it's on the scale of the historically large deficit reportedly seen in California. It's the result of spending vastly more money than the state has taken in the form of taxes. It is in a minor way a result of the recession that appears to have occurred last spring. It's also a fundamental challenge for elected officials and for the people we think of as the state bureaucracy whose first obligation is to sustain and to monitor the state's commitments.

In the current fiscal year we've given back $4.8 million of the original appropriation. Next year the cut comes to $25 million or 16% of the remaining general fund appropriation. In 2003-4, the cut will be some $33 million or nearly 21%. Over the biennium that begins in July, the total reduction from last year's appropriations comes to $58.7 million dollars.

What about remedies? About half of what the state has taken away will be replaced by increased tuition charges to students. This was the strategy that the state told us to follow in the early '90s, and, as you recall, it became eventually a matter of major political difficulty for state officials to defend the tuition increases. At this point, the situation in regard to tuition is this: in-state undergraduate students face a 9% increase; out-of-state undergraduate students, an 8.5% increase; instate graduate students, 10%; out-of-state graduate students, 2.3%. That said, tuition will remain substantially below the tuition of universities with which we compete for students. Indeed, tuition charges will be lower for instate students next year than in 1993-94.

At the same time, the increases are substantial. I think it's important to realize as we move through the daily interactions with our students that for many of our students' families, indeed for our students who are self-sustained, these increases are a significant issue.

How do we deal with this internally? For one, the base budgets of the academic departments and the administrative departments have been cut by 4.35% and 4.6% respectively. And these budget reductions will make a difference within the University. I want to report to you what the differences are likely to be. I should start by saying that unlike the vast majority, perhaps all of the other public colleges, we, that is Mr. Block and Mr. Sandridge and Ms. Sheehy and Ms. Reynolds, have worked out, ways to address the cuts without laying off our people. There's a basic reason for this approach. If you want to look at what it took for us to experience that remarkable run-up in the national rankings and in the University stature in the early '90s, it is that we did not cut into our basic assets in that period. We kept our people in place. We committed our resources to our people. It worked then. I think it'll work now. These are the changes that you will see.

First, we will not fill some 26 instructional positions that are now vacant or are occupied by temporary faculty. Over time, fewer teaching faculty translates into larger class sizes, especially in the lower division undergraduate courses where we teach writing and foreign language and mathematics and so on. That's an effect that will be visible in the course of the next year.

We're concerned that in the out years courses required for majors may be oversized or indeed oversubscribed if there is an absolute limit. And we're working with the deans and the department heads to do everything possible to prevent insufficient course offerings. Additionally, we will not be able to fill some 20 positions for graduate teaching assistants next year. Again, that translates into somewhat large sections and eventually probably fewer sections with lower division courses historically taught by these junior members of the faculty. Many of the actions are to be taken in the College of Arts and Sciences. The effect this time on the College is less dramatic than it was earlier because the other schools are better able at this point to manage larger shares of their own finances. Even so, it's important to register that the College enrolls in its graduate programs something on the order of two-thirds of our enrollment. It is important to register that the dean is dealing with a $3 million reduction within the larger framework of what I described.

In other areas such as support services, vacant positions will disappear fairly quickly. Thirty-five non-instructional positions in academic and administrative departments, for example, are scheduled to be phased out. We will inevitably have to cut back on the maintenance of the buildings and the grounds. And I should acknowledge that one of the things that concerns me most is that in a place that has arguably the most expensive set of buildings and grounds to maintain in the country, $110 million shortage in the authorized maintenance reserve fund along with the reduction in the appropriations act that will take away 23% or $150 million in 2004 of what remains, sustaining the character of the place is going to be a real challenge over the course of the next two or three years.

Libraries, equipment budgets, other kinds of budgets, will feel similar pinches. In some cases, we can mitigate the damage. For example, there are some real reductions in support in the first year seminar program. On the other hand, the instructional value of that program is absolutely essential and Mr. Block was able to assure me last night that we will not reduce the number of offerings for students, teaching a seminar himself, even though we will suffer somewhat in the financial support for the program.

