Chancellor Thomas C. Meredith FY06 Budget Presentation - Joint Appropriations Committee
January 19, 2005
- Remarks -
Thank you. Senator Hill -- it's a pleasure to be working with your again. Representative Harbin, let me extend my welcome to you in your new position and responsibility.
It is really good to be here today -- standing, walking, and talking. I have appreciated the expressions of concern and support I have received from so many people in state government since Susan and I were in our accident. We are well on the road to recovery and your concern helps speed that along.
This marks my fourth time to present the Governor's recommendations on the University System of Georgia budget to the joint appropriations committee, and I'm honored to do so. I want to take a moment to thank you as a body for the counsel, support, and friendship you have extended to me over the past three years. I appreciate it.
Let me say at the outset that I look forward to working with you in the coming weeks. We too, are excited about the new opportunities facing us as we work together to help Georgia grow through public higher education. We have a great partnership.
You'll notice throughout this presentation our tagline: "Creating A More Educated Georgia." That's what we are about in the University System of Georgia.
There are a number of regents and presidents with us today and I just want
to take a moment for them to be recognized. These are some of the hardest-working
folks you'll find. They -- like you -- are dedicated
to the cause of higher education in this state. Let me recognize our Chairman
of the Board of Regents, Joe Wooten of Columbus, along with Regents Hugh Carter
of Atlanta, Mansfield Jennings of Hawkinsville, Jim Jolly of Dalton, Pat Pittard
of Lakemont and Dr. Bill Cleveland of Atlanta. I'd also like our presidents
who are here to please stand and be recognized.
Before I move to the core of my presentation, Mr. Chairman, I'd like to take a few minutes to lay the groundwork for Governor Perdue's recommendations on the University System of Georgia FY06 Budget.
Let's begin with who we are. The University System of Georgia is, when you really think about it -- your neighbor. We are part of the neighborhood in 34 communities where we have campuses. But our 34 colleges and universities have nine off campus centers and other operations that mean we are in communities throughout the state. In fact, our work touches each and every one of Georgia's 159 counties.
We have roots in these communities. Our faculty and staff live and work in your neighborhood. Their children attend local schools. These employees pay taxes, belong to the PTA, attend church and belong to the local civic club. We are neighbors that help the children in a community grow, learn, and gain knowledge and skills that prepare them for a productive life.
We are not only a part of the neighborhood, we help that neighborhood grow and prosper. Our presence is felt through: four research universities; two regional universities; 13 state universities; two state colleges; and 13 two-year colleges.
We are educating more than a quarter million students -- a record high that just keeps growing as more Georgians seek higher education than ever before. In fact, our enrollment has grown by 44,781 students since Fall 2000 – or almost 22 percent. And to educate those students, we have 38,000 faculty and staff. We help more than one million Georgians gain new knowledge through Continuing Education.
I believe Georgia has the finest system of public higher education in the country. Recognition of that fact comes in many ways. One is U.S. News & World Report's annual rankings survey. Georgia is only one of three states with two or more institutions among the top 20 public colleges and universities in the country: Georgia Tech at 10 and UGA at 19.
Human nature is curious. We want to know what our neighbors do. What we do in the University System is far-reaching. Basically, we have a three-fold mission of teaching, research and service. That is the simplest explanation, but it doesn't begin to cover the scope of our efforts to touch and improve the lives of Georgians.
We teach in classrooms and on the Internet. We give students the chance to learn about the world with study abroad programs. We operate and maintain the majority of the state's buildings -- including many historic structures. Ultimately, we are "Creating A More Educated Georgia" through our associate, bachelor, master, doctorate and professional degree programs. In Fiscal Year 2004, we conferred 42,146 degrees.
But we are more than just the classroom. We help students learn to cooperate and organize through play in sport. We fill stadiums and arenas with Georgians eager to celebrate athletic excellence. We provide cultural opportunities and experiences that bring the world's best art, artists, thinkers and writers to your neighborhood.
