Budget 2010

January 21, 2009

Remarks to the Higher Education Subcommittee
of the House Ways & Means Committee
January 21, 2009

Chairman Limehouse
Representative Neilson
Representative Merrill
Representative Barfield – and let me welcome you to the higher education subcommittee
Ms. Ford-Jennings

I appreciate the opportunity to be here today, representing the faculty, staff and students of Clemson University.

We are all painfully aware of the financial crisis facing South Carolina. I, like everyone else who is fortunate enough to work at Clemson, am taking a mandatory five-day furlough this year. Every time I walk by our library, I am reminded that we have halted construction of much-needed facilities. Last week we announced an early retirement program that will probably cost us some of our most experienced faculty and staff.

Against such a backdrop, it would be futile for me to spend this time discussing our funding requests. They are in your handouts. We share them because we want you to be aware of our priorities and our plans for the future.

Instead, I want to talk about the impact that Clemson is having on the state and the progress we have made over the past few years — and then share some thoughts about how we can work together to continue the momentum even in this economic climate.

Clemson has achieved its highest national ranking ever — #22 among all the 164 public national universities, according to US News and World Report. Our areas of improvement reflect our commitment to students and quality in the classroom — we have improved in class size, student-to-faculty ratio, retention rates and graduation rates.

But quality is only part of the story. We’ve also been recognized for value and affordability. Kiplinger’s ranks Clemson 34th nationally — #1 in South Carolina – among public institutions that provide the best education for the dollar. “SmartMoney” ranked Clemson 8th among public and private universities in “payback” — which is the ratio of graduates’ earnings to tuition paid.

What do our students say about Clemson? According to “The Princeton Review,” which bases a large portion of its rankings on student surveys, we have the happiest students in the country. If you want a more scientific analysis, we score well above our peers on the National Survey on Student Engagement. More than 90 percent of seniors would choose Clemson again if they could start over — compared to a peer average of 79 percent.

Faculty surveys have led to Clemson being ranked the #1 place to work in academia by “The Scientist” magazine and a top place to work for faculty involvement in governance by “The Chronicle of Higher Education.”

A team of researchers from the University of Maryland and the University of Wisconsin conducted a national study of living-learning communities and rated Clemson’s living-learning communities among the nation’s best.

In her new book, “The College Solution: A Guide for Everyone Looking for the Right School at the Right Price,” financial writer Lynn O’Shaughnessy profiled Clemson’s Creative Inquiry program as a best practice in undergraduate research. She wrote: “Unfortunately, the experiences that Clemson students enjoy are not nearly common enough.”

We have achieved these successes despite being at a significant disadvantage when it comes to state support.

Based on nationally published data for 2007, which was a GOOD year compared to today:

  • We ranked 38th overall in per student operating funding for higher education — behind Mississippi, Arkansas and Louisiana
  • Georgia ranked 9th
  • North Carolina ranked 11th
  • Tennessee ranked 14th

If we look at current-year numbers, our educational appropriations per student is approximately:

  • 30% of Georgia Tech
  • 25% of UNC Chapel Hill
  • Less than 50% of NC State

In addition to not being competitive with neighboring states in operating funding, South Carolina is also behind in providing critical capital and infrastructure support for higher education.

  • In the past decade South Carolina has invested roughly $250 Million in capital and infrastructure funding for its four-year campus facilities.
  • Over this same period Georgia has invested $2 BILLION
  • Over this same period North Carolina has invested $5 BILLION

We ask the General Assembly to consider a capital bond bill not in terms of increasing indebtedness but in terms of economic stimulus.

In looking at Clemson's cost structure it is instructive to look at two good schools that we compete directly with in Georgia and North Carolina. Both of these schools are ranked nationally, and ahead of Clemson. Clemson spends less than half of what the University of North Carolina spends per student. Clemson's administrative costs (institutional support) are more than 40 percent less than administrative costs at UNC. In operation and maintenance Clemson spends 60 percent less than UNC. In comparison to Georgia Tech, Clemson spends roughly 15 percent less than Georgia Tech per student. Clemson's administrative costs are 23 percent less than Georgia Tech's. In support of facilities operation and maintenance Clemson spends 60 percent less than Georgia Tech.

Let me point out that these states are the competition not just for faculty, students and research funding. They are also the competition when it comes to recruiting new industries. There is a direct correlation between investment in higher education and economic development. It should not surprise us that South Carolina’s per capita personal income ranks 47th in the nation, ahead of only Arkansas, West Virginia, and Mississippi.

There is one area where we rank #1 in the nation — in cuts to higher education since last year. And we are way ahead of the state ranked #2 — Alabama. For the first time, college presidents and legislators in Mississippi, Louisiana, Alabama and Arkansas are saying, “Thank goodness for South Carolina.”

Clemson has succeeded because we have a clear vision, a strategic plan, and focused areas of emphasis. Our plan, which we call the Road Map, is not a dusty document on a shelf. It has driven decisions, curriculum changes, and faculty hires. We have earned national recognition for our commitment to planning and focus, as you see from the article in your packets. It is rare for “The Chronicle of Higher Education” to devote its front page to an in-depth feature on one university. It is even more rare for the article to be 100 percent positive.