Perhaps the most troubling aspect of the current financial situation is our deteriorating position amongst our peers in terms of per-student spending. Comparative figures for the 2001-02 tax appropriation per FTE are $13,000 here, $24,000 at UNC-Chapel Hill, $22,000 at UC-Berkeley, and $17,000 at UM-Ann Arbor. While some of those states are reducing appropriations, none is cutting as deeply as Virginia is. These disparities will grow, even as demands for increased services grow. In truth, we are efficient and economical in delivering a first-class education at bargain-basement costs. US News and others say this to the world each year. Yet, these new cuts, call for even greater efficiencies, and together we will find them.

In truth, we are more efficient and more economical in managing our resources. Everybody who reads U.S. News knows that we deliver a world-class education at the lowest expenditure per student or per faculty member, for that matter, that's been recorded anywhere in the top tier of American higher education. Unhappily we're going to be better at that next year. The saving grace is that private fund raising which has continued to grow at the predicted run rate that Mr. Sweeney calculated at the end of the capital campaign in December of 2000. Indeed, the figures for this year suggest an even more dramatic increase in the run rate, which I will describe momentarily.

One of the challenges we face is to retain faculty and to reward faculty appropriately even in bad times. I should explain some structural differences in salary policies before proceeding. Classified salaries are driven almost directly by the appropriations act. Classified salaries are a central item not assigned to the University until after the act was passed, whereas faculty salaries are based on merit assessments and not on a scale. Classified salaries go into what's called a central appropriation item in the budget bill and they're determined by the central appropriation. For faculty salaries, what we receive is a minimal amount of support. The average authorization is always greater than the appropriation.

Mr. Block and Mr. Sandridge have been at work recently on how to provide for a 5% pool to cover a 5% average salary increase for faculty members promoted or receiving tenure in the course of the year; that is, moving from assistant to associate professor and from associate to full professor. I'm happy to tell you that the deans and department heads will be receiving the authorizations for these increases. I should tell you also that we are facing substantial efforts on the part of other institutions to hire away faculty from us. To my knowledge, the deans and the department heads have succeeded in persuading those who have been most heavily recruited to remain, but we know from the last time around that as financial straits become narrower, it becomes increasingly complicated to identify where we are at risk and to retain people we need to retain. I ask for your help in that, especially if you're a department head or a dean. Unless Mr. Block or Mr. Sandridge know about the problem, it's very difficult to address it. Also all of us know that the deans have a crucial role to play. Quite often when there's a salary issue, the dean's reserve or the dean's discretionary fund is the first place one has to go in order to find the dollars.

The state is taking certain measures to relieve some of the pains. Before the end of this fiscal year, although I'm told it'll be paid out about the first of August, classified employees will have an option either to elect to receive a 2.5% bonus or 10 additional paid days of leave time, or some combination of the two. I'm told that the bonus actually turns up in the September 1 payroll check if you are a classified employee. Including it in this way, in the regular checks, is supposed to minimize the tax withholding impact of the increase. For general and teaching faculty, we're told that we will have the flexibility to award what amounts to bonus discretionary payments at an average, that is, a pool calculated average of 2.5% of the total payroll, but that we are to do that on the basis of meritorious service. The deans and the department heads will have to do some kind of service evaluation in order to determine how much individual faculty members actually receive.

In the Medical Center there's yet another situation. We believe based on current operating projections for the Medical Center that we will be able to pay through the Medical Center a bonus payment comparable to that approved by the Governor for employees in the other parts of the University.

Now, I think all of this is good. It is not a base pay increase. It does not adjust for the cost of living. It's not an inflationary adjustment, so it's not great, but on the other side, if you remember the financial forecasts made in January, it's better than that.