We also are about the business of research … research in medicine, research for business and industry. We find ways to help Georgians live healthier lives through advances in medicine and by providing the doctors, dentists and other healthcare professionals for hospitals and clinics throughout the state. In research, we bring in $861 million in research dollars annually to Georgia that then helps create jobs and industry. These are funds that generate jobs and help create start-up companies. These funds add to the productivity and profitability of Georgia's businesses, and strengthen Georgia's reputation as a great place to live, learn, and do business.
We help local businesses find solutions to grow and expand. Around 70 percent of new jobs in most states come from the expansion of existing businesses. We help farmers in the fields with new farming techniques. We help meet the growing demand for college-educated employees in key workforce areas, such as teachers, nurses and technology professionals. We provide library services in communities throughout the state. We are good neighbors.
Clearly, we pay back the communities we serve. Why does anyone take the time to invest in a community? Because of what the investment gives back in terms of safety, security, friendship, business opportunities and other benefits.
The same principle holds true for your neighbor, the University System of Georgia. For a per student investment of approximately $7,000 in state funds annually, or $28,000 for a person to earn a bachelor's degree, the lifetime earnings potential for that college-educated individual increases by $1 million. That's a small investment for such an increase in potential earnings.
I just mentioned a moment ago the return on investment our research dollars provide – $861 million last year. And the return on investment in the University System can be measured in pure economic impact. Dr. Jeff Humphreys of UGA's Terry College of Business Selig Center just released his latest update on the economic impact of the University System of Georgia. In Fiscal Year 2004, that economic impact totaled $9.7 billion and was responsible for more than 106,000 jobs, both on- and off-campus.
The bottom line on return on investment is quite simple. We have a budget of $4.8 billion. We ask you to provide a little more than one-third of that amount to fund the University System. We must find the rest. A three-to-one return is a good investment in anyone's book.
But in the most basic investment terms, a more educated Georgia is a safer Georgia, a healthier Georgia, a growing Georgia and a more prosperous Georgia. So viewed from this perspective, the University System is in perfect alignment with the State's Strategic Plan.
We are good neighbors. We cause the realization of the dreams and hopes of Georgians. We help individuals to identify and then realize their dreams by attending our institutions. We are truly about changing lives and in the process, changing communities for the better.
Thanks to higher education, people can live more productive lives and take on the responsibility to strengthen their neighborhoods. That's why the citizens of this state created the University System for their benefit and the benefit of their children.
As Governor Perdue has said, "I'm concerned about caring for the children of Georgia, protecting them and educating them from early childhood through our university system." We share the Governor's concern and are committed to his goal and his efforts to care for Georgia's children.
We work very hard to be good stewards of this great university system. Part of that stewardship is providing access to Georgians to higher education. One measure of that access is enrollment. As I mentioned, enrollment in the System has been increasing dramatically in recent years. But access must be for all Georgians. And in this regard, we continue to serve more minorities. Our African-American enrollment has risen to 58,757 students in fall 2004 -- to 23 percent of total enrollment. As you know, we are addressing the terrible loss of African-American males from education. In the University System, those numbers are now increasing due to our efforts through our African-American Male Initiative.
But as stewards and good neighbors, it's not enough to just provide access. We must offer, maintain and strengthen our academic quality. Let's look at quality from input, to "throughput" and finally, output. On input, we are getting great students in the University System. You can see that University System students are among the best in the nation when it comes to some of the most prestigious national scholarship awards.
And the average SAT score of our entering freshmen continues to rise. This
year the average was 1042 -
another record high. This is well above the national average. And our students
are showing up better prepared for college, as evidenced by the percentage
of entering freshmen who have complete the college preparatory curriculum we
require -- at 89 percent. Related to this, we continue to see a drop in the
number of first-time freshmen who require learning support courses -- currently
at 21.5 percent, primarily at our two-year colleges by design.
All of these are quality input indicators, which then contribute to a key
throughput -- the number of students we are able to retain, and ultimately
graduate with a degree. This is a true test of accountability,
and on both these measures, the University System is making significant gains.
