Good
morning, Chairman Johnson, Chairman Farrell, Chairman LaValle, Majority Leader
Canestrari…members of the Senate and Assembly…and legislative staff. It is a
privilege to come before you today as Chancellor of the State University of New York to comment
on the 2007-2008 Executive Budget recommendations for the State University.
Last
month I had the opportunity to testify before Mr. Canestrari and members of the
Assembly on the impact of the 2006-2007 State Budget on the State University
System. As I said then, I will repeat today….On behalf of the entire University, I would like to
thank Majority Leader Bruno, Speaker Silver, and the members of both the
Assembly and Senate and your staffs for your hard work and investment in the
State University this current fiscal year. Your investment in direct state
support and much-needed capital support is helping to provide the University
with the foundation to take a very good public University and make it great,
while maintaining our historic mission of access and affordability.
Before I
comment specifically on the Executive Budget Proposal, I would like to express
my gratitude to Governor Spitzer for his positive words in his campaign, in the
State of the State address and again in his budget address regarding the State University and the establishment of the Commission on Public Higher
Education in New York State. With planning and targeted investment, the State University will be a leader in New York State’s innovation economy and we look
forward to the Commission’s work.
Facts
and Figures about SUNY
The State University’s enrollment is at a record high of 418,000 students making
SUNY the largest, comprehensive system of public higher education in the
country. Over 81,900 minority students are now enrolled, accounting for almost
20 percent of the student population. The academic preparation of our SUNY students
continues to improve each year along with our market share of college-bound New York State high school graduates which is above 40%. It is also
important to note that, on average, each student who earns a baccalaureate
degree will earn nearly $1 million more over a lifetime than he or she would
with only a high school diploma – a fact that is critically important to New York State’s economic future.
Together, our campuses have secured almost $1 billion in direct
and competitive federal funding, creating an estimated 29,000 new jobs in the
state. Furthermore, the research contributions of our campuses, and the
advanced education and training provided by our graduate programs, creates
intellectual capital for the State of New York that adds to our competitiveness for new jobs and industries. This
past year, SUNY awarded 80,652 degrees and certificates, the highest number of
awards in the history of the State University. And, with 81% of SUNY’s graduates
staying in the state, these young men and women enrich the workforce and become
taxpaying citizens.
SUNY is also
focused on and has made great strides in raising non-state revenues; an absolute
necessity in today’s higher education arena. In 1991-92, these revenues have
grown by $4 billion, or 163%. Philanthropy has also become another key
component of SUNY external funding sources. In the past five years, our
presidents have raised over $1.78 billion and will surpass our goal of $3
billion well before our self-imposed deadline of 2012. Included are revenues from
royalties, which are expected to bring in $10.8 million. These funds help
guarantee access and improved quality for our students.
General
Overview
As we
address the budget request, I want first to speak to the SUNY planning process that
provided the platform for your investment in the University this current fiscal
year and we hope again in this next year.
Last year,
the University began a five-year budget planning process with SUNY’s 64 campuses
and their presidents. The effort continues and coincides with SUNY’s
nationally recognized Mission Review II process for institutional strategic
planning, including the establishment of quantifiable goals to be achieved
during the five-year period. This budget planning enabled the University to
develop a strategy for achieving our academic goals and for identifying our
fiscal needs. As a result, SUNY provided the Executive and Legislature with a
budget that is grounded in real needs targeted to the achievement of coherent,
system-wide goals. That planning gave you the confidence to invest an
additional $158 million in the SUNY’s state-operated and community college
campuses. Last year’s budget enabled the University to hire more full time
faculty, target areas for economic development and establish performance
initiatives…all of which will have a positive impact on New York’s citizens and economy in the years
to come.
The same process was used to craft the current budget
request.
I recently
sent the Members of the Legislature a book entitled, The State University of New York, Commitment to Excellence, The
2007-2008 Budget Request.
This book
is more than an outline of the State University’s budget request. It provides a
full overview of the University addressing issues of accessibility, affordability,
accountability and quality. It also focuses on the University’s efforts on
enhanced teaching and learning, research, economic development, efficiency,
external funding, and public policy development.