Capital projects are as they were the last time around in the General Obligation bond bill of 1992 a somewhat different story. Early in the session, Senator Chichester and Delegate Callahan, who eventually found support from the General Assembly and then an agreement with the Governor on the matter, put together and endorsed a $1.2 billion capital outlay package for colleges and universities across the state. It's a complicated package, but an important development because it's the first time in Virginia's history that the state has tried to put into place a predictable capital outlay budget rather than having capital construction funded either by windfall money and surpluses or by windfall money as it turns up in General Obligation bond factors. This is a four-year or six-year (depending on how you analyze it) plan that begins to tell us what to expect from year to year--a big improvement. $845 million of that money is to be voted by the voters as a General Obligation bond referendum in November and obviously we'll be working with the Governor and the legislature and others to try to persuade the voters that voting for that is a good thing.

We're working also to sustain gains that have been made in recent times. Over the last 18 months, market adjustments for the starting salaries paid to entry level classified employees in the lowest wage ranges went to at least $8.19 an hour and the average salary for classified employees in pay band 1 advanced to $18,895 a year or $9.08 an hour. In these instances, what we've done is used University moneys to adjust wages to the level that the marketplace and the customary financial analysis says are for the wage categories fair and competitive.

I should say that the wages paid to employees of firms that contract with the University present a more complicated and difficult set of issues. We believe that everyone should be paid fairly and at the same time recognize that wages are driven by many variables and these include the regional marketplace for services; that is, what's paid in the region; employees and employers' commitments to one another, for example, commitments that turn up in the private sector in collective bargaining agreements; job responsibilities; the value of fringe benefits provided as part of the compensation package, and sometimes as is the case with the State of Virginia at this time, employers' ability to pay. The core issue in this year's compensation package for faculty and for staff has been the state's ability to pay.

When you look at contractual services, several other factors are at work. For one, we need to recognize that students and patients ultimately pay essentially all of contractor charges to the University. We look within the capacity we have in the law for fair prices, for high quality and we look certainly for contractors who have a track record of conforming to the laws that exist with regard to fair treatment of employees. These contracts often have a long term. Some of them are for five years. We will continue to review our contracts when they come up for renewal to assess performance and fairness and other factors in deciding which competitor prevails in getting a contract.

In recent weeks, an organizing group outside the University and a number of persons within the University have advocated changes in the contracting rules to require contractors to pay more than the legal minimum wage to their employees. I have to say that our legal capacity to do what's being asked is anything but a subtle matter. The procurement act simply does not address this kind of proposal. But it could. The first logical step for persons who want to change the rules for contractors is to persuade the General Assembly to put them into law or to persuade the Attorney General to issue an interpretation of it that's favorable to the changes that are desired. The law determines what we can do. Or alternatively, in the private sector even under Virginia law, organizers might seek agreements directly with contracting employers, that is, with the contractors. So far these logical first steps to change the legal environment simply have not been taken.

The issue inspires strong feelings and some nagging impatience in many of you and certainly in me just as any question of justice should. On the other hand, if one is working within the context of the law, impatience is sometimes the enemy of results. The steps that I've described are necessary steps in order to change the situation if it is the desire of those who support it to change in a permanent way. The matter is a bit complicated because in addition to the Procurement Act, there are also state regulations. As a state agency we obey the laws. The general counsel has informed us that we really must have instructions from the General Assembly or a major regulatory change if we are to alter the terms on which contracts are awarded and enforced. I'm going to follow whatever success the organizing group and its backers here in the University may have with the General Assembly or with the Attorney General or with employers and we'll periodically report to you on progress in this regard.

I've been asked to make observations on whether the situation today is worse than in 1990 and 1992. I think the answer is no. We're better organized to deal with adversity today. We have a greater capacity to deal with the issues that the General Assembly has specifically passed over to us and we've learned how to raise some money. The situation that was originally provoked when Governor Wilder cut the budgets of state colleges and universities remains beneath the radar, but it's there. The state never restored what it confiscated early in the last decade, and that's a situation that you see most dramatically in those comparisons with appropriations for students and other universities.

