Good afternoon. I am grateful for the opportunity to speak with you today about the state of Auburn University. I stand before you fully aware and absolutely supportive of the critical role the general faculty plays in the life of the university. In preparing these remarks I have reflected very carefully on the many lessons I have learned during the 35 plus years I have served at two universities as a full time faculty member and as an academic administrator.

My purpose here today is to review with you some of the main issues facing our university; where we are with respect to these issues; what we are doing to resolve them; and the role of the faculty in this process. The main issues I have in mind are budgets and proration, institutional governance, and the quality which all of us have worked so hard to achieve and which we must do our best to sustain.

With respect to budgets and proration, the political landscape of education in the State of Alabama has changed in some dramatic and possibly irreversible ways over the past four weeks. I believe it is important for everyone to understand what has happened. Therefore, I will do my best to summarize the main developments.

As you probably know, Alabama law prohibits deficit spending and requires across- the-board reductions in spending when income from taxes falls below the levels reflected in legislative appropriations. A drop in receipts from sales taxes and corporate income taxes prompted Governor Siegelman in early February to order a 6.2 percent cut in education appropriations for the current fiscal year. This level of proration represents almost $13 million for Auburn University.

It is a tribute to everyone associated with Auburn that we are probably in a better financial position to absorb such a reduction than any other institution in the state. Through the efforts of many at Auburn, but notably Dr. Don Large, we have been able to build a modest proration reserve of about $8 million for just such an event as this.

However, following the declaration of proration, the Alabama Association of School Boards filed suit to exclude from proration those portions of K-12 budgets that fund teachers' salaries and benefits, textbooks and school supplies, and transportation. The result would be to change the level of proration to higher education to approximately 18.6 percent, amounting to about $35 million for Auburn. On February 15, Judge Tracy McCooey ruled that the governor could not constitutionally make those cuts in K-12 budgets, but stipulated that her ruling would not take effect until February 27. The delay gave the Legislature a chance to address the situation in a special session convened by Governor Siegelman.

In the meantime, we proceeded to file an appeal with the State Supreme Court seeking a stay of Judge McCooey's order. The stay was granted.

At the start of the special session, the governor introduced a package of bills, the effect of which would have been to increase proration for higher education, while decreasing proration for K-12. One of the bills in the package, House Bill 2, would also have provided the governor with extensive authority to apply proration selectively. House Bill 2, which the governor and the Alabama Education Association fought very hard for, would have set in motion a continuing reduction of funding for higher education in the years to come. In fact, I am deeply concerned that the current strategy of the AEA leadership will lead to further serious reductions in state support for higher education in the years ahead.

Passage of House Bill 2 was blocked by the combined efforts of the four-year universities, and by the courageous stand of several members of the Senate who took a position in support of higher education and in opposition to the governor and the AEA. The presidents of the four-year institutions met with the governor several times, and on each occasion we stated our strong support for equal treatment of all education budgets, and our view that university salaries should be protected to the same degree as K-12 salaries. On each occasion, the governor rejected our position, offering instead only one-time money, in the form of a bond issue, to cover our salaries and operations for the remainder of the current fiscal year. I could not support this option. I do not see that I will ever be able to support it because using one-time money for continuing funds simply contributes to the further erosion of our fiscal situation. It is irresponsible and certainly is not in Auburn University's best interest.

Faced with failure in the special legislative session and the stay issued by the Supreme Court, the governor called on the attorney general for an opinion concerning local school funding. The attorney general responded with what charitably could be described as an arcane opinion the arguments for which did not appear to be supported by the facts. The attorney general's opinion declared no salaries in K-12 could be cut, and the governor relied on this opinion to justify placing the majority of proration on the back of higher education. We filed a second petition with the Supreme Court last week (Monday) arguing that the governor was relying on a flawed attorney general's opinion to circumvent the intent of the earlier stay issued by the court. If the view advanced in the attorney general's opinion prevails in the courts, we will face 11.69 percent proration of our current year budget ($25 million). If our opinion prevails, proration for all of education will remain at 6.2 percent.