I believe
that Commitment to Excellence is a good reference, not only for budget discussions,
but also for the conversation on how to enhance public higher education in New York State through the Governor’s Commission on Public Higher
Education. I hope that the Commission will undertake a deep study that results
in a realistic roadmap for how we – the people of New York – can achieve excellence in higher
education while maintaining accessibility and affordability.
The
Executive Budget
Governor
Spitzer’s 2007-08 Executive Budget Proposal provides the State University with financial stability for the upcoming fiscal year. It
covers the University’s mandatory, base-level costs including contractual
agreements for faculty, employees and students, energy costs and general
non-personal service inflationary costs. It continues the Empire Innovation
Program and provides an increase in the program’s funding for new research
faculty, but significantly less than requested by the University. It provides
an additional $2.3 million to the Educational Opportunity Centers for the
expansion of access. It provides a small operating subsidy increase for our
three hospitals. It invests capital funds in our physical infrastructure for
critical maintenance, renovations and new construction. And it provides this
funding while avoiding a tuition increase at all program levels at our
state-operated campuses. For community colleges the Executive Budget funds the
ever-growing enrollment and provides additional aid for their students and
facilities.
In his budget proposal, Governor Spitzer has provided the
strongest Executive Budget commitment to higher education in over a decade. While
one might look at this budget and think the University is in good financial
shape going into budget negotiations, we hope this is only the beginning of the
discussion. If we are to make your very good State University into a great university….the University
needs targeted funding for the strategic initiatives in SUNY’s 2007-08 budget
request.
Unmet
needs - The 2007-08 University Budget Request
The State
University 2007-08 budget request asked for $116 million in base costs, including
$19.2 million for the second phase of Empire Innovation, and an additional $123
million in new initiatives to achieve a higher level of excellence. As we look
forward, we must keep public higher education student-focused and
student-centered. As our (your) institutions prepare these young men and women
for entry into today’s knowledge based economy, it is critically important that
the University have the resources to help meet the societal needs not just of today
but of the next century, and that we stimulate economic development to provide
attractive jobs to continue to retain our students in New York State following
graduation.
The State University’s budget request positions the University to continue the
efforts you began last year. It will build on the successes and the
University’s five-year plans for enhancing academic quality, while remaining
accessible and affordable.
We cannot
stress enough that accessibility and affordability to a quality education are
the keys to the future of higher education in New York State, and indeed, the future of New York State. With additional financial resources, SUNY can continue to
offer all New Yorkers the gateway to success.
With these
goals in mind, the State University respectfully asks you to consider the following items which
were requested but unmet in the Executive Budget Proposal:
Access to
an Affordable and Attainable Education ($35 million)
Recognizing Enrollment - Meeting enrollment demand is
central to SUNY’s mission to “provide educational services of the highest
quality, with the broadest possible access”. Last year University enrollment grew by almost 6,000 students, with 5,449 more
fulltime students enrolled at our state-operated campuses. Next year, the
University’s enrollment is planned to increase by another 5,600 students.
SUNY’s growth in enrollment reflects our high market share of NYS college-bound
high school students as well as dramatic increases in retention rates due to
enhanced academic performance across the University. In short, not only are
more New Yorkers choosing SUNY, an ever increasing number remain to complete
their studies. We are seeking funds to support students already in the
University as well as those who’d like to enroll next year. Because our
tuition covers only about half of the cost of educating each new student, the State University relies on state support to cover the remainder of the
cost. Unlike the community college sector where campuses are funded on a
per-capita basis, the University’s state-operated campuses rely on annual
budget increases to support enrollment growth…so, level funding year-to-year
translates into cuts in services and reduced academic quality as enrollment
increases.
A comparison of peer institutions shows that New York spends
$7,645 on instructional expenditures per full time equivalent student, while
the University of California spends $14,692, the University of Illinois $9,531,
the University of North Carolina $11,660 and the University of Texas System
$13,510. We need to fund SUNY comparatively in order to compete in the top
ranks of public higher education.
Expanding Opportunity – A
review of the demographics of New York State reveals an increase in the social,
economic and cultural diversity of the state, with particular growth in the
Latino and Hispanic populations. U.S. Census Bureau statistics indicate that
New York States demographics will shift towards a majority – minority
population in the near future. This forecast needs to shape our thinking and
planning. We therefore seek funding to expand opportunities and programs for New York’s low-income, first generation and
multi-cultural students. In this connection, we will build on our existing
programs and also establish a new Office of Diversity and Educational Equity to
focus university efforts to provide access, opportunity and support services for
the underserved students of all ethnic origin.
