Senate Ways and Means Committee's Subcommittee on Higher Education
Thursday, March 7, 2002
Room 123-S, State Capitol
Testimony by Robert Hemenway, chancellor, the University of Kansas

Thank you, Mr. Chairman. My remarks today will be brief. I am joined by executive vice chancellors Donald Hagen and Janet Murguia. Feel free to direct questions to any of us for a response.

It's my privilege to speak on behalf of the University of Kansas, a state university whose reputation has never been stronger -- nationally or regionally -- in four major categories.

Students: The quality of our student body, as measured by freshman test scores, is increasing every year. For the past three years, we have ranked among the top 10 public universities in the country in the number of freshman National Merit Scholars we enroll. In addition, we've enrolled the second- and third-largest freshman classes in our history the past two years.

Faculty research: The amount of funded research we carry out has more than doubled in the past decade, reaching $224 million in fiscal year 2001. That amount is only slightly less than this year's $243 million state appropriation. We now rank 51st among all public universities in the amount of federal grants received for science and engineering research.

Teaching: Excellent teaching is one outcome of achievement in research. At KU, students are frequently taught by the professor who wrote the textbook, rather than the professor who merely read the textbook. That's a major difference, in terms of the impact on students.

Service to the state: KU remains the state's principal source of continuing education for local law enforcement officers, firefighters and wastewater treatment workers. Our Kansas Audio-Reader Network provides daily news services to the blind and visually impaired statewide. The Robert J. Dole Institute of Politics (now under construction) promises to be a national focal point for timely discussion and research on a host of major public affairs issues.

(And you may be aware that our men's basketball team is doing rather well!)

Clearly, by many important measures, KU is stronger than it's ever been. But in other ways, it has seldom been more vulnerable. Why do I say that?

Here's a case in point: As things now stand, KU faces a budget shortfall in the coming year of $15.4 million. That's a 6.4 percent reduction in funding, the largest one-year reduction ever proposed for the University of Kansas.

There are two parts to that 6.4 percent cut: the previously announced $9.6 million (3.94 percent) base reduction and a less visible -- but no less damaging -- $5.8 million (2.4 percent) obligation to pay unavoidable, fixed employer costs, such as the annualization of current-year salary increases and increased health insurance premiums.

These costs, which were funded in the budgets of all state agencies other than the regents universities, won't go away simply because the state chooses to ignore them. They will have to be met by someone in some fashion.

Here's the bottom line: To maintain our current level of services in fiscal year 2003, the university would require $15.4 million in state funding. That would erase the 3.94 percent base reduction and pay those fixed employer costs.

If the legislature does nothing to resolve this shortfall, however, KU will take a budget cut of historic proportions during fiscal year 2003, and it's a bigger cut than most other state agencies are being required to absorb. We urge you to address the $15.4 million shortfall so that we can at least maintain our current level of services during fiscal year 2003.

(Most Kansans would support maintaining the current level of services, according to a recent statewide poll conducted by the Policy Research Institute. When asked their preferences for state spending on state colleges and universities, 52 percent of those surveyed favored keeping it at the present level, while another 38 percent favored increased spending. Fewer than 6 percent supported decreased spending.)

So we are not asking the state for a major new investment this year. But we should all ask ourselves what permanent harm a 6.4 percent budget cut would inflict on KU -- a university whose research work, faculty expertise, skilled graduates and national reputation make it a vital -- but fragile -- resource for the state in terms of intellectual capital and economic development.

At KU, we have experience in tightening our belts. For example, when we construct a needed new building, it costs additional money to provide that building with utilities, custodial services and other basic operating expenses. Yet the last time we received state funding for this purpose was in fiscal year 2000.

The newly renovated School of Education building, for instance, Pearson Hall, opened in August 2000. Since fiscal year 2001, we have asked the state without success for funding to cover its annual operating costs of about $310,000. That's a very real form of belt tightening.

What concerns me is that there seems to be a pattern of underfunding here. Currently, state appropriations per student in the state of Kansas ranks sixth among the seven Big 12 Conference states. Iowa, for example, has provided 50 percent more state money per student than Kansas.