Now we are at a crossroads: We have a plan, momentum, a record number of applications, and new economic development initiatives moving from start-up to sustainability. But budget cuts threaten to not just stall momentum but actually reverse these gains.

On the surface, all of these facts seem contradictory. How can a state that has historically funded less and cut more boast a nationally ranked university? How can a university with such modest resources attract top students and faculty, provide a nationally recognized living and learning environment, and deliver knowledge-based jobs for the state? And, most importantly, how can we hope to maintain momentum in the current economic climate?

I’d like to answer those questions, one at a time.

Question 1: How has South Carolina managed to yield a nationally ranked university? You can take a lot of the credit.

You created the LIFE Scholarship program, which has encouraged more of our best and brightest high school graduates to stay in state. Clemson has benefitted because we are the Number One choice of LIFE Scholars and Palmetto Fellows.

You supported the Clemson Road Map, which funded faculty hires, start-up packages and graduate assistantships. This allowed us to recruit world-class teachers and researchers, and grow graduate programs that are the foundation for a knowledge-based economy. We have nearly doubled Ph.D. enrollment since 2001.

You also supported institutional authority to set tuition and fees, which allowed us to offset budget cuts and fund core academic programs, the library and information technology. It also allowed us to create new student support programs such as the Academic Success Center, which has helped increase graduation rates and scholarship retention, both of which save families thousands of dollars.

Question two: How has Clemson managed to deliver jobs and economic development for S.C. with such modest resources? Again, you can take much of the credit.

Innovative legislative initiatives such as the Research University Infrastructure Bond Act, Innovations Centers Act and the Economic Development Bond Act, investments in the endowed chairs program, and special appropriations for initiatives such as CU-ICAR and Advanced Materials have paid off.

A comprehensive study of the endowed chairs program by the Washington Group was just released last week, and it shows that the program has created or attracted 2,000 jobs and boosted the state’s economy by $246 million. That’s a pretty good return on the $45 million that has been approved so far for endowed chairs.

At Clemson, we have gone from zero spinoff companies in 2001 to seven in the past two years. American Titanium Works would not be bringing its Tech Center to Greenville if not for CU-ICAR. We are creating good, high-paying jobs for South Carolina residents.

Question 3. In the current economic climate, how can we hope to maintain momentum? Once again, your leadership can make the difference. You can enact regulatory reforms that will allow us to be more competitive, efficient and entrepreneurial.

There are many state regulations that increase costs and reduce productivity, without improving accountability. We wholeheartedly support regulations that protect public interest and provide accountability for use of public resources. Clemson has been a national leader in the development of voluntary assessment systems for higher education. We hand out a report card at every Board of Trustees meeting to account for progress, or the lack of it, on goals — and we post those reports on our Web site. But in this economic climate, we cannot afford bureaucracy that adds cost but not value. Please don’t take our funds and tie our hands.

In the area of human resources, for example, we need more latitude in hiring regardless of the source of funds. We need to speed the processes involved in capital facilities projects, where delays can literally increase costs by millions of dollars. We need flexibility in purchasing so that we can maximize scarce operating funds.

I’ll close by returning to the subject of budget cuts. Since June, Clemson’s state appropriation has been cut by more than $38 million. Our current appropriation for education is about what it was in 1996. The Governor’s budget would take us back to 1990. These figures do not account for the cost of inflation or the increased number of South Carolina students we are graduating.

Adjusted for inflation, our current per-student support for education is 40 percent less than it was in 1973, and 45 percent less than it was in 1974. Our records do not indicate a time when support was this low.

We have taken extraordinary steps to balance the budget for this fiscal year, and we are now working on long-term solutions. We have held budget hearings with every vice president and dean to discuss priorities in rank order. We have nearly 100 faculty, staff and students engaged in task forces looking for opportunities to cut costs and increase revenues. Some of these solutions will require your support of regulatory reform.

In summary let me say that if you seek examples of the success of your work as a General Assembly; if you seek examples of state agencies that deliver both quality and efficiency; then you need look no further than Clemson, where we are producing one of the nation’s finest educations for one of the nation’s lowest appropriations.

Let me end with this final thought to clear the air and address the elephant in the room — tuition. Clemson’s combined per student revenues from tuition and fees and state appropriations for education have increased an average of just 4.5 percent since fiscal year 2000. So over this 8-year period, adjusted for inflation, this increase is only 2.4 percent. This is a very reasonable rate of growth, especially compared to the much greater improvement in quality. We have done a lot with very little.

We are educating more students, and these students are getting a higher quality and more valuable education, and it is being done efficiently and with considerably less funding than institutions in neighboring states. WE MUST PRESERVE AND CONTINUE — NOT REVERSE OR END — THIS IMPORTANT WORK FOR THE STATE OF SOUTH CAROLINA.

Thank you for your time and attention. I will be happy to answer questions.