Vol. 37, No. 2, Spring 2000

[ Contents ]

The spending impact of the University System of Georgia on the state was $7.7 billion in Fiscal Year 1999, according to a study funded by the Board of Regents Office of Development and Economic Services' Intellectual Capital Partnership Program (ICAPP). The study was conducted by Dr. Jeffrey M. Humphreys, director of economic forecasting for the Selig Center for Economic Growth in the University of Georgia's Terry College of Business. Humphreys said the FY 1999 figure represents a $464 million, or 6.4 percent increase, over the System's FY 1998 spending impact of $7.3 billion.

"The return on the investment that is being made in higher education in Georgia is both economic and educational."
      - Chancellor Stephen Portch

Humphreys was charged with creating an economic template that would define and enhance understanding of how Georgia's public colleges and universities contribute to the state's economy. This template can be updated from year-to-year to provide an ongoing source of data on the spending impact of the System's 34 institutions.

According to Humphreys, the spending impact is reflected in "the simplest and broadest term." He calculated the "output impacts" -- the most-inclusive, largest measure of economic impact -- of each of the 34 University System institutions on their host communities by analyzing three important categories of college/university-related expenditures:

• Spending by the institutions themselves for salaries and fringe benefits, operating supplies and expenses, and other budgeted expenditures;
• Spending by the institutions for capital projects (construction); and
• Spending by the students who attend the institutions.

In addition to their spending, Humphreys said the University System's 34 institutions also collectively accounted for nearly 100,000 jobs in the state during FY '99 -- 2.7 percent of all the jobs in Georgia, or about one job in 37. This represented an increase of 5.6 percent over the 94,703 jobs created by the System in FY '98.

Approximately 42 percent of the University System's jobs are on campus -- as employees of the University System of Georgia -- and 58 percent are off-campus in either the private or public sectors. For each job created on campus, on average there are 1.4 jobs created off-campus because of spending related to the institution.

"We often talk about investing in education," said Chancellor Stephen R. Portch. "This study demonstrates that the return on the investment that is being made in higher education in Georgia is both economic and educational."

The System also generated $3.6 billion in labor income, an increase of 10 percent over FY 1998's $3.2 billion labor income figure. Humphreys' study delineates the economic impact of the University System and each of the 34 campuses into the following categories: Initial Spending; Output Impact; Value Added Impact; Labor Income Impact; and Employment Impact.

Of the University System's $7.7 billion total spending impact, $4.9 billion, or 64 percent, represents initial spending by the institution and students attending the institution; the remaining $2.8 billion, or 36 percent, is the induced or re-spending (multiplier) impact.

Humphreys said the $7.7 billion figure is conservative, because it does not include additional categories of economic impact. Excluded were factors such as employee spending, spending by former employees receiving retirement benefits from the University System, or consulting by University System employees and the corollary spending that results from such income.

It also does not reflect spending by visitors to the System's campuses for conferences, professional meetings, alumni reunions, etc. Nor does it include the impact of athletic events, or visits to the campuses by the parents and friends of matriculating students. In addition, it does not measure any of the long-term benefits of the University System to the state's economic development, quality of life, or the increased lifetime earnings of its graduates.

Because the study is not a net benefit analysis, it also does not calculate what the presence of a tax-exempt college or university costs the community in which it is located.

Many factors contributed to the System's increased economic impact, according to Humphreys, such as construction of campus facilities, an increase in grants and contracts to System institutions, faculty and staff salary increases, and "aggressive spending by our students," among other factors.

"We are not divorced from the long and strong positive economic cycle that's being experienced nationally," Humphreys stated. "In addition, Georgia is the fastest-growing state east of the Mississippi and the fourth-fastest-growing state in the nation. As a state, we are growing at twice the national rate (2 percent versus 1 percent), and this growth has a direct impact on the economy." ¶

[ Contents ]

Research grants, contracts and gifts to the University System of Georgia's institutions totaled nearly $575 million in Fiscal Year 1999, a 7.1 increase over Fiscal Year 1998. The increase was highlighted in a report delivered to the Board of Regents' Committee on Education, Research and Extension during their March meeting.

"This is good news for Georgia," said Associate Vice Chancellor of Planning and Policy Analysis Dr. Cathie M. Hudson. "This increase indicates the high regard in which the System's institutions are held by government agencies and the corporate sector. It is a yardstick by which we can measure the volume of research activity, and the trend reflects an impressive and broadening level of activity among our universities and colleges."