Funds from individual and foundations have let us move ahead. In fact, as I mentioned, the run rate, the annual predictable rate of funds received has gone up even above the projections that we had in 1999 when consultants looked at this issue for the Board. We were told then that in order to maintain position and deal with expected future state financial problems, we would need to be able to raise $250 million a year by fiscal year 2005. In the current fiscal year, the most recent reported total--reported at the end of February, is $201 million. We're now projecting $240 million raised by the end of the year. That run rate frankly is a mark of a success that your deans and Mr. Sweeney and others have achieved in the work that they do. We learned in the last campaign how transformational this kind of money can be. So, we have commenced planning the next campaign.

Philanthropic giving, however, is not a panacea. It doesn't fix everything that's wrong. For example, all but 3% of the money that we raised in the last capital campaign came with strings attached. There were conditions on how much of the money we raised could be used. Build buildings. Although the money is earmarked for specific projects, the need remains to increase that kind of resource as a way of providing the flex that the deans and Mr. Block need to do their jobs. What the campaign does do, what it has done, and what the next one will do, is allow for expansion of the mission, for building excellence in areas where the University has historically been weak. Sometimes the impact isn't that readily visible, but frankly it's all around us. It's in named buildings and endowments. We've received this year some $33 million in gifts for operations that come from alumni and parents and friends. The annual giving total which used to be a fairly small number is now core support for individual schools, for the libraries, for athletics, for other areas. Deans use these moneys in all sorts of ways. They cover student financial aid costs. They cover faculty salary support. They seed new research enterprises and they pay for some of the daily administration of their schools and, in some cases, for all of it.

And we believe that the success rate that I was just able to report is the best predictor of what we can do in response to this downturn in state support. The situation I would say is difficult, but not dire. We know from history that hard times do give way to better times. A lot of the resistance to the reductions that came in the General Assembly this year, individual members who fought tooth and nail to prevent them, a lot of that reflects a growing perception that indeed the colleges and universities paid the bill the last time the state got into trouble and it's time to balance things up.

To digress from these remarks, I need to put the financial situation of state colleges and universities into the context of two other things. One is chronic under-funding of the public schools, which is a fundamentally important issue in the most densely populated areas, because in Fairfax, for example, for every taxpayer dollar paid, the state keeps about $.80 and returns to localities about $.20 cents-- for their schools. Taxpayers in Northern Virginia have a very real complaint with the system. The same goes for transportation. Five years ago the state stopped paying for new highway projects. The traffic jam that is now the beltway around Washington for about 8 of the 24 hours of the day is a direct consequence of failure to carry through on plans that were drawn in the late '80s.

Some words about where we go as an institution--we continue the progress toward what we've called interdisciplinarity. We know now that departments grow stronger by interaction with others, that faculty careers are no longer linear. Many successful faculty members nowadays work across disciplinary boundaries. The Institute for Practical Ethics, the Center for Global Health, the programs in media studies, American studies, only a few examples of the ways in which the phenomenon of interdisciplinarity has changed the academy.

Regardless of events following 9/11, we also know that we have to become more international. I have had something I did in the early '70s on my mind in recent days in this regard. I was teaching at Berkeley in those days and took part in a study of the availability of courses in Asian languages, especially South Asian languages, at a time when we had about a million persons on the ground in Vietnam. I found one American university, Brigham Young, teaching Vietnamese and that the course was restricted to young people who were to become Mormon missionaries. No other American university including our own felt it was important to know the world well enough to teach young Americans to speak the languages of countries in which we were so heavily engaged. We're almost back there again. We have seen extraordinary growth in the availability of Middle Eastern studies, of studies of the Arab languages, of some of the other languages in the region, but frankly the American academy is once again not rising to the occasion. The globe is where we live. The international context of everything that we do is the fundamental reality. In this University and in others there is a serious commitment to maintaining the global impact that we've had in the last 10 or 20 years.

So, we have an obligation to renew the curriculum with an eye toward the international character of our existence. We will be expanding the number of study abroad programs in the course of the next several months. Mr. Quandt has in place five summer programs with additional new offerings in the fall. There is an exciting collaboration with New York University in London in a phenomenal NYU facility. Students will be studying French at Rabat in Morocco this summer. This represents a move into a part of Francophone Africa that has been obviously very much in the news in recent times and that ought to be of interest to anybody who cares about our interactions with other parts of the world. And our programs in China, I am told, have simply been oversubscribed, which I think is the best possible news.