Our retention of freshmen to the sophomore year is at an all time high of 80.9
percent System wide.
This leads to the ultimate goal -- output -- the ability of students to graduate with a degree. And our graduation rate has improved to 53.7 percent System wide and is still rising. Georgia is taking a national leadership role in focusing on graduation rates. Last January, I appointed a Graduation Rate Task Force and we are underway with some key recommendations. We will see that rate continue to climb in the University System. This is straightforward. You bring in better-prepared students and you will retain more of them in college and, ultimately, more will graduate. Over the next few years you will see a rapid rise in our graduation rates.
Another measure of quality can be gauged by our success in meeting the state's critical workforce needs. The Board of Regents Office of Economic Development has a very successful economic enhancement program in the Intellectual Capital Partnership Program-- or ICAPP initiative.
And through ICAPP, we have created a number of programs. One is the ICAPP Health Professionals Initiative. This is a public-private partnership that produced 632 additional licensed health professionals for the state and in the next round will add another 700. This effort is made possible by your funding support.
We support the Commission for a New Georgia's Strategic Industries. To support the workforce needs in some key strategic industries, the USG has created a Regulatory Affairs program through the University of Georgia's College of Pharmacy to educate professionals in regulatory processes. This is much needed here and across the country.
Through regional programs at Middle Georgia College, East Georgia College, and Georgia Southern University, we have been successful in reaching out to existing businesses to provide economic development expertise for small communities.
For example, through East Georgia College's Georgia Rural Economic Development Center ("GREDC"), hundreds of small businesses and entrepreneurs have received the benefit of the resources of the University System to ensure success.
Through the Georgia Tech's Economic Development Institute ("GA Tech EDI") and UGA's Small Business Development Centers ("SBDC"), we provide technical and business operations expertise to Georgia's existing industries throughout the state. Currently, there are 14 GA Tech's EDI offices and 21 SBDC offices that serve existing industries in areas that range from manufacturing to marketing.
Through the Georgia Tech Regional Engineering Program – GTREP – we are able to provide engineering instruction and programs to citizens and companies located in southeast Georgia. GTREP is part of a larger economic development effort in the Savannah region.
In teacher education, we have planned Phase Three of an effort to increase the numbers, the quality and the diversity of the teachers the University System prepares for Georgia's schools. Predictions are for some significant teacher shortages down the road and we must ensure Georgia has the teachers it needs for our children.
These are but a few of the many, many examples of ways in which your University System works with partners throughout the state to identify and then quickly respond to meet needs.
Let's look at some ways in which the System is working to be accountable. We have a number of programs and efforts underway to make us more efficient and effective in our operations. For example, in academics, one of the areas on which we are focusing is pass rates on professional exams. Another is determining if academic programs are still viable. Beginning in 2002 we have dropped 212 programs and added 97. In business operations and facilities we are collaborating on purchasing and have increased our emphasis on audits. We have hired our first System-level purchasing director to coordinate some purchasing for all 34 institutions and realize some savings. The salary for this position will be paid from the savings generated. And in information technology, many of our campuses are moving to Voice Over Internet Protocol. We also are in the process of consolidating many of our technology applications. We would be happy to sit down and talk with you about these and many other efforts.
Let me now move to the Governor's Recommendations, which can be found on pages 269-276 of the Budget Document. I'm going to jump around somewhat, as I want to highlight our priorities, beginning with full funding for enrollment growth, then the Governor's salary recommendations, the capital outlay, the Governor's recommended reductions and additions, and finally, the FY05 Amended Budget.
Let me begin with our number one priority -- which is the Governor's recommendation for full funding for enrollment growth and new space. This can be found on page 274, Line 33.The Governor's recommendation is for $103.4 million. We are deeply appreciative that the Governor has recommended our full request in this area. This is the most critical item in the budget that, with your support, will help us meet our growing student enrollment and maintain the quality we must have for our students. The amount reflects a 5.7 percent increase in enrollment and operating expenses related to our bringing on line 873,574 square feet of new space for instruction and student support and services.