High Needs
Programs ($8.2 million)
The Governor’s budget has stressed the importance of a major
reform in K-12 education in the State of New York. It further promises universal access to pre-K education for all of
our citizens. In order to meet this important goal, the state desperately needs
to train new teachers, particularly in the pre-K area, and also in science,
technology and mathematics disciplines. The university needs to add faculty
positions as well as provide resources for alternative certification to meet this
high priority goal.
New York State also has a severe shortage of
graduates in engineering, information technology, nursing and allied health
areas. Workers in all these fields are in high demand by the state’s business
community, but they are among the most expensive to educate. With last year’s
funding, our state-operated campuses provided support for 200 more engineering
and information technology students and have added 14 new faculty. These
campuses also supported 500 students and 29 new faculty in the nursing and
allied health programs. Our community colleges provided additional support for
over 24,000 students in these same disciplines. SUNY is poised to directly
assist local New York businesses and is seeking an
additional $8.2 million to continue the expansion of these programs at our state-operated
campuses and community colleges.
Empire
Innovation Program ($13.2 million)
The University’s budget request sought an additional $19.2
million for Empire Innovation, for year two of a three year roll-out plan. The
Executive provided the $6 million base funding carried forward from last year
and added another $6 million. We respectfully request the balance of our
request - $13.2 million. SUNY invests $2,454 per FTE for research, yet we are
in the bottom of the pack of public higher education. The University of California ($14,210), Texas ($8,173),
Maryland ($5,990), Illinois ($8,691), and others are all ahead
of SUNY. California’s investment is nearly six times that
of New York.
Data from the National Science Foundation show that SUNY
researchers attract $440 million in federal research annually. By itself, this
sum seems impressive. When compared to other states' public university
systems, it is clear that SUNY lags behind her public peers. For example, the University of Texas System attracts more than twice as much federal research – more
than $940 million. The University of California System attracts $2.1 billion dollars per year, which is
five times more than SUNY. In fact, two of the UC systems campuses, UCLA at
$461 million and UC San Diego at $465 million, attract more federal research
dollars than SUNY does as a whole. Given that every $1 million in research
creates 29 jobs, just think of how much more impactful SUNY would be to the
state’s economy if we attained these levels of research.
The Empire Innovation Program is the key to a strong state
economy. We need to build on your initial investment. This program adds
cutting-edge intellectual talent to the research campuses, providing the basis
for even more innovation and even more competitive professional and graduate
education. The program is a targeted, results-oriented plan for boosting
economic development across New York State, through increased research at
SUNY’s university centers and doctoral campuses. Last year’s funding enabled
us to hire and recruit some 33 new research faculty with extraordinary
promise. The additional $19.2 million in new funding will enable the
University to add another 133 research faculty to our ranks. I would like to
point out two examples of the type of recruitment occurring across the doctoral
sector of SUNY:
·
Dr. Hao Wang at Binghamton University’s Small Scale Systems Integration and Packaging Center of
Excellence. Dr. Wang was recruited from the Michigan Technological University; is a graduate of the University of Pennsylvania and holds a Career Award from the
National Science Foundation and over $4 million in NSF grants. He already has
a company established at the Binghamton University Incubator.
·
Dr. Lorna Role,
Ph.D., Harvard, was recruited from an Ivy League institution to head the Stony
Brook program in neurosciences and behavior. She holds numerous grants and
awards. Her research focuses on central cholinergic systems that have been
implicated in disorders of memory, mood and motivation, and her work has
implications for studies of schizophrenia, depression and Alzheimer’s dementia.
This program’s return on investment is tremendous. Salaries
for the new faculty hired are returned many fold in federal research contracts
and grants. Our researchers average over $452,000 annually in external grant
funding, well beyond the anticipated $300,000. If this trend continues, the
out-year economic impact of the Empire Innovation Program could be even greater
than the $1 billion projected by 2011.
One nuance of the program that needs attention is the statutory
requirement that the 2006-07 Empire Innovation funding be distributed by a
formula based on current federal sponsored research award levels. I recommend that,
as this program funding continues, the Legislature consider allowing the
University discretion to invest in projects that are the most competitive and
promise the largest return on investment across the state. The Executive Budget
provides this discretion.