As we are committed to international outreach, we are committed to a more local kind. Over the years we have become a place that is broadly representative the rich diversity of American society. I think all of us understand at this point that we have to be committed to a student body, to a faculty, to a work force, to a community, in which a broad background of experiences, family background, religious, political beliefs, and so on is critical to the advancement of knowledge. I think it's necessary only to look around our classrooms or look at our alumni to understand the pay off that has been sustained over time by the commitments that President Hereford and others made in the late '60s and early '70s to build a strong, vibrant population of African American students here. That's just the beginning. The growth of diversity even considered in terms of race within the institution is an ongoing and I think inevitable thing, but at the same time it involves various kinds of obligations. One very frankly is the obligation to sustain public education, to be involved with K-12 education. Dean Brenneman, his faculty, the Mellon Foundation are well advanced at this point in building new links to K-12 education. That is where we find the vast bulk of a diverse pool of talent individuals who enrich our student body and our faculty. Developing that pool really has to be the first objective as we think about what we do to support K-12 education.

Many of you have been involved in planning that has to do with the advancement of science within the University. We see evidence that planning has paid off in progress we have made: the progress toward the new nanoscale technology building in the School of Engineering, phenomenal progress in the School of Medicine, especially in the basic sciences during Dean Carey's term. Planning for the sciences involves every one of the schools and that I think is great and good news with regard to the academic future. In each case, the strategy has been to capitalize on existing strength and to look for new opportunities and no school has been passed by: for instance, Architecture with its sustainable building project, the School of Nursing with its extraordinary outreach programs and research program into all aspects of medicine. You could go through a list of all of the schools and point to advances that cut across the disciplines and that speak very clearly to the determination to exercise positive influence on the world around us.

The problem as we come out of this period of state constraint is going to be to build vigorously, to do so determinedly strong and viable programs that will achieve world-class excellence in the future. Within five years we will have made significant progress on building out the planned arts grounds, on enhancing the academic programs and the other programs that the arts community supports here at the University. That progress will parallel the progress in the sciences. The first major building as you know is part of the General Obligation bond package that goes to the voters in the fall. The planning for the physical development is extraordinary and thoughtful. It's also sometimes vexed at the controversy about the proposed Emmet Street garage pretty well underscores. We are trying with regard to the arts project to build on a human scale, to create structures that meet academic needs without dominating those who live and move among them. We are looking with a purpose to constructing buildings that meet fundamental academic purposes of the University. The new projects that are coming, MR-6, Material Science Engineering and Nanotechnology building, the South Lawn project, the proposed new arena, the studio art building, and a number of renovation projects such as Cocke Hall and Fayerweather Hall, are all being planned with an eye to that set of values.

We also build for students. I mentioned the human scale. It's important to understand that a good bit of the human scale is 19 or 20-year-olds and that the institution has got to be accessible, open, welcoming, and protective of the young people who live in it.

I don't pretend in this kind of address to cover every single development. You will find in the printed materials reference to the work being done in Health Sciences to improve the quality of public health and to improve the quality of specialized care. Those things are critical. But I want to focus on one thing that has to do directly with students. We've met here before to talk about student issues. The National Institutes of Health has just published a set of studies that show the following statistical results of youthful experiments with alcohol: each year 1,400 college students between the ages of 18 and 24 die. We've had our share of that in this community. Five hundred thousand are injured; we've had that in this community. More than 600,000 are assaulted and 70,000 are identified as victims of sexual assaults or date rapes in alcohol-related incidents. We own parts of this problem. We're working through the Center for Alcohol and Substance Education to offer peer education. We adapt programs, Student-Athlete Mentors programs, and so on, and prevention. The Choices program, the TIPS program, to address the problem as it exists here in the University.

