Testimony to the Appropriations Committee, LB 154 (economic competitiveness package)

Chairman Mello and members of the Appropriations Committee, I am Dr. Jim Linder (L-I-N-D-E-R), interim president of the University of Nebraska. Thank you for the opportunity to speak in support of a proposal that I am convinced would have a significant impact on Nebraska’s economy, our workforce, quality of life, and the education of our young people. I thank Speaker Hadley for sponsoring this important legislation, and this Committee for its support of two of the components — the health science expansion in Kearney and Nebraska Innovation Campus – in its preliminary budget recommendation. I’d like to spend a few minutes reviewing our full proposal for you, and then I would be pleased to answer your questions.

This economic competitiveness enhancement proposal comes at a time when Nebraska is uniquely positioned to secure a competitive advantage. We fared better than many other states during the economic downturn and today Nebraska and our communities have much to offer — low unemployment, high quality of life, a strong public education system, a vibrant startup community and abundant job opportunities. Omaha was recently named the best American city to be a technology worker. And a list of the top 10 U.S. cities to get a job in 2015 included not one but two Nebraska cities — with Lincoln in the top spot.

But, to borrow from the Omaha World-Herald’s editorial pages, we need to build on Nebraska’s economic strengths, not remain content with the status quo. To quote the newspaper, “Nebraska should look to its strengths and build on economic niches where it excels.” And Nebraska’s public university can — and should — play a leading role in these efforts.

This was the thinking behind our $20 million economic competitiveness proposal. The proposal would advance university initiatives that leverage the talents and resources of our four campuses for Nebraska’s economic benefit. These are initiatives that are already underway at the university, where good work is being done and where we have an opportunity to have an even stronger impact on Nebraska’s economy with the infusion of additional capital.

There is a strong business case for this investment. The potential for workforce development, recruitment of new talent to our state, job creation and expanded educational opportunities is substantial. And the state is positioned to see a significant return on its investment in these projects. Jerry Deichert, director of the Center for Public Affairs Research at the University of Nebraska at Omaha, recently completed an analysis that concluded the economic competitiveness package would create more than 1,100 jobs, generate $58 million in labor income, and have a $108 million impact on the state’s economy in fiscal year 2017. This represents a nearly 5-to-1 return on our requested $20 million state investment. Details of Jerry’s report are included in the binder of information we have provided to you.

I think these are the reasons why our proposal has attracted such strong support from a diverse range of constituents. Letters of support are included in your packets, so I will not recite them, but I would draw your attention to the fact that they represent many of our key stakeholders: students and faculty, the state’s leading business and agriculture groups, rural and urban representatives. We are gratified by this strong show of support from Nebraskans.

Let me touch on the opportunities that we are targeting for additional financial support.

First, the Health Science Education Complex in Kearney, scheduled for completion in July. This project, which will expand our capacity to educate nurses and allied health professionals, was part of our Building a Healthier Nebraska initiative, which this Committee generously supported. And you have again recognized the critical importance of taking steps to meet health needs in rural Nebraska, where shortages of health care workers are especially acute. We are grateful for your support. We are building a building. Now we need to staff it. Additional support will help us hire faculty and staff who will train rural Nebraska’s future health care professionals.

The need for expanded capacity at UNK is clear. Twenty-three 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. And just last week Georgetown University issued a report that spelled out our challenge in no uncertain terms. According to the report, by 2020, the United States could be facing a shortage of 200,000 nursing professionals. We would be wise to act now to address this need.

Second, Nebraska Innovation Campus. The state provided an initial capital investment that we have been able to leverage with significant private-sector funding. Because of that, we are ahead of schedule in having infrastructure and the initial conference center and offices in place. A “maker space” that will foster creative activity in the community and business accelerator for start-up companies are underway. Installation of a LemnaTec plant phenotyping system has begun in the greenhouse innovation center and it will be one of only a handful in the world, capable of greatly advancing our research agenda in plant science. The Department of Food Science and Technology also is relocating there, which will provide exciting new opportunities for joint research activities with ConAgra Foods. And we just announced three new partners – Hastings HVAC, Echo Canyon Services and Quantified Ag – who will move to the campus later this year.

In a few months’ time, Innovation Campus will be bustling with faculty, students and business leaders, which we believe will only heighten interest. Having private companies nearby will expose our students to real-world business activities and create internship and job opportunities that will keep our graduates at home. Innovation Campus is only a few years old but we are more convinced than ever that this project can be a major economic player for Nebraska.

