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					Presentation for the Greater Colorado Springs
     Economic Development Corporation




           Dr. Pamela Shockley-Zalabak, Chancellor
                        June 25, 2004
America’s Competitive Edge is at Risk

    There is a crisis in funding public higher education in the
     state and nation
    America’s competitive edge is in jeopardy
       Colleges and universities have been the backbone of
        the the country’s progress
       Partnerships among government, industry and
        academia provide America’s competitive edge
―The key factor going largely
unheeded is the rise of creativity
as the central force in our
economy.‖

―The presence of a major
research university is a huge
advantage in the Creative
Economy—more important than
the canals, railroads and
freeway systems of past epochs –
and a huge potential source of
competitive advantage.‖
21st Century Workforce
• Forrester Research predicts that at least 3.3 million
  white-collar jobs and $136 billion in wages will shift
  from the United States to low-cost countries by 2015
   – Call centers and low-end R&D
      • In India, a call center worker earns about $2,700/year, while
        a new graduate with a degree in IT will make around $5,000
      • In China, an IT professional earns about one-sixth of a U.S.
        IT worker
• U.S. competitiveness is high-end and creative R&D
   – Requires partnerships with government, industry and academia
Higher Ed’s Industry Strength Sectors
               In Colorado’s universities:
               • Biotechnology/Life Sciences/Biosecurity
               • Storage/Computer
                 Technology/Telecommunications
               • Aerospace
                   – President Bush’s space exploration initiative could hav
                     important implications for the state of Colorado
                     (Lockheed Martin, Ball Aerospace)
               •   Sciences/Atmospheric
               •   Agriculture/Ecology
               •   Energy
               •   National Labs
               •   Homeland Security
  Strategic Issues: Changing Paradigm of Higher
                 Education Funding
• Public Support to Higher Education
   – How well does the State of Colorado Fund Higher Education
   – Action: Possible voter initiatives for Constitutional / Statutory Reform
• Shift Toward Allowing Market Pricing
   – Affordability / Accessibility
   – Action: Tuition & Fee Marketing Study; Enterprise Status; Performance
      Contracts
• Diversification of Resources
   – Foundation generated resources
   – Sponsored Research
   – Action: Development of CU 2010 Campaign
• Communicate the Message
   – Demonstrate how Higher Education can help the State
   – Action: Enhance image as good stewards of resources
Colorado’s
 Two-year
   Change
   -21.8%
State Budget FY1990: $2.5B                      State Budget FY2004: $5.7B
                                                                           Human
                                 Human
                             Services/Health                           Services/Health
Corrections   Other                                          Other          Care
                                  Care         Corrections
   10%         3%                                             3%            30%
                                 23%              12%




                                  Higher
   K-12                General   Education
                                   20%           K-12                 General
   42%                Government                                                    Higher
                                                 43%                 Government
                         2%                                                        Education
                                                                        1%           11%
  CU’s FY1990 Total Budget:                                     CU’s FY2004 Total Budget:
  $634M                                                         $1.62B
                                                                   Investment
                                   Clinical                 Sales &               Other
     Sales &
                           Other                                      0.3%                Clinical
                Investment
                           1.6%     1.0%        Gifts,      Services              2.7%                 Gifts,
 ICR Services      1.8%                        Grants,       5.6%                          7.0%
                                                                                                      Grants,
 5.0% 4.3%                                    Contracts
                                                                                                     Contracts
                                               27.9%            ICR
Auxiliary                                                                                             35.5%
 9.6%                                                          6.4%




                                                          Auxiliary
 Tuition &                                                  7.4%
   Fees
                                    State                             Tuition &                       State
  23.7%
                                                                        Fees                         Approp
                                    Approp
                                                                       25.4%                          9.6%
                                    25.1%

Source: FY1990 Annual
Financial Report
                              Public Support for Higher Education:
                              Change in CU Appropriations Per Resident FTE
          15%

          10%                                             Post-TABOR
                                                                       2% Tuition Buy Down

          5%     Pre-TABOR

          0%
                1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
          -5%
Percent




     -10%

     -15%

     -20%

     -25%

     -30%
                            Public Support to Higher Education:
                                 How Does CU Compare?
        Change in State Tax Fund Appropriations per $1000 of State
             Personal Income between FY 1978 & FY 2004
                              Nebraska (-26%)

                   Michigan (-33%)


           Pennsylvania (-40%)


Colorado (-68%)


  -78        -68     -58    -48      -38     -28   -18     -8        2
                                  % Change
                Public Support for Higher Education:
Higher education drops from 20.3% of the state GF Budget in 1990 to 10.2% in 2005
50.0%
45.0%
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%                                                        Estimate
    F Y 90