Finally, this program is also related to the request for $50
million in capital funding for equipment. Each new faculty member requires a
significant “start-up” investment in modern equipment so that he/she can
compete immediately for external grant funding. Last year we did not receive
any funding for equipment to support the new research faculty. It is
imperative that equipment funding be fully considered with the continuation of
this program.
Academic
Performance and Innovation ($5 million)
Student Tracking – Last week in his Education Policy speech,
Governor Spitzer spoke about a value-added assessment system that tracks the
individual performance of all K-12 students to aid in their educational progress.
The State University is proposing a similar program modeled after a University of Florida system that provides high quality and timely academic
advisement to increase students’ progress toward degree completion. Such an on-line
degree tracking program will facilitate more timely degree completion by
providing students and academic advisors with real time degree audits. It
would focus on course selection and sequencing with respect to degree
completion taking into account the impact of changing majors, which is a
frequent occurrence on college campuses. At the University of Florida, this program has resulted in a
seven percent increase in the graduation rate and vastly improved student
satisfaction with registration and advising.
Course Redesign – Persistence or retention through the first
year of college strongly correlates with degree completion. Too many new
students fall behind because they have difficulty mastering the material in
large lecture classrooms. Student performance can be enhanced by course
redesign that, at the same time, reduces the overall costs of instruction. By
using technology and course redesign to improve large lecture introductory
courses in mathematics, science, technology and social sciences, student
learning and retention can be dramatically improved. For example, as a pilot
project, the faculty at the University at Buffalo redesigned their computer literacy course, which typically enrolls
1,000 students per year, resulting in a higher percentage of students
successfully completing the course, with better grades, while achieving a
reduction in cost from $248 per student to $143 per student. With support in the
2007-08 state budget, SUNY will initiate a series of innovative system-wide
course redesign efforts to improve student satisfaction and success, and more
effectively use existing resources.
Assessment – SUNY is playing a leadership role in advancing
the assessment movement in higher education. Rigorous assessment policies and
procedures are already in place for campuses’ curricular programs. This
achievement has been acknowledged nationally, as illustrated in February 2006
when SUNY’s assessment efforts were featured in the publication Assessment
Update, where they were cited as possessing “all the characteristics of effective
outcomes assessment.” Support from the State would be used to make the most
recent component of SUNY’s assessment program – Strengthened Campus-Based
Assessment – even more robust. Under this program, campuses evaluate student
outcomes in mathematics, writing and critical thinking. In addition, campuses
evaluate their students’ academic engagement. Enhancing SUNY’s Strengthened
Campus-Based Assessment program will provide campuses with more comprehensive
feedback that faculty and staff can use to improve student engagement, learning
and, ultimately, retention and time-to-degree.
Margin of
Excellence ($14 million)
Strategic Investment in Graduate Excellence - In order for
SUNY to rank among preeminent research universities, it must compete for the most
promising graduate students (teaching assistants). These students will be
nothing less than the future of innovation in the state. By attracting such
students, SUNY is able to attract and retain the best faculty, increase
research expenditures and achieve nationally recognized graduate programs. Top-tier
research universities attract the strongest graduate students by offering
strong and competitive financial packages. Currently we are not able to
compete in these terms. SUNY needs additional support to increase its doctoral
stipends. The average stipends at SUNY’s research centers are roughly $3,000 (30%)
lower than awards at the top doctoral universities, and the disparity is
greater in exactly the areas where SUNY needs to compete most in order to fuel
the state’s economy in science and engineering.
Advanced Undergraduate Research Initiative - The best and
brightest undergraduate students seek to conduct research in their chosen
fields of study as it enhances their chances of admission to prestigious
graduate programs. SUNY seeks to expand available opportunities for
undergraduate research and offer specialized academic programs that foster
success in research.
SUNY Press - SUNY Press is the second largest university
press in the nation, with an annual output of around 180 books and a backlist
of more than 3,900 titles. The Press has achieved national recognition in the
areas of education, philosophy, religion, Jewish studies, Asian studies,
political science and sociology, with increasing growth in the areas of
literature, film studies, communication, women’s studies and environmental
studies. The University seeks additional State support to ensure that SUNY
Press continues its national leadership in academic publishing.