These "extramural" funds (or funds from sources other than state appropriations and tuition and fees) extend the ability of the state's universities and colleges to serve the state. University System institutions are awarded grants to create and apply new knowledge and to address the research and development needs of businesses throughout the state and nation. In addition, contracts and agreements are forged between individual institutions and state and local government and other agencies to provide services which tap University System of Georgia expertise.

University System Fiscal Year 1999 research funds were disbursed among three categories: instruction, $55,410,399; public service, $167,773,691; and research, $251,494,357. The federal government was the source of 48 percent of the funds, the state provided 27 percent, industry contributed 10 percent, another 5 percent came from the nonprofit sector, 1 percent from local sources and 9 percent from other sources.

Some of the top research grants in the University System in Fiscal Year 1999 included:

• An $8.1 million grant from the U.S. Department of Energy to the University of Georgia for the Savannah River ecology laboratory project;
• A $7.7 million grant from private industry to the Georgia Institute of Technology for a gigascale integration project;
• A $2 million grant from the National Science Foundation to Georgia Tech for a research center for engineering living tissue; and
• A $2 million grant from the U.S. Agency for International Development to UGA for a sustainable agriculture and natural resource management collaborative project.

The growth in extramural funds received by University System institutions mirrors national trends. A study released this past December by the Industrial Research Institute, a nonprofit group based in Washington that represents large companies, notes a growth in research dollars nationally. From 1994 to 1999, the study said, American industrial research and development grew to a projected $166 billion from $97.1 billion, a rise of 71 percent. ¶

[ Contents ]

Representatives from the Pappas Consulting Group, Inc., Arthur Andersen LLP and MGT of America, Inc. -- the partnership selected in a competitive bid process to conduct the University System of Georgia's Benchmarking/Management Review -- appeared before the Board of Regents during the March meeting for a status report on the comprehensive project.

The management review is a collaborative effort being conducted by Gov. Roy Barnes and the Board of Regents aimed at measuring the University System's performance against other higher education systems and assessing the effectiveness and efficiency of its business practices. The generated data, findings and recommendations will be used to inform decision-making and to enhance business practices.

Gov. Barnes has conducted three assessments of state agencies; however, the Board of Regents is the first agency to volunteer for participation in the Governor's initiative. By volunteering for the process, the Board of Regents was able to link the Governor's efficiency audit with its own planned benchmarking initiative. The external review will evaluate the performance of the University System's 34 institutions, review the business practices of the Board of Regents central office and a representative sample of System institutions, and review the System's data systems and data administration processes.

"The Pappas, Andersen and MGT group brings tremendous expertise to this project," said Chancellor Stephen R. Portch. "They have assembled a team of experts with an understanding of the context of public higher education and have approached the project with an appreciation of the enormity of its scope and impact. I'm confident that we'll see informed and meaningful recommendations for improvement in keeping with our strategic priorities."

The Pappas Consulting Group is the prime contractor for the project. Its president, Alceste T. Pappas, Ph.D., serves as the project leader/director. James H. Roth, partner-in-charge of Arthur Andersen LLP's Higher Education Practice, serves as project co-leader/director. J. Kent Caruthers, Ed.D., senior partner of MGT of America, Inc., is directing the benchmarking components of the review.

The review will encompass the University System's academic and research areas, as well as its service support and administrative operations. The consultants will:

• Conduct a benchmarking study of all 34 System institutions (by sector), focusing on selected strategic performance indicators and suggest target ranges for performance and practice;
• Perform a management review of the central office as it relates to the management of the USG institutions; and
• Develop a structured, effective, formalized process for the USG to use in collecting data, performing analyses, and reporting accountability.

The eight-month project began in March, and will continue through mid-October of this year. Periodic progress reports will be provided to Board of Regents and System officials, with the final report scheduled for October. ¶

[ Contents ]

[ Contents ]

Dr. Arthur N. Dunning, senior vice chancellor for Human and External Resources for the University System of Georgia, has been selected as the University of Georgia's new vice president for public service and outreach. Dunning will assume his new post July 1, 2000.

Dunning has served in his current post since 1995, where he oversaw the System's human resource and external affairs functions and was instrumental in starting the university system's Intellectual Capital Partnership Program (ICAPP), which fosters economic growth in Georgia, especially in technology driven industries. He also served at the Regents office from 1987 to 1992, as senior vice chancellor for services, with responsibilities for all matters related to public service, outreach and international programs at the system's 34 institutions.

