Sept. 16, 2014 – Testimony to Nebraska Coordinating Commission for Postsecondary Education, 2015-17 biennial budget request
Untitled Document

Sept. 16, 2014

Chairwoman Adam and members of the Commission, I am Dr. Jim Linder, interim president of the University of Nebraska. Thank you for the opportunity to present the University’s 2015-2017 biennial budget request, which has been approved by the Board of Regents. I will spend a few minutes outlining our request, and then I would be pleased to answer any questions you may have.

A few days ago I was asked during an interview, if I could change one thing about higher education, what would it be? I thought for a moment and answered, “awareness.” I meant it in a broad sense…awareness of the role of higher education, both in the individual lives of our students, and also in a larger societal context. During a university education students should gain skills to support their career, learn how to learn through critical thinking, and become a person who can contribute to society. And that is the message I hope to leave with you today – that higher education, and the University of Nebraska specifically, plays a vital role in improving the lives of our citizens, and in ensuring the long-term economic vitality of our state through those we educate. This is the guiding principle of our budget request.

One thing that has struck me in my short time as Interim President is how fortunate we are in Nebraska to have a strong working relationship between the University and the State – one that is focused on shared priorities and the best interests of our citizens. And when I talk to Nebraskans, they understand the important role of the University.

Other states are not so lucky. Particularly in the recent economic downturn, many of our peers experienced budget cuts that damaged their quality and reduced access. Meanwhile, in Nebraska, while we too reallocate funds, we have been able to not just maintain the status quo, but advance. Policymakers have continued to show strong support for affordable, quality higher education in the state and have made important investments in initiatives like Nebraska Innovation Campus, the Fred & Pamela Buffett Cancer Center, a health science complex in Kearney and, for the current biennium, an “affordability compact” that allowed for a two-year tuition freeze for all Nebraska students.

We are very grateful for this support. It has helped Nebraska maintain a competitive advantage and I believe the economic payoff – in terms of job creation, workforce development and expanded access for students who want to enjoy the benefits of a college degree – will be significant. Those working at the University are proud of what we contribute, but I constantly remind my colleagues that pride should not lead to hubris. It is our job to support education, research and service to our citizens. What we do must include supporting P-16 goals, STEM education and the mutual goals we share with the state colleges, community colleges and others.

Today, as the nationwide economy is improving, other states are investing in major initiatives tying higher education to economic competitiveness. Wisconsin has proposed a $95 million “talent development” initiative that includes expanded opportunities for entrepreneurship, internships and student and faculty growth. Minnesota is considering a $36 million “discovery, research and innovation” effort. Missouri has put forth a $51 million plan to expand capacity for STEM education and research. Those are just a few examples.

What does this mean for Nebraska? If we want to be competitive edge, we need to keep moving forward.

The facts are clear. The share of working-age Nebraskans who hold at least a two-year degree is slightly above the national average – but with our state ranked seventh in the nation in demand for workers with postsecondary education, we need to do more to make sure college is within reach for all who are qualified and want to attend, and that students who enroll on our campuses are prepared for success.

We have made it a high priority to align our academic programs with the needs of Nebraska companies – but with workforce analyses showing high demand for more nurses, engineers, IT workers, physician assistants and physical therapists, to name a few, we will need to produce more graduates who can fill the jobs of the future. I know workforce development is one of the Commission’s Areas of Emphasis for the upcoming biennium and I strongly agree that growth of high-skill, high-paying jobs in Nebraska should be at the top of our agenda.

We are making significant progress in linking faculty with entrepreneurial experts who can help them commercialize their innovations – the University of Nebraska recently ranked 20th in the nation in licensing revenue from university-developed inventions. Hudl, a startup company from Lincoln, ranks among the highest growing companies on he Inc 500 list. We have great opportunities to do more, so that more Nebraskans can benefit from our faculty’s work in medicine, agriculture, engineering and other areas.

This was our thinking as we developed our biennial budget request. I hope you will keep the same facts in mind as you consider our request.

The key component of our request is a $20 million economic competitiveness package which seeks to advance University initiatives that leverage the talents and resources of our four campuses for the benefit of Nebraskans. Let me briefly touch on the initiatives we are targeting for additional investment:

First, Nebraska Innovation Campus. The state provided an initial generous investment that we have been able to leverage with significant private-sector funding. Because of that, a conference center, “maker space” for innovators, business accelerator for start-up companies, and highly specialized greenhouse center are now taking shape at Innovation Campus. The UNL Department of Food Science and Technology also is relocating there, which will provide exciting new opportunities for joint research activities with ConAgra and other partners. The companies at Innovation Campus will expose our students to real-world experiences, and create job opportunities that keep our graduates at home. Because thousands of jobs can be created at successful university technology parks, the competition is intense. Additional state and private investments are essential for Innovation Campus to have its optimal economic impact. Of our $20 million request to the state, we estimate we would invest about $4 million in moving Innovation Campus forward.

