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 M C to Un is i n) Te s o ty C iv xa ur ol of i( le Un No s A St ge iv rth &M .L of (K oui Te Ca ro in s nn gs ) Un es lin vi se a( iv e Ch lle) of (C a M ha rlot Un ic tt te iv hi 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 us St a) to at n( e Un W Cl iv O ic ea ak hi rL Un la t ak iv nd a S e) of ta te UCCS vs. Peers in Funding Un Co Un iv Un lo iv (M iv ra ic d of Tuition & Fees N hi at ga Co ew n) 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 i of ns in I v. M -M of a ilw No CU ss. rth N -B . Y os Ca -C to ro i ty n lin a- co G lle W re en ge rig ht sb or St at o e O U Un ld ni v. State Appropriation iv Do FY 2004 .o G m fM eo in Fl rg io or ar e n id yl M a an At d as on la -B nt al ic ti m -B or W oc e ic a Un hi Ra iv ta to 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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