    F Y 91

    F Y 92

    F Y 93

    F Y 94

    F Y 95

    F Y 96

    F Y 97

    F Y 98

    F Y 99

    F Y 00

    F Y 01

    F Y 02

    F Y 03

    F Y 04

    F Y 05

    F Y 06

    F Y 07

    F Y 08

    F Y 09
          10
       19

       19

       19

       19

       19

       19

       19

       19

       19

       19

       20

       20

       20

       20

       20

       20

       20

       20

       20

       20

       20
  FY




                     Higher Ed    Corrections     Health Care          K-12
              Vision Statement

 The University of Colorado at Colorado Springs
will provide unexcelled, student-centered teaching
    and learning, and outstanding research and
creative work that serve our community, state, and
nation, and result in our recognition as the premier
  comprehensive, regional research university in
                      America.
        UCCS Enrollments
                Resident   Non-Resident

6,000
5,000
4,000
3,000
2,000
1,000
    -
         2000      2001    2002    2003   2004
  OPPORTUNITIES FOR UCCS IN THE FUTURE
Lead the Southern Colorado strategy for the CU system

    The per capita income of the southern Colorado counties trails
   the northern part of the state due in part to the lack of research
   universities and innovation areas.

    UCCS intends to take the lead to help southern Colorado make
   up ground on the northern part of the state through a number of
   creative initiatives.

        Examples would include teacher training, pre-collegiate
       programs, developing research and innovation zones,
       partnering with defense agencies, and an expansion of
       humanities works at the Heller Center.
University of Colorado Appropriations and
Enrollment Changes
                                        Resident FTE Students
                     35,000

                     30,000                                                                            $200
    Students (FTE)




                     25,000
                                                                                                       $150




                                                                                                              $ in millions
                     20,000

                     15,000                                                                            $100

                     10,000
                                                                                                       $50
                      5,000

                         0                                                                             $0
                              1995   1996   1997    1998    1999   2000   2001   2002    2003   2004

                                                   Enrollment      CU GF Appropriation
                                                                Median
   Fl
        or
           id
                a
                    At
                       la
                         nt
                           ic
                                Un
                                   iv
                Un              (B
               v   i    CU oc
                            N            a




                                                         $2,000
                                                         $4,000
                                                         $6,000
                                                         $8,000
                                                        $10,000
                                                        $12,000
                                                        $14,000
                                                        $16,000




                                                             $0
                  of           Y            Ra
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    Un                  is           i            n)
                 Te        s o ty C
       iv           xa         ur            ol
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  Un          No s A                  St          ge
      iv          rth &M                  .L
         of
                                  (K oui
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                           ro          in         s
               nn                         gs )
          Un es               lin             vi
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             iv           e          Ch lle)
                 of          (C            a
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            Un        ic            tt           te
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                             ga ano )
                   of            n            og
                      Ne           (D             a)
                           br           e
         Un                   as arb
                      Po          ka           or
             iv                         (O        n)
                                                                                               FY 2004

                                                                         State Appropriation




                 of       rtl
                              an            m
                    Ho           d            ah
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                            to           at
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Un                  la          t              ak
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      of                               ta
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                                                                                                                                                                                  UCCS vs. Peers in Funding




                            Un
         Co          Un         iv            Un
            lo           iv         (M             iv
               ra                        ic
                  d         of
                                                                         Tuition & Fees




                                 N          hi
                     at                        ga
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                             lo           O
                                ra          rle
                                   do           an
                                         Sp s
                                             rin
                                                 gs
                                                                                                         State Appropriations and Tuition per SFTE at Current Peer Institutions




                                                            $3,552
                                                            SFTE =
                                                            Gap per
                                                           Resource
                                                                                         Median
                     W
                         ay
                           ne
                                St
                                     at
                                        e
                                            U




                                                                               $10,000
                                                                                           $15,000
                                                                                                     $20,000
                                                                                                               $25,000
                                                                                                                         $30,000




                                                                $0
                                                                     $5,000
                                                -D
                                                  et
                                                     r   oi
                                                            t
                                W
                                    is         IU
                           U          co           PU
Un
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                                              in         I
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                 rth         N            -B            .
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                                 O             U
           Un                      ld             ni
                                                      v.
                                                                                                                                   State Appropriation




               iv                      Do
                                                                                                                                                                                        FY 2004




                  .o           G            m
                     fM          eo             in
           Fl                        rg            io
              or         ar
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                 id         yl              M
                    a          an
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                                  -B               or
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                   Un         hi              Ra
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                                                       n
                                                                                                                                   Tuition & Fees




                          .o         St
                                                                                                                                                                                                                                   UCCS vs. New Peers in Funding