Hospitals
($22 million)
Although not in the specific context of the budget, a main
concern of the University is the implementation of the Berger Commission
recommendations. We find the goals of Berger laudable…providing efficiency and
cost containment of health care in the state…however, the Berger recommendations
as they affect the University are cause for concern. Specifically, we are
concerned about the proposed merger of Upstate Medical University and Crouse Hospital into a non-SUNY entity. This does not make sense as you
would be merging a financially stable Academic Health Center into a financially troubled private hospital; a hospital
that was in bankruptcy just five years ago. The two institutions tried a consolidation
at that time, but the talks fell apart due to the opposition of the union representing
Crouse’s employees.
SUNY has a plan that substantially complies with the
findings of the Berger Commission. We presented the plan to the Governor’s
advisors and the Department of Health yesterday. Our plan would merge the two
institutions as a SUNY entity, saving the state hundreds of millions of dollars
while resulting in better health care services for the people of Central New York. Our financial analysis indicates that
merging the two hospitals as a private entity would cost a minimum of $700
million to upwards of $866 million. Merging the two entities as a SUNY entity
would require the retirement of the debt of Crouse Hospital. Crouse’s debt is approximately $90
-100 million. There would be some union wage costs and other minimal
expenditures, as well as recommended capital improvements at Crouse. Overall,
a public, SUNY entity, merger would be more cost effective and strategic.
Two items that must be considered: (1)
cost savings in the short and long term, and (2) the continuation of the public
health mission of Upstate Medical University which, like all SUNY hospitals, serve
the citizens of this state who cannot afford health care on their own.
Privatizing Upstate, or any SUNY hospital, would change that.
To ensure that the three SUNY’s
teaching hospitals – SUNY Downstate Medical Center, Stony Brook University Hospital and Upstate Medical University – continue to provide essential
medical care to their regions and cutting edge health care research, the
University requests a $22 million increase in the operating subsidy above the
Executive Budget Proposal, which added $7 million. The subsidy is calculated
to recognize the incremental costs that the hospitals incur by virtue of their
being public entities versus other comparable non-public hospitals, and is
based on the true costs of payroll.
Geographic
Adjustment ($10 million)
A study commissioned for the budget allocation process (BAP)
model implemented in 1998-99 concluded that the costs associated with operating
SUNY campuses in the Long
Island and New York City metropolitan areas were up to 26%
greater than the SUNY average. Updated regional cost of living statistics
appear to indicate that the cost differential in these downstate regions is now
even greater, approaching nearly 50% in certain areas. Fully funding this
differential would require $30 million. The University proposes achieving this
level of additional funding over a 3-year period. Accordingly, SUNY requests
$10 million in 2007-08.
Community
Colleges ($13.2 million)
The University’s 30 community colleges provide open access
to educational programs and services offered to the entire population and
geographical areas of New
York State. Their broad mission includes
providing career education and degree programs, as well as customized
non-credit programs that service a variety of individual, community and
business needs. These colleges are increasingly the first choice colleges for New York State citizens, including traditional high school graduates as
well as non-traditional adult students.
The Executive Budget Proposal provided full funding for
current year enrollment, a $100 base aid increase per full time equivalent
student and funding for facility rental charges. The needs of this sector go
beyond that funding level and the University respectfully requests:
·
$11.3 million for
additional base operating aid to move the state towards the traditional
one-third state share of community college operating costs
·
$1.9 million to
assist community colleges with low enrollment (under 2,000 FTE)
Capital
Facilities
Since 2003, the State has provided the University with over
$4.2 billion in multi-year funding support for improvements to academic,
hospital and residential facilities throughout the SUNY system. This level of
investment is due in large part to the overall age of our facilities. On
average, most of the University’s buildings were constructed more than 40 years
ago. This fact, combined with the normal wear and tear of high volume
utilization, drives a corresponding need for periodic upgrades and renewal
across the sizeable network of SUNY facilities operating statewide.
And much progress has been made with the funding commitments
provided thus far.
For example, for our 34 State-operated campuses alone, we
now have 432 projects currently in construction, and an additional 242 projects
underway in the design phase, for a grand total of $1.82 billion in active
hospital and educational facility capital improvement projects. Further
details on these projects, and on the timing and amounts of the many additional
projects planned for implementation under the existing multi-year capital
plans, are included in the University’s annual Master Capital Plan. This report
is an essential planning tool for a majority of SUNY capital project activities
and is provided each year to the members of Legislature and Executive as our
active partners in these important endeavors.
