Joint Appropriations Presentation
Wednesday, January 15, 2014
Thank you, Mr. Chairman and members of the committee. I appreciate the opportunity to appear before you to talk not just about our budget request but also about some of the new initiatives we are taking to spend money more wisely and effectively in serving our students.
I will ask John Brown to cover the financial details more specifically in a few minutes.
These are challenging times for public higher education. Since FY 2009, our state funds were reduced by more than a billion dollars while our enrollment increased by 9.4 percent.
During Fiscal 14, the amount of state funding per full-time student is about equal to the per student appropriation in Fiscal 1996. And those numbers are not adjusted for inflation.
Every public system in the country has faced these same challenges as state support has declined. Doubts are raised about spending priorities and faculty teaching loads. These are legitimate questions, which we take very seriously.
The rising cost of a college education is a matter I take seriously.
On every campus I visit a student will share the challenges of staying in school with higher tuition and fees, which may be exacerbated by a job loss at home. Sadly, in many cases, a few hundred dollars will make the difference as to whether that student stays in school.
I am deeply concerned about these students, and it is why, from day one, I have emphasized the need for the university system to be more efficient to help keep tuition and fees low.
Let me outline some things we have done:
First, we have worked very hard to limit tuition increases. And we will continue to limit increases. For the past two years, most students have benefited from the lowest increases in a decade. This is true at all institutions, except the research universities.
With regard to tuition, let me digress a moment to address a recent State Audit that reviewed use of out-of-state tuition waivers. As a result of this review the Board of Regents is examining its current policies to ensure that out-of-state tuition waivers are appropriately managed. The Board is expected to act next month.
But I want to unequivocally quash the notion that the value of tuition waivers represents foregone tuition income. That notion assumes that those students would enroll in USG institutions anyway and pay the full out-of-state tuition.
There are not many things that I can guarantee to you will not happen, but that is one of them. In fact, just the opposite will happen; we will lose both students and revenue.
Second, students pay more than just tuition – there are also fees. We have instructed presidents not to request fee increases unless it is absolutely necessary. For example, the number of approved mandatory fee increases has dropped from 67 in FY12 to 29 in FY14.
Thirdly, an increasing financial burden on students is the cost of textbooks. There is encouraging news on this matter. For example:
At the University of Georgia, two biology faculty co-authored an online textbook which has saved their students as much as $200,000.
Our staff, working with the University Press of North Georgia, has published an open-source electronic history textbook that potentially saves each student almost $100; similar efforts are underway for other disciplines as well.
The cost of textbooks is a national concern as reflected in our Affordable Learning Solutions effort done in partnership with the California State University System, exploring the use of free, open-source materials. We are exploring similar arrangements with the university systems of New York and Minnesota.
A fourth major initiative is one that I briefly discussed last year. I told you then that we were in the final stages of a comprehensive space utilization study on each of our campuses.
This effort was motivated by our commitment to assure that we are constructing new facilities based on documented need rather than just the desire to have a new building on campus.
That study was completed last spring and its results were eye opening. The range of space utilization was wide. It is already having a positive impact on campus-based thinking about future needs. Some earlier proposed facilities have already been dropped.
The study immediately influenced the University System’s budget request for the construction of new buildings. For FY2015, we requested only two new buildings.
Also, in the area of capital facilities, the utilization study identified the need to allocate increased resources to maintaining and repairing the huge capital facility investment in the University System.
An increased commitment to our MRR program is not only financially and academically prudent; it is essential to our efforts to meet our stewardship responsibilities. To that end we requested MRR funding of $80 million for FY15.
Related to our emphasis on the MRR funding request is our continuing shift from large and expensive new buildings to what we call “Small Capital Projects;” these are typically projects of $5 million or less which are difficult to fund through the MRR allocation process. A list of those projects is in our budget request.
A fifth focus is to achieve greater administrative efficiency at all levels of the University System. One aspect of this effort is consolidation of institutions within the System.
When I became Chancellor, there were 35 institutions: there are now 31. We must keep our focus on the legitimate needs of our students and the faculty who teach them.
That is the ultimate purpose of consolidation – move money out of administration and into the classroom.
It can be controversial; it is difficult to implement – that is why it is so seldom achieved. However, it is hypocritical to talk about the “New Normal” for public higher education, yet continue to do everything the same old way while expecting different results.
A sixth area of renewed emphasis is that of economic development. To better coordinate and focus the teaching and research achievements of our faculty, we have hired a new vice chancellor of Economic Development and the board has established a standing committee on economic development. The new vice chancellor came to us from the Department of Economic Development.
These actions are directly aligned with the commitment that Governor Deal, the Board of the Technical College System of Georgia and the Board of Regents have made to the over-arching effort we call Complete College Georgia.
All of us working together must raise the education attainment level of Georgians if the state is to be economically competitive for the balance of the 21st century. I will quickly move on, but I would be remiss if I failed to mention three other critically important activities.
One – we want to achieve efficiency in the academic component of our institutions as well as the administrative side.
To that end, we have initiated a formal review and analysis of the degree programs at each of our 31 schools. We want to know how productive they are in terms of enrollment and student graduation.
This effort will not be a one-time snapshot, but an ongoing effort each year. It will create some controversy on our campuses, but it is the right thing to do.