                                         at
                             fC             e
                                 ol            Un
                                    or               iv
                                       ad               .
                                            o
                                              at
                                                   CS
                                                                                                                                                         State Appropriations and Tuition per SFTE at Proposed Peer Institutions




                                                                               $6,075
                                                                               SFTE =
                                                                               Gap per
                                                                              Resource
              CAMPUS CHALLENGES

 NO STATEWIDE TABOR SOLUTION COULD FOREVER CHANGE
THE TYPE OF STUDENTS WHO CAN ATTEND UCCS
 PELL ELIGIBLE STUDENTS IN 2002 BY CAMPUS:
       UCB: 13.0%
       UCCS: 24.9%
       UCD: 16.2%
       UCHSC: 19.4%
THUS, A SHARP INCREASE IN TUITION RATES, EVEN WITH NEW
FINANCIAL AID INVESTMENTS, COULD PRESENT ENROLLMENT
PROBLEMS FOR THE CAMPUS.
 COMPOUNDING THIS ISSUE, THE SOUTHERN COLORADO
REGION IS LESS AFFLUENT THAN OTHER REGIONS IN THE
STATE, AND INCLUDES THE 6 POOREST COUNTIES IN THE
STATE IN PER CAPITA GDP.
Colorado’s
  Major
 Research
Universities




   Colorado’s
    Growing
    Research
   University -
     UCCS



  Southern CO
  Region
                      Cost of Attendance—FY 2005


            Tuition                    Fees   Room/Board Total     % Change
UCB         $3,690                     $861     $7,564   $12,115     9.9%


UCCS $3,206                            $827     $5,999   $10,032     3.8%


UCD         $3,210                     $806        $0    $ 4,016     9.9%


HSC         $9,270                     $210        $0    $9,480      7.7%
(based on resident nursing students)
CU-Colorado Springs
National Rankings
 Ranked fifth among public
  Western master’s universities.
 Undergraduate business is third
  among master’s universities in
  the West.
 Nursing is tied for second
  among master’s universities in
  the West.
CU-Colorado Springs
Distinctions  AASCU’s “most engaged”
                     Community and rural Colorado
                      outreach

                Student Achievement
                 91 percent “pass” rate on PLACE
                  exam for elementary educators (78.6
                  % state average)
                 93 percent “pass” rate for RN (#1
                  among state universities)
                 1st in State CPA exam results
                         Communicating the Message:
                   The State’s return for it’s investment in CU

                                                              Return on Investment

• A Premier Public Research Institution                $200
• Educating more than 40,000 Colorado
  resident annually                                    $150




                                                                          $165
                                              $ in M
• Providing the only public medical




                                                                                          $157
                                                       $100
  education in the State




                                                                   $217
• Providing jobs to over 23,000 Colorado




                                                                                   $155
                                                        $50
  residents
• CU students and their visitors spent over              $0
  $742 million in Colorado in FY 2002                           FY 2002           FY 2004


                                                        GF to CU      Recaptured State Taxes
Partnerships: CU Institute for
Bioenergetics
Directors: Karen Newell and Robert Camley
      Study of human immune system
       interaction with cell metabolism
      Four-campus institute
      Three companies have been developed
       to test theories, bring to market
       (Colorado Springs, California and
       Vermont).
                          Advances
Partnerships: Network Information
and Space Security (NISSC)
New federal funding – $3.0 million
   New partnerships with Homeland Security
    Educational Consortium
         U.S. Northern Command
         National Defense University
         UCCS
         University of Denver
   Seed grants for Northern Command priorities
         ENTREPRENEURIAL ADVANCES BY UCCS
   Additional facilities acquired including the former headquarters of
  Compassion International have provided needed space for growing programs.




University Hall – acquired in January, 2003, at the corner of Austin Bluffs and
Union, houses the Beth-El College of Nursing, TheatreWorks, NISSC and
engineering programs.
          ENTREPRENEURIAL ADVANCES BY UCCS
 Existing facilities were renovated to provide needed space for financial aid
offices, recruiting and the first orientation center for new students in the
campus’ history.




Cragmor Hall – originally built as a nursing home in the 1950’s was boarded up after being
“defunded” by the state in 2001. With the help of the Boettcher Foundation and the local
EDC foundation, the campus re-opened the building in January 2004.
    ENTREPRENEURIAL ADVANCES BY UCCS

 Establishing new
partnerships with Air
Force Space
Command, U.S.
Northern Command,
Air Force Research
Labs, Sandia
National Laboratory,
and other partners in
Colorado and across
the U.S.


