Research revenue critical to University as state funding declines

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Editor’s Note: This story is part of an ongoing series to explore the impact of UT’s research on the University and the state.

Research funding brings twice as much revenue to UT as state appropriations, and officials said maintaining high standards for research is necessary to avoid greater budget challenges in the face of state cuts.

The state allocated $318 million for the academic year 2010-11, while research brought in $642 million in mostly federal and out-of-state grants, said Vice President for Research Juan Sanchez. He said research funding is used to pay salaries, maintain facilities and buy equipment and supplies.

“In fact, we bring in more federal research funding than Berkeley [University],” he said.

Research revenue is used to pay the salaries of graduate students and faculty who contribute to the local and regional economy by paying taxes and spending money, Sanchez said, adding that research is entirely financially self-sustaining.

“Fundamentally, it allows us to sustain an intellectual environment that will be attractive to high quality faculty and students,” he said.

The only way the University can compete for more federal grant funding is by retaining top talent faculty and students, Sanchez said. Students and faculty choose UT because it offers excellent opportunities for research and discovering new things, he said.

President William Powers Jr. said in an email Wednesday that the $92 million in cuts means state appropriations will fund 13.3 percent of UT’s budget in the next biennium, compared to 14 percent in 2010-2011. This will require the University to change the way it uses its money, he said. UT has been preparing for the cuts in recent months and years, he added. He told The Daily Texan last week that quality research will remain a high priority for the University.

“We are collaborating with other universities across the nation to define the public research university of the future,” Powers said in the email. “But some things never change, such as our commitment to education and to nurturing the people and the research that changes the world.”

Richard Vedder, economist at Ohio University and a researcher at the The Center for College Affordability and Productivity, said “excessive” academic research should be eliminated. In an interview with The Daily Texan last month, he said some type of research in liberal arts has an anti-intellectual quality.

President William Powers Jr. said in an interview last week with The Daily Texan that deans and department chairs are getting questions from potential faculty about the future of research at the University. The controversy surrounding the subject is raising skepticism among donors and alumni as well.

“Anyone that talks about reducing research at the University has to understand that it will have a drastic impact on regional and statewide economy,” said Bruce Kellison, an associate director of the research arm IC^2, a University think tank.

If UT wasn’t doing the type of research it does, the funding it receives would go to other schools such as Berkeley, University of Wisconsin, University of California at Los Angeles and University of Illinois, Kellison said. That would hurt the Texas economy, he added.

“Because we are tier one, we are attracting people from all over the country and the world,” he said.

UT’s operating budget is $2.2 billion, but its economic footprint on Texas’ economy is $5.8 billion, Kellison said.

Students attending the University from other states and countries contribute to the state’s economy through direct and indirect spending, he said, and the University’s presence stimulates job growth both on and off campus.

“50,000 [students] buying cokes, pizzas and groceries — that is a lot of extra employment local businesses are able to generate from direct spending,” Kellison said.

Besides generating revenue through research, UT creates an environment that enables students to compete in an ever-changing world, said Texas economist Ray Perryman, who runs the Perryman Group, an economic analysis firm in Waco.

“It produces generation after generation of extraordinary people who will go on to make great contributions to the state, whether it is in sciences or politics,” Perryman said.

Updated on 07/18/2011 at 1:18 p.m.: Richard Vedder's attribution