President Ramsey Testifies to State Legislators

Appropriations and Revenue Committee Testimony Subcommittee on Education

Feb. 18, 2010

• Let me begin by thanking you, the members of the General Assembly, for your continued support of education/higher education in the most difficult of budget times. You understand the vital relationship between education/jobs, jobs/education, and we appreciate your efforts.
• I would also like to say as a former state Budget Director who worked on four annual budgets, I understand the difficult challenge you face.
• The reality is, however, that the times we have and continue to face are unprecedented.
• As I learned as Budget Director, there is never enough money to meet all the state’s needs.
• Unfortunately, our problems now are worse than ever, as we face the worst national economic downturn since the Great Depression.
• Kentucky has lost over 100,000 jobs in the last two years.
• We know the challenge you face, and know that you will do the best that you can.
• I also understand that you’ve already heard from seven presidents, so what more can I say.
• I would like to make a couple of quick points, and then answer any questions that you might have.
• First, the Postsecondary Education Reform Act of 1997 has been transformational at the University of Louisville.
• It’s the most important public policy initiative in the history of the University of Louisville.
• For you remember that we were a private school until 1970, coming into the state system at that time.
• Candidly, when we came into the state system, we were another mouth to feed – an expensive mouth, with a Medical School, Dental School, Law School, and Engineering School – all programs located at the University of Kentucky.
• In 1997, you, the General Assembly of the Commonwealth of Kentucky, gave all of higher education a mandate – a public agenda to increase economic opportunity and the quality of life for the people of Kentucky.
• Our specific mandate at the University of Louisville was to a “premier nationally recognized metropolitan research university,” a mandate very different from that given to the University of Kentucky, to be a “top-twenty public research institution.”
• There are, of course, times that we compete with the University of Kentucky – in athletics and recruiting the very best students – but we are proud of our partnership with the University of Kentucky as the state’s two research universities.
• The Higher Ed reform legislation understood that great research universities make for vibrant, healthy economies and quality of life.
• Point one despite the difficult economic times – the unprecedented challenges you face – we must all keep higher education reform alive.
• While you may be unable to fund the initiatives we need to move forward, don’t let the reform efforts die.
• Let us know that you continue to support the important work that we are doing.
• Two, we have made progress.
  • We are producing more graduates today than at the beginning of the reform.
• 1998 – 1,734
• 2009 – 2,428
• 40% increase - 694
• Our six-year graduation rates have increased by 15.4% since 1998
• 48.4% in 2009
• 33.0% in 1998
• 15.4% increase from 1998-2009
• We are attracting the very best students – an important public policy initiative, for we know that if the very best students in Kentucky feel that they have to leave Kentucky to get a quality education, the likelihood they will ever come back and be part of our community and workforce is greatly diminished.
• Students from around the state are succeeding and we are foremost proud of Miss Monica Marks from Rush, Kentucky, and the Boyd County/Carter County border – one of 32 students selected to the prestigious Rhodes Scholarship this year.
• Our research funding is up 233% a $98 million increase, and as I’m sure Lee would echo, our research is economic development.
• 1998 - $42 million
• 2009 - $140 million
• The money we bring into the state transfers directly into jobs and economic activity, but more than that, our research is making a difference in the lives of people.
• Our research is translational research – from bench to bedside.

Cancer is a major problem in our state.

• Our research is resulting in the very best in cancer care.
• The faculty at the University of Louisville discovered the first FDA-approved cancer vaccine – Gardasil – which protects against the virus which causes cervical cancer.

• At the University of Louisville we have the first and only accredited breast-care program in the state.
• We can turn buses around.
• With me today: Dr. John Trent, one UofL’s leading cancer researchers.
• Through the power of the Dataseam program —Dr. Trent and his team are discovering new cancer treatments and therapies.
• UofL researchers are harnessing the power of Dataseam computer grid –the network of computers in elementary and secondary classrooms in coal counties.
• Dr. Trent and the Dataseam network has:
• 3 drugs licensed to ACT for clinical development
• Over 20 confirmed discoveries because of the program
• accelerated the search for effective cancer treatments
• Dr. Trent has one patient who has gone from end stage kidney cancer to disease free after five years
• Saved millions in state dollars by literally speeding up drug discovery from concept to biotech licensing from 20 years to 18 months
• Heart disease is the number one killer nationally and in Kentucky. We have a strong heart program – a leader in research and assist devices and adult stem cell regeneration.
• Mike Jones, a native of Madisonville, Kentucky now living in Spencer County, was the first recipient of his own heart stem cells to regenerate his diseased heart.
• Mike is part of a clinical trial which is taking place at the University of Louisville.