Beginning in 1998, we got into what I thought at the time was a very improbable experiment and that is a project called the Social Norms Projects that's sponsored by the Student Health and the Anheuser-Busch Foundation. The data from that project, believe it or not, are extraordinarily positive. Counterintuitive though it may be, the things works. Our numbers fall well below the national trends on all of the indicators that I just talked about, as they did not five years ago. All the same, it's important to understand the data that come out of that program. In 2001, the survey showed that our average student consumed 6.6 drinks in the average week. In 2002, 3.6 drinks in the same average week. Is that a trend line? No. But it is a one-year trend that I think tells us that we can do something about it.

Let me emphasize also that I do not see this any more as an issue only for the professionals who work with our students on these issues. It's your issues and it's my issue. Whether you work in Buildings and Grounds or serve in the hospital or teach courses or work in the library, you are, as I am, a teacher. Our obligation is to prepare young people for life, not for injury or death. So take this as your own personal initiative and do as others do to become more protective and frankly more intrusive from time to time in the lives of your students.

There is a great deal going on with regard to curriculum review. This has been in a sense the silent year for that, but the deans and the vice presidents, particularly Mr. Block, are actively at work on looking at what happens in the undergraduate curriculum. We're also looking to the customary academic issues, at matters having to do with credentialing or the nature of academic credentialing. We're looking at the way the student body has changed with regard to ethnic and gender representation and the need for additional technological skills that did not enter into the undergraduate and also post-graduate curriculum years ago. We're trying to deal with the fact that the best teaching that we do has to do with future learning, with] preparing students to learn on their own. Perhaps the most interesting curricular means of teaching students intellectual self-sufficiency is, in my own view, the way in which all of our schools have begun to focus on research projects undertaken by students and faculty together as core benefits or values within the University.

In the next capital campaign, which we will crank up in about two years, perhaps sooner, we will be looking at funding to support that kind of activity on a larger scale. Financial aid remains a challenge, especially with regard to graduate students. We feel as though by and large we've kept pace with the need for undergraduate students but there's a difference in character between undergraduate and graduate financial aid. I'm speaking here now primarily of those in traditional masters and doctoral level graduate programs. There's going to have to be a lot of collaborative effort to fund students according to complex and varied need. This is not one where the state is bringing a lot of dollars to us and saying, "Spend these." It's going to take work by the deans, access to discretionary accounts, access to central accounts, and fund raising. We have made some progress. It was reported yesterday at the Faculty Senate meeting that we have a long way to go.

I wanted to take a few minutes to talk about a couple of particularly vexing issues that are out there, because I don't want to walk away from things that matter to a lot of us. I mentioned earlier that there is concern about the parking garage proposal for Emmet Street. My sense of it is that the Board is solidly committed to the project and that the issues at this point really are planning issues. I should say also that I have a kind of divided personal interest here because on two occasions I've lived in the Lewis Mountain neighborhood where the bulk of the concern is actually located. I think we did a good job of diverting traffic with the parking garage behind Newcomb Hall. One issue is can we do something similarly good with regard to this one. There are ways to address some of the issues involving access for vehicles. Mr. Sandridge is starting an analysis of whether it's possible to go beneath the train track, for example, and tap that into the proposed north access road that is to come in from the new bypass. There may be better ways to engineer the access. We saw that with the Newcomb Hall garage. But I guess I have to tell you that I think that we face here a fundamental dilemma. We do not want the parking to go on the streets. We do want the arts projects. We do want the expansion in athletics. The parking garage happens to be essential to both projects and we face further the fact that we have chosen over time to allow an extraordinary number of our students to bring cars to Charlottesville. All of those issues probably deserve to be addressed in the course of this conversation. Like you, I guess I confront them with a sense of something like divided loyalty. I don't like it that we have to make choices of this kind. I don't know a better set of choices to make.

I have a general concern about traffic congestion that I know you share. One of the reasons for looking for a way to empty out the Emmet Street garage to the bypass is to try to address some of the congestion that now exists, but there are other issues also. The Cavalier Daily as you may recall has begun to address the issue of whether there are simply too many cars and I respect them for raising the issue. That's a complicated issue. I think our Board and others are going to have to look at that kind of issue as we figure out how to deal with a related one. For in addition to missing its revenue projections, the state missed its student population projections and they're talking once again about the University's need to absorb 38,000 students during this period of budget constraint. How much comes to us is up for grabs, but I would guess that the rate of growth that we've seen in the last decade, the 100 or so a year at least and maybe more, may increase. Sad to say, the state is not helping us by not having planned well for the education of its children.