   Chancellor Shockley-Zalabak signing MOU with Mr. Lenny Martinez,
            V.P. of Sandia National Laboratory, May 11, 2004.
          ENTREPRENEURIAL ADVANCES BY UCCS
     Additional amenities such as student housing will make the campus more
    attractive to prospective students, including out-of-state students.




New $17 million UCCS Student Housing – Alpine Village, to open August, 2004
             ENTREPRENEURIAL ADVANCES BY UCCS




New 500-space $7 million Parking and Public Safety Structure, to open August, 2004
    OPPORTUNITIES FOR UCCS IN THE FUTURE
Improving the infrastructure on the campus through the use of authority in
S.B. 04-252 to build and renovate academic buildings.




             Interior of future UCCS Science/Engineering Building
OPPORTUNITIES FOR UCCS IN THE FUTURE

                     Increasing the proportion
                   of out-of-state students in
                   the student body can have
                   significant economic
                   advantages for the campus
                   and the community.
                    Ex: 100 more out of
                   state students = $1.4
                   million for UCCS and a
                   similar infusion of revenue
                   to the Colorado Springs
                   community.
    OPPORTUNITIES FOR UCCS IN THE FUTURE
 Developing a strong partnership and relationship with the recently
established University of Colorado Real Estate Foundation [CUREF] with the
land available on the campus to provide new opportunities and models for the
future.
   OPPORTUNITIES FOR UCCS IN THE FUTURE
Build new and renovate existing capital to position the
campus to grow

    Build Science/Engineering Complex $45 million
   total capital cost
    Renovate Dwire $10 million
    Renovate Science $5 million
    Build Recreation Center $9 - $15 million
    Heller Center improvements $2 - $4 million

     TOTAL = $71 - $79 million in additional economic
       spending with the construction industry.
   OPPORTUNITIES FOR UCCS IN THE FUTURE
Redevelopment on the North Nevada corridor would improve campus
climate and amenities on western border of the campus.
 Ratcheting Effect of TABOR
                                        The Ratchet Effect
           $12,000
                                                                    Population + CPI

           $10,000
                     TABOR Revenues Collected

            $8,000
Millions




                     TABOR Limit -- THE LINE
            $6,000

            $4,000
                             Refunds
            $2,000
                     $683     $939     $928                                           $442
                                               $0     $0     $0      $31      $339            $324    $336
               $0
                      1999


                                2000


                                        2001


                                               2002


                                                      2003


                                                             2004


                                                                       2005


                                                                               2006


                                                                                       2007


                                                                                               2008


                                                                                                       2009
 Source: The Bell Policy Center, based on numbers from December 2003
      Effect of Reduction of State Support and Needed Tuition
    Revenues at UCCS if NO TABOR/23 Reform using UCCS’ current
          share of State Support declining at same rate as other campuses

                   General Fund                    Tuition

$70,000,000
$60,000,000
$50,000,000
$40,000,000
$30,000,000
$20,000,000
$10,000,000
         $0
              2005 2006 2007 2008 2009 2010 2011
Achieving Enterprise Status
 Why enterprise status:
   Allow greater management and regulatory
    flexibility
   Ability to set tuition rates within
    legislatively prescribed limits
   Permit institutions to bond against tuition
    and fee revenue in order to address critical
    capital priorities when state funding is
    limited
College Opportunity Fund +
Enterprise Status =
Short Term Solution
  COF does not provide new state general
   fund revenue under TABOR
  Only option currently before us, but it will
   NOT solve the funding problem
  However, it will provide enterprise status
   for FY2005
  Moreover, we need to look at a long term
   solution to fund public higher ed
CU Guiding Principles for Reform
 Address reform without violating the single subject rule
    Eliminate TABOR refunds, for some period of time, and
     allocate the surplus
         1% of tax revenues into a rainy day fund
         Remainder to support K-12 and higher education
    Recalibrate the base year revenue growth calculations
     to 2000-2001 (last max. spending year)
    Allow state revenues grow to a less restrictive formula
    Eliminate TABOR ratchet permanently
    During an economic downturn, suspend some or all
     provisions of Amendment 23 other than enrollment
Reforms = Long Term Solution
to Public Higher Ed Funding
  Ballot initiative to reform TABOR and
   Amendment 23
    Allow the state to spend part of its tax
     revenues
  Will need approval by a vote of the
   people at November 2004 elections
How Would CU Attain Greater
Autonomy?
 Require legislation:
    Removing regulation and TABOR limitations
    Allowing us to own state-owned buildings
 Require substantial increase in non-state resources
    Ten-fold increase in endowment
    Increase in-state tuition two to three times to
     replace general fund and increased aid to hold low
     and mid-level income student harmless
 New strategic approach to assuage brain drain and
  sustain quality
We appreciate the genuine
support of the EDC and its
leadership team….

				
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