Business and Community….

• UPS is today our largest employer, and our research work in the Institute of Logistics and Distribution Management is critical to UPS.
  
• Both UofL and UK are leaders in energy research, with our focus at the University of Louisville in the areas of sustainability, renewable energy, with specific focus on the lithium battery.
• Finally, we know that the Higher Ed reform was about making our communities better so that we have a better state. Needless to say, we were honored to receive the Number 12 ranking among all universities for providing support and service to our community.

Third, as you know, we’ve faced 9 budget cuts in 9 years.

• We understand the prospects going forward.
• We have made progress by being good stewards – yes, tuition has gone up, but as Bob King has explained to you, we are still affordable.
• Far too much emphasis is placed upon the sticker price, and not the actual cost of college attendance.
• With us today is Jonathan Hughes, from Nelson County, one of our students, one of our customers, a recipient of the Cardinal Covenant, which provides totally free education for our students whose family income is below 150%.
  • Also with me is
    • Bryan Wessel – Kenton County native
    • Rachel Noble – Madison County native
• We’ve done so much more than increase tuition. We at the University of Louisville developed a 7-pronged strategy for moving forward in a tough fiscal environment.

This strategy has been:

• Managing costs
• Over the last 7 years, we have implemented program efficiencies which have saved us, either on a one-time or recurring basis, $135 million.
  
• We’ve been working hard to take under-performing and non-performing assets and make them fully performing.
• One old, dilapidated building on campus that was a cost center has been renovated by a private developer and is now being leased as loft condominiums.
• What was a cost has resulted in a million dollar payment to the University.
• We are developing the Shelby Campus, and looking at everything we do – not just on the expenditure side of our budget, but on our balance sheet.
  
• We are building clinical income.
• The University of Louisville has the major responsibility for providing indigent care, not just in our community, but in our state.
• We receive literally hundreds of patients every day from across Kentucky – patients who don’t have insurance or any means to provide for their clinical care.
• We will never walk away from that responsibility, which today is about 30% of the patients at the University of Louisville Hospital during these tough economic times.
• At the same time, we know that we can build our clinical activities among our 460 faculty physicians and at the University of Louisville Hospital – clinical income.
• We like to say that at our Health Sciences campus there are three legs to the stool – education, research and clinical activities.
• Our education and research activities are, by and large, while not non-revenue, don’t cover their costs, and growing our clinical enterprises been a big part of continuing to move forward.
  
• Our fourth strategy is to increase fundraising.
• We’ve increased our fundraising in the last three years. We have nearly doubled our giving.
• When I started, it was said that the University of Louisville, through its alumni/donor network could raise about $1million a week.
• We’ve ramped up to where last year we raised $96 million, with $77 million in support of our academic mission.
  
• Our fifth strategy is private partnerships, to work with private sector to do things that we cannot do ourselves, such as our food service program.
• This program was supported by our Student Government representatives and now affords students the opportunity to eat meals on campus and provide an enhanced student experience.
• Our sixth strategy is to do more contract research – our total income from contract research, patent royalties, etc. is up 2,551%.
• Research/License, royalties, associated, reimbursed income- (from Bob Goldstein)
• total $ since 1997: $10,952,356
• 2001: $79,101
• 2009: $2,096,663
• 2,551% increase from 2001-2009
• Finally, we are trying to be creative, and see a day in the not-too-distant future where the Tax Increment Financing district that you authorized several years ago will allow us a revenue stream to continue to move forward.

Economic Driver

• Since 2003, UofL has either directly or indirectly created 9,764 new jobs.
• This is 40% of the employment growth in Kentucky during that time.
• We have added $1.2 billion to GSP. Our return on every dollar of state investment is $4.17 (source: Manoj Shanker)

• We will continue to do all that we can to move forward, but we’ve now gone two years with no pay increase.
• Several years ago, we were able to add 20 researchers a years to grow our research program.
• We are no longer able to do that and, in fact, without salary increases, we are working hard to retain our very best researchers.
• We have not been about to add new faculty to grow our enrollment.
• We don’t have the space to grow our enrollment.

Let me conclude by saying:

• We totally support the budget recommendation of the Council on Postsecondary Education.
• While no one has asked, we prefer operating funds to a new building, even though we are one of either two or three campuses that has been found to have a classroom space deficiency at this time.

Again, we appreciate your past support. We know that you will do the best you can. Unfortunately, at a time when we need to leap frog, and jump ahead of other states, we find ourselves doing everything we can to maintain the
status quo.

As always, I stand here ready to help you. If the university can provide assistance or knowledge experts please let me know.

Thank you.