Active in education on several fronts, Dunning has served as chief executive officer of the Georgia Partnership for Excellence in Education and has served on the executive committee for the Georgia Council on Economic Education. He also has held academic posts at Kennesaw State University and the University of Alabama. At UGA, Dunning succeeds Dr. S. Eugene Younts, who retired as vice president after 28 years of service. ¶

[ Contents ]

A durable new total ceramic hip replacement, which doctors say may offer even the youngest patients a lasting solution to related pain and disability, is being evaluated at the Medical College of Georgia (MCG) for Joint Replacement. MCG is one of 11 sites in the nation evaluating the latest of the hip replacement devices. The device, which replaces diseased or damaged hip joint with a ceramic-covered ball and ceramic-lined cup, has been used successfully in other countries but has yet to be approved for general use in the United States.

Over the next two years, MCG co-directors of Joint Replacement Dr. R. Scott Corpe and Dr. Timothy R. Young will enroll about 100 active people 21 years and older in a study to test the longevity of the new total ceramic device. Studies will compare the new ceramic device with the standard replacement made of ceramic and polyethylene, which has a life expectancy of 10 to 15 years. Researchers hope the total ceramic device will last longer than the currently used structure, thus eliminating the need for second and third surgeries, particularly for young patients.

"We are hoping to make this a one-time operation," said Corpe. "I think this is possibly the second biggest advancement I've seen in 15 years of doing hip replacements." ¶

Georgia Tech is partnering with the Rockdale County Public School System to create a new concept in public education with the development of a science and technology magnet high school in that county. The project includes private sector partners AT&T and Lithonia Lighting.

The Rockdale Magnet School for Science & Technology is scheduled to open in August 2000 and will be housed at Rockdale County High School. Students selected to participate in the program will fulfill all requirements for high-school graduation while taking mathematics, science and technology courses that extend well beyond the standard college preparatory curriculum.

Magnet courses will provide students with research and course opportunities previously available only to college-level students. A maximum of 40 students each in grades 9 and 10 will be accepted into the magnet school during the first year. During subsequent years, the program will be offered only to rising ninth graders.

Georgia Tech's College of Engineering and its Center for Education Integrating Science, Mathematics and Computing (CEISMC) will help develop the curriculum and research components for the school. The projects private sector partners will assure the magnet school provides the skills and education necessary to meet their workforce demands.

The new school will support the goals of the Yamacraw Mission, a major state economic development initiative designed to increase the talent pool for electronic design and telecommunications in Georgia. The school also will be linked to the Lycée De La Communication, a similar high school located near the Tech Lorraine campus in Metz, France. ¶

[ Contents ]

Georgia Southern University announced plans for a $2 million Phase II expansion of its nationally acclaimed Center for Wildlife Education and Lamar Q. Ball, Jr. Raptor Center.

The expansion will more than double the center's current acreage. It will feature a new ornithological center that will introduce visitors to bird watching and an innovated watershed system that will highlight the contributions of wetlands in an observable and measurable wetlands macro-laboratory. More than 40,000 students and thousands of visitors have attended the Center and its programs.

"The Center already offers an environmental education experience unlike any other," said Center Director Steve Hein. "The Phase II expansion will make us a national leader in our field. With funding from early sponsors, including the late Lamar Q. Ball, Jr. and philanthropic foundation support, our Phase II expansion is already 45 percent funded." ¶

The Southern Polytechnic State University chapter of the National Society of Black Engineers (NSBE) brought home top awards from the recent NSBE Spring Regional Conference. The SPSU chapter was recognized as the Region 3 Chapter of the Year and received honors for Academic Excellence and Outstanding President.

"I am tremendously proud," said Southern Poly's NSBE President Rosalind Newton. "These awards reflect our chapter's dedication to fulfilling the national mission of increasing the number of black engineers who excel academically, succeed professionally, and positively impact the community." Newton received the organization's award for outstanding president presented for exceptional leadership. The SPSU chapter was presented with the Academic Excellence Award, given to the chapter that best increases overall GPA and develops methods for members to enhance their academic success.

Southern Polytechnics' chapter bested organizations from Georgia, Florida, Alabama, Mississippi, Kentucky and Tennessee to win the Chapter of the Year award. The university's chapter of the NSBE was established in 1987 and currently has 81 members. ¶

[ Contents ]

Beheruz Sethna Named Citizen of the Year Dr. Beheruz Sethna, acting senior vice chancellor for Academic Affairs for the University System of Georgia and president of the State University of West Georgia, was named the Carroll County Chamber of Commerce 1999 Citizen of the year as "someone who has helped make Carroll County an even better place and elevated our learning environment to one of the best in the United States". The award recognizes chamber members for their long-term commitment to the organization and the community. When accepting the award, Sethna acknowledged the university's many partnerships with the county. ¶

[ Contents ]

For the fourth straight year, the Skidaway Institute of Oceanography has won the Governor's Cup, which is the State Charitable Contributions Program's highest award. The awarding of the Cup, donated by BellSouth Corporation, is based on the highest contribution per employee, adjusted for the average salary

Three System institutions received the "Governor's Award:" Georgia Institute of Technology for the largest increase in contributions; Atlanta Metropolitan College for the highest level of employee participation; and Georgia Southwestern State University for the highest increase in the percent of participation.

