President Barack Obama may have more than a trillion dollars at his disposal to resuscitate the economy, but officials do not expect to see much effect on campus.
Although some Americans are hopeful about Obama's recent transition to power and his economic stimulus plan, it is unlikely the increased spending will help Duke much, if at all.
"Hopefully, if it jump-starts the economy, we all benefit from that. But I don't foresee, for example, any University projects being funded by it," Executive Vice President Tallman Trask said. "In some ways it could actually be unhelpful if, in fact, there is a lot of construction and the price of building things goes up, it could actually hurt us a bit."
Although some have suggested that now is a good time for new capital projects, Trask said construction costs have not fallen as some analysts predicted.
A rise in construction costs could postpone the New Campus plans again, and the economic bust has slashed short-term plans for Duke's 200-acre middle campus, he added.
"We're not going to be able to do everything that was in the last picture all at once, but what parts of it might go are still under discussion," Trask said. "It's not off the table, but it's certainly going to be in part delayed and in part reduced."
Still, the University possibly stands to benefit, even if indirectly, from stimulus plans.
"The devil is in the details," Professor of Economics Lori Leachman wrote in an e-mail. "If the money is spent on bridges to nowhere, it will be a waste. If they go to projects which have real value added then it will be a boost both now and later."
But she added that attempts to please Republicans by including tax cuts have not impressed her.
The University-and the School of Medicine in particular-is very dependent on government grants and contracts, which may be affected by the federal fiscal stimulus, Trask said.
"We're all hopeful that resources available to the National Institutes of Health and similar organizations will go up. If that happens, that's certainly good for Duke," he said. "Everyone sort of thinks that will be the case, but part of the problem is there are so many ideas that people think will be great to do and only so much money to do them."
In 2008, 28 percent of the University's operating revenues came from government grants and contracts, the largest source that year. Government funding to Duke in contracts and grants has increased 30 percent over the last five years, according Duke's Financial Statements: 2007/2008 report.
If the fiscal stimulus worked as planned, Duke's endowment could attempt a recovery from its 20 percent loss from July to December, Trask said.
"All this ought to lead to more credit, which would lead to more activity, which would lead to increases in values of things we hold," he noted.
The recession may leave some in doubt over the future viability of financial aid. Duke's $300 million Financial Aid Initiative began in 2005, however-several years before the current economic recession.
"We have a commitment to meet all need regardless of the source, so if there is more need, we'll just have to figure out how to pay for it," Trask said.
Leachman noted that "in theory" the stimulus package would provide "more money for education and more money for student loans."
Despite the hope surrounding Obama's presidency, the country's economic future is still hazy, Trask said.
"I think we're in uncharted waters," he said. "We all had views and theories about how the world works, and at least in the last six months, those views have been inoperable."
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