And as you know, SUNY’s vast facility infrastructure
requires a long-term program of sustained capital improvements to remain both
current and viable. SUNY facilities represent about a third of all
State-owned assets, exclusive of roads and bridges, and the estimated
replacement value of State-operated academic and research facilities alone
exceeds $20 billion.
Recently, the University concluded some preliminary
benchmarking efforts on capital funding needs nationwide based on replacement
values. A majority of findings thus far applied to SUNY show an ongoing
annual capital funding need of between 2.65 and 3.45% of replacement value, or
some $540 to $700 million dedicated exclusively to maintaining existing
facilities.
For this reason, the University welcomes the Executive
Budget proposal announced in this year’s budget to establish by next year a
comprehensive new set of five-year capital financing plans for the University’s
capital programs, including Community Colleges, and State-operated educational,
residence hall and hospital facilities.
So I can enthusiastically commit to you now the University’s
best efforts to develop carefully considered plans for multi-year capital
improvements that live up to the important stewardship responsibilities we
collectively share.
I also want to express appreciation for the additional $380
million in State funding included in the Executive Budget for academic
facilities to assist in the transition from one multi-year capital plan to the
next.
This recommendation targets the most immediate needs of the
system, including continued investments in critical maintenance projects
essential to preserving existing facility assets, and ensuring that funding
levels are sufficient to complete all high priority projects currently
underway.
I look forward to working with Governor Spitzer and the
Legislature to consider funding essential, additional, affordable capital
investments. Most notable are $31.9 million of high priority community college
projects which have already received the local sponsor’s 50% funding commitment
and $142.7 million of self-funded strategic capital initiatives for SUNY’s
three hospitals, and $50M for Capital Equipment targeted towards the Empire
Innovation Initiative. We also look forward to discussing additional
educational facility capital investments which may be affordable within
existing budget constraints.
Other
Issues
There are
two other issues the University would bring to your attention:
Workforce
and the Innovation Economy
Workforce
training is an area familiar to all SUNY campuses, but especially our Community
Colleges and Colleges of Technology, and through the state's Small
Business Development Centers which are administered by SUNY. The
University is appreciative of the ongoing support provided in the Executive
Budget for our Small Business Development Centers. These 23 campus-based
outreach offices, located on SUNY, CUNY and private campuses,
are nationally recognized leaders in entrepreneurial and small business
assistance efforts. Since 1984, the SBDC has administered over $3 billion
in public and private funds, worked directly with over 250,000 businesses
statewide and created and helped retain some 118,000 jobs. But state
support for the SBDC has not received any measurable increase in 10
years and lags far behind other states. Today the University’s SBDC state
support is 28% of neighboring Pennsylvania.
Given the need for economic development through entrepreneurism and small to
medium-sized business growth, our SBDC would be an excellent choice for
expanded program responsibility and commitment.
ATTAIN
We are also
concerned that the Executive Budget recommends the elimination of ATTAIN
(Advanced Technology Training and Information Networking), a university program
designed to create digital parity and inclusion in some of our most
disadvantaged urban and rural communities. To date, the 31 ATTAIN labs
have provided free broad band access and workforce preparation to over 9,000
economically disadvantaged New Yorkers. Collectively, they have used the
labs for some 1.5 million hours to access the web for research, communications,
job search and education and training. We request that the annual funding
of $8.5 million be restored.
Conclusion
During his
candidacy, Governor Spitzer stated, “We are going to build the SUNY system into
the best public university system in the nation. That is our future, that is
our economy, and that is how we will build New York”. As Chancellor, I could not agree more. As
international competition begins to impact every corner of our state, and as intellectual
capital becomes increasingly the magnet for economic development, public higher
education becomes ever more important. SUNY is an integral part of the state
and the state’s economy. Throughout each and every county in the state the
University is able to play a role in a strong and successful economic future.
Last year
we began to chart a course to make the Governor’s statement a reality. I urge you
to continue the work you began. There is nothing more important to our future
than providing the proper foundation to the young men and women who will lead New York State into the knowledge based economy and beyond.
Thank you
for this opportunity. I would be pleased to answer any questions you may have.
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