I've also heard your concern about the evidence once again of hostility between some young people in town, and some of our students. The highly publicized attacks on students that occurred in the course of the winter months are not normative behavior. I think by and large this community has been wonderfully tolerant and supportive of the University, but I do think that sleeping with an elephant is an exercise in periodic danger and that we are by and large the largest entity in the region. We have tremendous impact on how people live and where they live and so on. I like the educational approaches that have been proposed and to some extent undertaken and I should say also that I admire the way the public school officials and the Commonwealth's Attorney have dealt with the issues. I don't see this as the city's problem or something about which we should in a kind of self-righteous way complain. It's our problem. It's our community. It's not the University versus the community. It's the University in the community and I think those issues really ought to be addressed in that context.

All of these things I think have to do with the importance of human endeavor in this venture. I began by acknowledging the importance of your advice. I want to conclude by acknowledging the importance of your tangible contributions. You do different kinds of work. We live different kind of lives to some extent, but we do so within the framework of commitments that are doable, that matter. The interaction that we have over time is, I think, one of the most extraordinary kinds of community interactions I've ever seen. My sense of it is that whatever the challenges that we face are serious, one way to address them is to understand how we affect other people.

I don't usually go into detail about the arrangements for classified employees in addresses that historically faculty addresses. But if you are a faculty member, concern about your classified colleague needs to become a central issue. If you are a University employee and pondering this issue involving the wages paid by our contractors, that issue also deserves the same kind of sympathetic and thoughtful address. Those issues don't go away. They're the defining issues in the community. It's critical to get the legal aspects, the regulatory aspects right, but frankly I think it is very hard to make a proposition against paying people what they fairly worth in the marketplace and I don't think anybody in the University wants to do that.

The state's economy at this time in a sense forces us to look more at economic issues than we usually do in this part of our year. I won't apologize for that because those of you who were here in 1990 and '92, know that that's how we survived--we focused on the numbers and you in turn focused on the things that you do extremely well. I don't deny the frustration that goes with doing business in constrained circumstances. One of the reasons I've tried to tell you truthfully what I think is coming with regard to the effect of smaller numbers of faculty positions, smaller number of TA positions and so on, is that I think that's part of what we do to prepare ourselves to do well. The fundamental and I guess the abiding thing that I would like to pass on to you is something like this. For me, these 12 years serving as your president have been a privilege and frankly a period of hard work, work that I value, a pleasure, but also something else. The experience of doing what I do reminds me frequently of a dream I used to have repeatedly in which I was walking through a building where every room ended with the opening of another room and no matter what you found or discovered or experienced wherever you were there was always something larger and better and more extraordinary and of greater excellence awaiting you in the next room. That I think is the experience of living and working within a great University. We talk, as we should about the fundamentals, the convictions about human freedom, the commitment to students. Those are the fundamentals, but if you live and work here and you choose to get older here as I have, one of the realities about that is you do it because it does something else for you and something that doesn't have to do with Mr. Jefferson and it probably doesn't have to do with the shape of your yard or with how you spend your summers or with even what your research project is. Instead I think it has to do with this reality that the humanistic aspects of the endeavor, no matter what the discipline, the opening up of those additional rooms is the most exciting and the most thrilling thing that I can imagine in human life.

I hope you share that excitement with me and I invite you to keep that in mind as we move through tough times. We're going to move up some more. We haven't finished, but we're going to work hard to get there and in the end we're going to celebrate the accomplishments of individual people who've done it. And those people are the women and the men who run the institution, the classified employees, the health care providers in the hospital and the faculty members, the researchers, the librarians, the people in student affairs, those who put tickets on our cars and those who cut the grass, all have a role to play, but in the end, the human value, the thing that we're talking about is its fundamental moral justification, it is to free people. That's our job. Thank you.