Let me make a few comments on enrollment funding. This is very important to
our operations in that it: ensures predictability in our funding and planning
for our 34 institutions; enhances accessibility for Georgians
to public higher education; and promotes affordability in terms of our being
able to maintain Georgia's historic status as a low tuition state. Currently
among the 16-member Southern Regional Education Board (SREB) states, our four-year
institutions rank 15th in terms of tuition and our two-year colleges rank 13th
out of the 16. Finally, if I haven't made the point strongly enough -- these
dollars, the $103.4 million in the Governor's recommendation -- are the ‘bread
and butter" funds for our institutions. They go directly to serve those quarter
million students on our campuses today.
Now please turn to page 273, Line 2. We are appreciative of the Governor's recommendation regarding the two percent merit salary increase for faculty and staff that totals $17.7 million. People are the System's greatest and most powerful asset. We are people intensive; our people are our heart and soul. We must continue to do everything possible to retain our outstanding teaching faculty, researchers, student support employees and talented administrators. We have seen a great deal of pressure from other states seeking to recruit our good people. This recommendation helps keep Georgia competitive in its salary levels to attract and retain the best faculty and staff. Currently the University System ranks 4th among the 16 Southern Regional Education Board states in faculty salaries.
Let me turn to the Governor's recommendations on Capital Outlay. These can be found on page 276. As we look to the future and our needs for new facilities to serve our continuing enrollment growth, the Governor's recommendations in this area are very important.
Obviously, we are pleased to receive dollars for new buildings, but we are equally pleased to see dollars to help us maintain our existing structures. Of our more than 3,000 buildings across the state, 62 percent are 25 years and older and 23 percent are 50 years and older. Those of you with older homes know full well the importance of not falling behind on maintenance in order to avoid larger costs later. That's why the Governor's recommendation for MRR funds of $65 million, found on Line 1, is so important. The state of Georgia has entrusted to the University System and the Board of Regents responsibility for these buildings -- our state's treasures -- and we are committed to fulfilling that responsibility.
Line 2 provides funds for construction of the top four major projects on the Regents Major Capital Priority List:
- $10.1 million for the complete rehabilitation of two beautiful, historic
buildings at Georgia College & State University to accommodate the
University's Nursing and Health Sciences programs;
- $26.9 million for a new facility at the University of West Georgia
to replace the existing and antiquated Health and Physical Education facility;
- $20.5 million for a new facility for North Georgia College & State
University that integrates instructional and academic support into a new
facility that will provide enhanced distance learning capabilities for northwest
Georgians; and
- $12.6 million for a new academic classroom building at Savannah State University.
Line 3 provides equipment funding for three previously funded construction projects at Kennesaw State University, Georgia Perimeter College, and the University of Georgia.
Line 4 addresses the Georgia Public Library Service's top three priority projects and provides matching state funds to local communities. This will mean new facilities in the Henry County Library System in McDonough, the Piedmont Regional Library System in Barrow County and Auburn, and Coastal Plain Regional Library System in Tift County and Tifton.
Line 7 provides $5 million in funding for the new Advanced Clean Room Facility at Georgia Tech -- part of the Governor's nanotechnology efforts.
Like other state agencies, the University System has reductions to its budget in the Governor's recommendations, found on page 274. We understand that despite rising state revenues, dollars remain tight and we must continue to exercise fiscal prudence. As you also are aware, all state agencies were asked to prepare three separate budget requests -- one at 97 percent of the current base. These reductions in selected areas of our operations reflect the Governor's recommendations from our 97 percent request. Let me highlight just a few of these recommended reductions.
On Line 21 you will see reductions for a number of our Public Service Institutes totaling $314,990. These reductions range from 1.6 to 3 percent.
On Line 22 is a recommended $316,388 reduction to eliminate funding for the Georgia Teacher Center at Kennesaw State University.