Two – online education. This is a huge area of activity that attracts an extraordinary level of media attention and will continue to do so.
There are those who contend that we are not doing anything; that we are far behind. To the contrary, our colleges and universities have been doing a lot and are in the process of doing more. We are behind, but everybody is behind.
Let me give you a few quick illustrations of what is being done through online education in the University System of Georgia.
Last academic year, our institutions offered 12,031 online courses. In Fall 2012, almost 59,000 students – or 18.7 percent of total enrollment – took one or more online courses.
Since 2009, the number of online courses offered by USG institutions rose from 1,571 to 4,737, an increase of 200 percent.
Georgia Tech has offered 15 Massive Open Online Courses – MOOCS –in subjects ranging from psychology to engineering mechanics, and is launching a MOOC graduate degree program in Computational Science that will save students two-thirds of the cost of a traditional degree.
This spring UGA is leading a multi-institutional pilot offering of a MOOC-based pre-calculus course aimed at increasing retention and progression through this gateway course for degree programs in science, technology and mathematics.
Kennesaw State has just launched a MOOC graduate course in teacher preparation with more than 3,000 in-service teachers seeking to become more highly qualified.
And we are forming a consortium of institutions, led by Georgia State, who will participate in the development of a series of general education courses to be offered in this new, low-cost format.
We also are reaching out to the military as part of our work to increase the college level attainment of Georgians.
To that end, we are partners in Governor Deal’s Returning Veterans Task Force to assure that we are addressing the needs of our veterans.
We’ve established a director of Military Affairs in the System Office and our schools are working to expand on-campus, on base, and online programs to better serve our military citizens. For example, our Soldiers2Scholars program has helped to establish military outreach centers on 22 of our campuses.
We’re currently developing a means to help all military students receive appropriate college credit for their military training. And we have taken action to lower the out-of-pocket expenses for all our military students attending college through their GI benefits.
With support from a private endowment, Georgia Southern has established a Wounded Eagle Fund to provide financial assistance to wounded warriors or veterans with financial need.
As further examples of our military outreach, Georgia Perimeter College has established a Mentoring Veterans Program that pairs faculty and staff with veteran students.
Georgia Tech provides a VA-approved program that places veterans in internships with employers while receiving training, and Kennesaw State offers free entrepreneurship training to help veterans become successful business owners.
The Green to Grad Program at Georgia Regents University is training veterans with military medical training and experience as physician assistants. Abraham Baldwin offers a program that allows Army medics to become registered nurses with one year of study.
Third and lastly, and I will stop with this, even though there are other matters I would like to discuss with you. We are in this education ballgame with multiple partners, especially the Technical College System and the K-12 system of public education.
It is easy for those of us in postsecondary education to be critical of public schools about the quality of Georgia’s high school graduates. There are clearly legitimate concerns there.
HOWEVER – and that is a big however – we in the University System must look inward as well. Statistics show that more than 50 percent of Georgia’s public school teachers are graduates of one of our 22 teacher education programs. We may very well be part of the problem.
Working with the Department of Education and the Professional Standards Commission, we are launching a professional and objective evaluation of each of these programs.
This evaluation will have consequences; ultimately the graduates of those programs who do not perform at a high level will not receive a teaching certificate and the teacher education programs in our institutions graduating those students will not be allowed to continue.
Now, admittedly this is tough medicine, but folks, this is serious business and it’s time we do what we must do.
Mr. Chairman, I will conclude with these words.
It has become fashionable to question the value of college. When I have the opportunity to speak to high school students, I warn them not to listen to the “siren song” that college is not of value. It is a song that ill-serves the individual and the collective society.
The truth is just the opposite. We live in a time when labor surveys indicate that in the near future, two-thirds of the working age population will need some level of post-secondary credential to compete for jobs.
A McKenzie Global Institute analysis projects that by 2020 the world’s advanced economies may face a shortfall of more than 16-18 million college-educated workers.
Data show that those with a bachelor’s degree or higher have lower unemployment rates and higher earnings than those who do not.
The national 2012 unemployment rate for all workers was 6.8 percent. For those without a high school diploma it was 12.4 percent; with a high school diploma it was 8.3 percent and with a bachelor’s degree just 4.5 percent.
And a person with a bachelor’s degree can expect to have lifetime earnings of nearly $2.3 million, compared to $1.3 million for a high school diploma.
Put another way, a college education yields 74 percent more in lifetime earnings than a high school diploma. One sure way to increase state revenues and hold the line on taxes is through our work to help more students earn a degree.
While there is a proven financial value to college for the individual and for our state, there is equal or greater value of having an educated and informed citizenry.
In these ways mentioned this afternoon the University System of Georgia is becoming a more student-centered system. I challenge our presidents at all turns to be creative about ways to contain costs, not just raise revenue.
I opened my remarks talking about challenging times. But these also are times of great opportunity for us in higher education to rethink and restructure how we serve students and the larger society. We are committed to this course.
We are not ignoring our challenges. We are tackling them.
We are making some decisions that are not easy or comfortable, but they are the right decisions for our students and the State of Georgia.
We have a Board that understands the need to act – today – in order to ensure the University System prepares our students for tomorrow.
We are reshaping public higher education in Georgia. We are not finished. But with your help, we will finish.
Thank you Mr. Chairman.