Second, the Peter Kiewit Institute. We have put forward an ambitious strategic plan for PKI that calls for significant growth in enrollment, faculty and research in the UNL College of Engineering and the UNO College of Information Science & Technology so we can better meet engineering and IT workforce needs across the state. The kind of growth we have in mind will require significant investments in talent and infrastructure. But every indicator I’ve seen shows that the demand for more STEM-educated workers, both in Nebraska and nationally, is only going to increase. We were pleased that enrollment in the College of Engineering is up 8.5 percent this year, and enrollment in the College of Information Science & Technology is up 13 percent – both well above the overall university-wide growth numbers. We estimate we would invest about $4.5 million from our request in PKI to begin to meet our ambitious goals.

Third, the Health Science Education Complex in Kearney, which broke ground earlier this year. You may remember that the complex was one component of our Building a Healthier Nebraska initiative, which the state generously supported. We now must staff the building with faculty and staff and we would use about $2 million in state support to do that. These talented employees will expand UNMC nursing and allied health programs at the UNK campus and put us in a better position to meet health needs in rural Nebraska, where shortages of health care workers are especially acute. For example, 23 counties in our state have no physician assistant and there are no physical therapists working in 13 counties. Consider also that about one-third of Nebraska’s physician assistants and physical therapists are between the ages of 46 and 65 – indicating that there will be plenty of job openings in the years ahead.

Next, the National Strategic Research Institute. This is an initiative we launched in 2012 to create a partnership with the U.S. Strategic Command focused on research and development that can advance national security. The NSRI is off to a very successful start, with initial research projects focusing on vaccine development, prevention of foodborne outbreaks, detection of nuclear weapons and other areas critical to the safety of our country. The contract research done at NSRI can grow substantially in coming years, and could have an economic impact on Nebraska of more than $200 million. We estimate we would invest about $1.5 million of our request in the NSRI.

Fifth, the Rural Futures Institute. Nebraska is well-positioned to be a leader in developing strategies for enhancing the economy and quality of life in nonmetropolitan areas, and we will do that through the RFI and the Community Vitality Initiative. The institute is planning to hire faculty experts in key areas related to rural development, continue its successful grant program that funds collaborative research projects relevant to rural communities, and move forward on a new initiative that focuses on workforce development, entrepreneurship, talent recruitment and business growth in rural areas. An investment of about $1.5 million in state support would be a significant boost to these efforts.

And finally, we are exploring a number of business engagement and workforce development opportunities across our campuses that can help drive economic growth in our communities. Collectively we seek about $6.5 million in state support for these opportunities. For example, we’re looking at creating “maker spaces” in Omaha and Kearney that will be tied to local STEM education efforts. We’re also exploring opportunities to more effectively link our research activities with industry, a priority that we share with the Commission.

Beyond the economic competitiveness package, our request also includes support for Collegebound Nebraska, our financial aid program that promises full tuition assistance to qualifying Nebraska students, and a “college pipeline” initiative that will help more underrepresented students – including minority, first-generation and rural students – access and succeed in college. I know that access is a high priority for the Commission and I fully agree that ensuring that higher education remains open to all Nebraskans is our most fundamental responsibility. Our College Pipeline project also ties directly to the Commission’s emphasis on improving retention and graduation rates in our state. It includes expanded outreach to prospective students; growth in our online high school, particularly among underrepresented students; and expansion of our summer bridge programs that help incoming students become familiar with the college environment. These efforts, together with other student-focused strategies our campuses have put in place, will put more students in a position to stay in school and earn their degree. You rightfully expect us to demonstrate continued improvement in this area; we share that goal and monitor our progress very rigorously.

Regarding salaries: The University of Nebraska – like many business in our state – competes on a global stage for talent. We have incredibly talented faculty and staff on our campuses who are responsible for educating our students, conducting research, and performing outreach in every Nebraska county. But if we do not provide competitive compensation, we risk losing key employees we are handicapped in being unable to attract new talent. Our faculty and staff salaries currently lag behind their peers. We hope to make some targeted investments in cases where salaries of key skillsets are particularly far behind the market average.

I’ve spent the past few minutes talking about opportunities for investment. Let me say a word about a topic that is equally important: cost control. I want to assure you that it is a very high priority for the University of Nebraska to be accountable to the policymakers and Nebraskans who invest their resources in us. We have worked hard at cost effectiveness and will continue to do so. We have managed to grow enrollment and research activity without adding employees supported by tax and tuition dollars. We have kept administrative spending at levels that are lower than our peer institutions. We have made $80 million in budget reallocations since 2000 in order to maintain investments in our priorities while also keeping tuition affordable. These cuts haven’t always been easy, but we are proud of the results: Tuition rates that are well below our peers, including the lowest tuition and lowest debt levels in the entire Big Ten; and academic quality that is widely recognized on a national scale. However, when it comes to cost savings, there are always more opportunities. We currently have task forces working on IT, energy utilization, financial transactions, health services, human resources and other areas to identify additional opportunities.  On-line learning is cost-effective, and demanded by students, so we are expanding our use of online learning tools, and studying how our facilities must change to meet the new learning environment. Efficiency will continue to be a high priority for the Board of Regents, the chancellors and myself.

Let me conclude by saying that I feel very fortunate to be Interim President at a time when such great things are happening at the University of Nebraska. Our success is thanks in no small part to the support of policymakers who have generously invested in affordable, excellent higher education. I thank you for that support. Now I ask you to partner with us again as we seek to build on our momentum.

Thank you, and with that, I’d be pleased to respond to your questions.

 

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