So far the Supreme Court has not issued an opinion. Therefore, the level of proration we will face for this year's budget, 6.2 percent or 11.69 percent, is unclear. I wish to emphasize that, at either level, we will do all we possibly can to manage reductions for the current year with minimum disruption to Auburn students and programs. Barring unforeseen developments, we will complete the current semester and we will have summer school.

The most difficult decisions will arise in relation to next year's budget, which will in all likelihood be reduced proportionately to the reduction of our current budget. Final decisions concerning reductions in next year's budgets will depend on action by the Legislature and governor during the next eight weeks or so. We therefore face multiple challenges on the budgetary front, related to the level of this year's proration, the level of next year's budget reduction, and the effects of both these cuts on our university's people and programs.

I hope everyone within the sound of my voice appreciates the very real and very deep concerns of not only faculty and administration, but also students and parents regarding the budget issues we face. I have received numerous letters from students and parents concerning the level of tuition increases they should expect. Obviously, I do not have any specifics at this time because we don't know the exact amount our budgets will be cut, but I can say that it is my intention to develop strategies for addressing this situation that will not place the burden entirely on our students and parents.

Our responses to these financial challenges have internal as well as external dimensions. Within the university, I have asked the senate leadership to work with the office of the provost to develop a process of recommending budget reductions that involves the input of all the affected groups, especially the faculty. The objective will be to incorporate this input into decision-making at both the local unit level and in the central administration.

I have also set up a small ad hoc committee to work with our university relations staff. I have charged this group with developing strategies to limit the damage done to higher education, and indeed to all of education, during the next few years. Our initial phase of activity relates to the coming weeks of the legislative session. We will be joining with other leaders of higher education in this state to reach out to the public, and to legislators, in support of uniform funding treatment for all of education.

Perhaps the saddest and sorriest aspect of the past month concerning our funding crisis has been the cynical pitting of higher education against K-12. Such a tactic defies all logic. It should be repugnant to every person who is involved in the pursuit of knowledge as well as to the rest of the electorate who expect the State of Alabama to compete in the 21st century.

The principles for which we shall be working are simply expressed: first, treating all portions of public education the same in terms of state support, and second, treating all portions of public education better in terms of state support.

Even though budgetary issues have occupied almost all my attention in recent weeks, I want you to know that I continue to take very seriously the issues of university governance that have surfaced in this same period of time. I understand that resolutions concerning some of those issues are on this afternoon's agenda, and that other groups within the university have already voiced strong concerns and offered commentary.

It appears to me that you and your elected faculty representatives have already made positive and constructive contributions in this regard. My reading of some of the recent resolutions, and of the senate leadership's communications to the Board of Trustees, is that they offer constructive and promising strategies for addressing issues of governance. I have already encouraged the Board, through its president pro tem, to examine these ideas with a view toward proceeding with their implementation.

I am grateful for the constructive suggestions that have already been brought forward, and I hope that you will continue to employ your collective knowledge in crafting solutions to issues of governance. I will do my best to support you in this effort. Individually, the faculty represent academic disciplines that together offer important points of entry into the issues at hand. Among the concepts that frame these disciplines are the concepts of healing, organizing, building, cultivation, analysis, and design. The knowledge you collectively possess makes you one of the greatest resources available to this institution as we address issues of governance, and issues of fiscal management as well. I ask for your continued engagement and support in the weeks and months to come.

In more ordinary times, I would have devoted many of these remarks to evidence of the quality of the academic programs you have built, and the outstanding recognition that you, and our students and alumni, have all earned. Perhaps our acceptance into Phi Beta Kappa best expresses the standing that Auburn has achieved in higher education. In facing the challenges at hand, we will do well to keep in mind the singular quality and character of this institution, and the profound impact it has on those who come here.

I thank you for your dedication to this institution, and I'll be happy to respond to any questions you have.