Or consider the level of state appropriations per student at KU specifically. Adjusted for inflation, it has declined over the past 15 years. In fiscal year 2000, state support for our students was worth $667 less than it was in fiscal year 1985. It has since dropped by another $200 and would drop by another $400 in fiscal year 2003 under the existing budget proposal.

The brunt of these shortfalls has been borne by the university, its faculty and staff, and its students. Given these circumstances, it's remarkable that the University of Kansas continues to achieve at the level it does.

We cannot sustain that level, however, with "chewing gum and baling wire." Inevitably, the quality of a KU education is going to suffer if this pattern of underfunding continues. We've run out of chewing gum and baling wire.

A recent series of articles in a Phoenix newspaper about Arizona's budget crisis put this issue in its proper perspective. According to a growing number of state leaders there, Arizona "is committing slow economic suicide by underfunding its universities in the face of fierce competition from other states for the workers and revenues of today's knowledge economy." The same can be said of Kansas.

Toward that end, we continue to urge this legislature to fully fund the Board of Regents' proposed 4.5 percent operating grant increase, as well as the third year of the commitment made to our faculty under SB 345.

But enough of the present. What about the future? KU, along with Kansas State University and Wichita State University, seeks bonding authority for a major research building initiative on our campuses. The KU Medical Center portion of the project already has a $27 million private commitment of funding from the Hall Family Foundation. These projects are essential if the state and its three largest universities are to fully realize their potential as sources of economic development and service for our state and nation.

I cannot stress strongly enough the importance of research facilities in retaining good faculty. In the past month, the KU Medical Center has lost two of its most distinguished and well-funded research scientists (i.e., Billy Hudson and S.K. Dey) because they did not have the equipment and facilities they needed to take their research to the next level.

We cannot continue to suffer these kinds of losses. Students lose, patients lose, and Kansas loses when such faculty leave because of better facilities elsewhere.

Approval of the research initiative during this session is vital, as are the budget restorations I've already touched on. But I would point out that the required bonding authority for those projects involves no state funding during fiscal year 2003. It is not a question of whether you should restore budget cuts or pass the research initiative: We need both.

Failure to authorize the research initiative would be an irretrievably lost opportunity for Kansas. The economic effects would reverberate to every corner of our state.

Failure to address the $15.4 million shortfall would have more immediate consequences, including layoffs of existing staff, fewer and more crowded classes, the elimination or severe reduction of basic services for students and the public, and the shutting down of some academic and outreach programs.

It would also mean our students and faculty will use computer equipment that's out of date, our ability to support economic development activities will be limited, and the overall quality of a KU education will decline for current and future students.

Specifically, at Lawrence we anticipate meeting $9.5 million in budget cuts by leaving unfilled, or eliminating, as many as 175 faculty and staff positions. We would also cut departmental operating budgets and the operating hours of certain museums and public service units.

At the KU Medical Center, we have already sought permission from the state to begin a reduction in force this summer for classified employees. It's only a precautionary measure, but a $6 million budget reduction there will likely require:
 • elimination of as many as 90 classified and unclassified staff positions;
 • including the elimination or reduction in state support for about 20 faculty positions (about 5 percent of the total);
 • phasing out of the physical therapy program conducted at Pittsburg State University via distance education;
 • elimination of the nursing program in neo-natal care; and
 • possible cutting back of outreach efforts statewide, including a program that supplies temporary replacement doctors to rural communities.

Last month, the editor of the Iola Register wrote about these issues more clearly than I can, and I want to share them with you in closing. In an editorial, he said:

"What a tragedy it will be if Kansas lawmakers can't see beyond one year's recession-induced shortfall and focus instead on how vital excellent universities are to the progress of Kansas and to the future of Kansas students.

"The money invested in them every year pays dividends immediately and from that point forward. And if they are allowed to reverse course and head downhill, it will take years to repair the damage and regain forward momentum."

I know you and your colleagues face many difficult challenges this spring as you act on the state's budget. We at the university are public servants and we will do our best. But we would be liars if we told you there would be no ill effects.

As you proceed, I hope you'll remember that this is a budget not only for this year but for many years -- and many lives -- to come.

If we don't find a way to support higher education adequately in Kansas, our fate may be the "slow economic suicide" I spoke of a moment ago. I hope you will not let that happen.

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