Third, the Peter Kiewit Institute. This is a keen focus of the Board of Regents and university leadership, because 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 regularly hear from leading companies in Nebraska that one of their greatest needs is for more engineers, computer scientists and IT workers. They are counting on the University of Nebraska to meet that need.

We have been very candid with ourselves about where PKI is succeeding and where we need to do more. We engaged external experts in a rigorous evaluation process that concluded PKI has yet to reach its full potential in serving Nebraska. The result of that evaluation was a bold new strategic growth plan, a collaborative effort between UNO and UNL that was unanimously endorsed by the Board of Regents last year. This integrated plan represents the most ambitious agenda for engineering and information technology in our history. Growing enrollment in the College of Information Science & Technology by 50 percent and by a third in the College of Engineering. A two- to three-fold increase in research activity. Fifty more faculty to educate more students, conduct more research and forge more partnerships with the private sector. Improved student outcomes and new, collaborative academic programs to meet their needs.

The plan is beginning to have an impact. We were pleased that enrollment in the College of Engineering grew 8.5 percent this year, and enrollment in the College of Information Science & Technology is up 13 percent – both well above overall university-wide growth rates. But to meet the goals of the plan, and the needs of the state, significant investments in talent and infrastructure will be required. In my view, the cost of not investing – in terms of unmet workforce needs, lost opportunities to attract talent and serve students, and a missed chance to be a global leader in an area that is widely recognized to be a foundation of economic growth – is one Nebraska cannot afford.

Next, the Rural Futures Institute. Nebraska is well-positioned to be a leader in developing strategies for enhancing economic opportunity and improving the quality of life in nonmetropolitan areas. Already the Rural Futures Institute has had an impact in more than 70 communities across Nebraska communities through its innovative rural serviceship program for students. The program is distinct from extension services in that it sends students around the state – from Kimball to Neligh, Valentine to Red Cloud – to work with community leaders on real projects that benefit the community. 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. State support would be a significant boost to these efforts.

Fifth, 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. It is one of only 13 such institutes across the country, a distinction we are very proud of. The NSRI is off to a successful start, with 33 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. For example, one of our faculty members at UNMC leads a team that is working to develop a more effective vaccine for anthrax. His research has the potential to protect soldiers and save lives. Another faculty member, a UNL physicist, is exploring ways to better detect nuclear materials. The NSRI also has provided a vehicle for UNO to launch a leadership fellows program for the nation’s top civilian security specialists. And these are just some of the early success stories. There is significant growth potential for the research and educational activities being done at NSRI.

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. These include a new biomedical institute which will be jointly led by UNMC and UNO and will provide new opportunities for faculty to commercialize their biomedical technology discoveries. The institute has received enthusiastic support from the Board of Regents and represents a major opportunity to fill a gap in the market. We are not the only ones who think so. The Omaha World-Herald recently endorsed this project, calling biomedicine “the next niche” for Omaha and noting that this field offers major economic development opportunities for our state.

Also in the business and workforce category, we are exploring the potential for creating “maker spaces” in Omaha and Kearney that will be tied to local STEM education efforts, and for enhancement of the UNO-based Nebraska Business Development Center. NBDC has a strong record assisting Nebraska businesses, and we are planning to bring it into a new phase of growth, expanding access at its seven locations and initiating an incubation accelerator for new businesses. Finally, we hope to expand support services for veterans at the university, such as counseling, advising, career services, learning communities and financial aid.

Members of the Committee, we know we have put forward an ambitious package. We are very excited about the programs we are targeting for support and we think each can directly benefit Nebraskans and yield a strong return on the state’s investment. Nevertheless, we understand that you may not be able to fund the entire proposal. But should you decide to partner with us, I ask your consideration on two points. One, that any support you provide for our economic competitiveness initiatives come on top of, not within, your baseline investment in the university for our salaries and core operating needs.

And two, that if you decide to provide support, you provide a lump sum that gives the President and Board of Regents the discretion to allocate the funds to the projects that we decide are most pressing and promising. In choosing which programs to fund, the Board and President would look to the university’s Strategic Framework, which you heard about earlier today, to guide us in allocating resources to our highest priorities.

Thank you, and I’d be happy to take your questions.

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