Line 23 is a three percent reduction in our Special Funding Initiatives, totaling $866,034.
Lines 24, 25, and 26 are reductions in the Forestry Research Program, the Office of Minority Business Enterprise, and the Student Enrichment and Education program, and totaling $60,636.
Lines 27, 28, 29, and 30 provide for three percent reductions to the following areas: the Georgia Environmental Partnership, the Georgia Research Alliance Innovation Fund, the Traditional Industries Program and the Georgia Research Alliance Advanced Communications initiative.
Lines 31 and 32 are a three percent reduction for various entities such as the Marine Extension Service, the Public Libraries, the Regents Central Office, the Georgia Public Telecommunications Commission and Georgia Military College, among others.
Let's now look at some of the Governor's recommended additions. These can be found on Pages 273 and 275.
Page 273, line 7 provides for an additional $1.6 million for retirees in the Cooperative Extension Service.
Line 13 is $3.9 million for personal services for the Georgia Tech Research Institute. An error in the calculations took funds out of the base budget in the current fiscal year. This recommendation restores those funds.
On page 275, Line 34 provides for a $450,000 increase in funding for the Georgia
Leadership Institute
for School Improvement. This is a tremendous program that is truly making a
difference in our schools. More than 80 school districts are involved which
serve 64 percent of the state's school children. More than 5,400 schoolteachers
and teacher leaders have had our base line training and 1,070 school and district
leaders have now had the extensive training. There is a new kind of leader
in today's schools.
Through the Leadership Institute, we are seeing a whole new generation of school leaders emerge, ready and eager to work with teachers and school boards to improve student learning. I've had the opportunity to personally be involved in this project and as a former high school teacher and principal, let me tell you -- this is exciting! I wish it had been around when I was in K-12!
Line 36 is a recommendation for $416,914 that will enable the establishment of a Small Business Innovation Research Program and a Science and Technology Policy Center at the Advanced Technology Development Center and Economic Development Institute at Georgia Tech.
Line 37 is for $176,677 to provide maintenance and operating funds to the Cooperative Extension Service for the Rural Development Center in Tifton. These funds will cover the full costs to operate this facility for the fiscal year.
Line 39 will provide $325,000 in additional funds for the Advanced Wood Products laboratory at the Center for Assistive Technology and Environmental Access at Georgia Tech.
Line 40 provides $375,000 in funds for an excellent program at Middle Georgia College -- the Georgia Academy of Math and Science -- GAMES. This program funnels talented high school students into a fast-track program that eventually brings them to top-flight institutions such as Georgia Tech and UGA.
The final addition I'll highlight is under the Tobacco Settlement Funds -- Line 2. This would provide $5 million for the Medical College of Georgia. This is Phase 2 of the Governor's program to make Georgia a leader in cancer research. The recommended funding will help us bring in the expertise to continue our efforts to develop and strengthen MCG's role in this critical health area.
Let me briefly highlight the Governor's recommendations for the FY05 Amended Budget. If you look on page 85, let me bring your attention to several key adjustments the Governor has recommended. All of these items you see on this page are basically housekeeping items.
Let me note that for administrative purposes, a number of state agencies are attached to the University System budget. These are noted on the screen and representatives from these agencies are here today to answer any questions you may have regarding specific recommendations of the Governor for these agencies.
In conclusion, the University System of Georgia is more than a good neighbor; it is a strong partner in each and every one of Georgia's 159 counties. We are committed to working with the Governor, with the General Assembly, the State Department of Education and the Department of Technical and Adult Education to help more Georgians identify and realize their dreams.
We have a great working relationship with DTAE and DOE. Personally, I highly
value the relationship with Kathy Cox and Mike Vollmer. Together, we are exploring
new ways the state's education agencies can help Georgians -- and Georgia grow.
In so doing, we all make progress toward our common goal of "Creating A More
Educated Georgia."
For a more educated Georgia truly is a more prosperous, safer, and healthier
Georgia.
Thank you.
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