Other institutions received the "Commissioners' Award," which is given to the highest contribution per employee.

In the 101-500 employee category, Savannah State University, Armstrong Atlantic State University, Dalton State College and the Board of Regents Central Office were cited.

Georgia College & State University was recognized for a Commissioners' Award in the 501-1,000 employee category; Georgia State University in the 1,001 - 9,000 employee category; and the University of Georgia in the 9,001 and up employee group. ¶

Michael Windlespech, assistant professor of biology at Floyd College, has developed an on-line tour of the Floyd College Wetland Preserve, bringing the wonders of the wetland to the classroom. Known as Cyber-Swamp, the on-line tour supplements personal visits to the Floyd College Wetland with text, photos, multimedia presentations and film. The website allows K-12 teachers to have unlimited access to the facility and provides educational materials.

The site can be visited at: http://gaia.fc.peachnet.edu/swamp/ A 25-acre natural wetland on the college's central campus, the preserve features a 1,200 foot boardwalk with an elevated observation deck. The wetland is home to many species of wildlife, including most of Georgia's threatened and endangered species. ¶

[ Contents ]

Health-care costs are on the rise across the nation, and University System employees have not been immune to the escalating impact of this trend. Rising costs have led to the adoption of significant changes to the University System of Georgia's health care plans that will be implemented later this year.

Currently, the University System's approximately 35,000 employees' healthcare benefits are covered either through an HMO or a self-insured plan. The self-insured plan is administered by Blue Cross-Blue Shield through a contract with the Board of Regents.

"We are extremely concerned about the national trend in health care costs and the impact that is having on the System and our employees," said Dr. Lindsay Desrochers, senior vice chancellor for capital resources for the Board of Regents.

"It is our goal to ensure all our employees have high quality coverage at the most affordable rates possible. But we must all understand that in order to continue to provide such benefits, changes will be necessary to ensure the financial stability of these programs," Desrochers said.

Rising costs during 1999 and the first part of 2000 led to a one-time appropriation by the General Assembly of $33 million to cover losses incurred by the plan. This was part of a larger $200 million plus appropriation by the General Assembly to cover losses for all State of Georgia health benefit programs. However, the regents recognized that such an appropriation could not be a yearly exercise, and a thorough review of the existing health benefit plans - both the self-insured plan and HMO programs - was in order.

Since last fall, University System officials have worked closely with members of Gov. Roy Barnes' new Department of Community Health (DCH) to determine alternatives to the current plans. The focus has been on preserving a full range of health-care benefits and services while controlling costs and premiums paid jointly by the System and employees.

At its March meeting, the Board of Regents took action on several recommendations for cost containment in the health plan for University System of Georgia employees, retirees and their dependents (please see the related summary of the Board of Regents actions). A memo outlining those actions and future plans was distributed to all System employees in March.

The Board also approved a new Preferred Provider Option for employee health insurance. In order to assure effective implementation, this new PPO will go into effect on January 1, 2001.

The PPO will offer a range of services similar to the current indemnity plan, but will have lower premium costs. Since implementation begins in January 2001, the open enrollment period will be held in November.

At the May Board of Regents meeting, regents will vote on a recommended health insurance premium increase for the Blue Cross-Blue Shield Indemnity Plan to be phased in on August 1, 2000 and in January, 2001. As details are finalized, communications will be made with System employees concerning the implementation of changes in deductibles, out of pocket limits and lifetime maximum coverage. ¶

[ Contents ]

[ Contents ]

The Senate Higher Education Committee -- chaired by Sen. Jack Hill (D-Reidsville) -- confirmed the six regents appointed or reappointed by Gov. Roy E. Barnes in a special hearing held at the capital during March. Gov. Barnes had held a swearing in ceremony for the six regents in his offices. Appointed are; Regents Joe Frank Harris (Cartersville), Martin W. NeSmith (Claxton), Joel O. Wooten, Jr. (Columbus) and Connie Cater (Macon). Reappointed were Thomas F. Allgood, Sr. (Augusta) and James D. Yancey (Columbus). ¶