Address to House Ways & Means Committee
Good afternoon.
On Friday of this week, Clemson University's Board of Trustees will be asked to endorse a set of strategic goals designed to propel Clemson into the nation's top tier of public universities. Given our recognition as TIME Magazine's Public College of the Year, this goal is achievable.
The steps that we are prepared to take in order to achieve this vision — such as building research support, expanding public service, recruiting top faculty and students, and providing support systems to improve student performance — these steps will have a long-lasting and positive impact on the State of South Carolina.
As Clemson improves, the beneficiaries will be the businesses, communities and citizens of South Carolina. If we are successful in improving the quality — and the reputation — of Clemson University, then the State of South Carolina is instantly more marketable to prospective businesses, industries, world-class faculty and the best and brightest students. Our students, industries and citizens deserve a public university of this quality.
As we developed these ambitious goals, we were fully prepared to make difficult decisions in order to implement them. We were prepared to reallocate resources internally, redirecting funding toward our highest priorities. We were prepared to pass fee increases, with a pledge to students and parents that the additional revenue would be used to improve the quality of education. We were prepared to do our part, and we assumed that the State would continue to provide at least stable funding, if not modest increases.
Instead, we find ourselves facing the prospect of the largest education budget cut in the history of South Carolina.
Further, we find ourselves with few options for responding in such a short time-span. There are several factors that contribute to our dilemma.
First, the new "Teacher and Employee Retention Incentive" program, which the General Assembly passed last year, has eliminated much of the normal attrition of faculty and staff.
Second, the state's LIFE Scholarship has caused significant increases in our enrollment over the past several years. Even if we severely curtail enrollment this fall, we still have three very large classes to accommodate.
Third, we must recognize that enrolling a student is a four-year commitment. Even if we were to eliminate degree programs, we must grandfather those students already enrolled in those programs. So there are few if any immediate savings that accrue from such drastic measures. Finally, there are limits on the amount we can increase tuition and fees — some placed on us by the General Assembly and some by the marketplace.
We have proven that we care about being good stewards of public resources. In 1995, we implemented a major academic reorganization, reducing nine colleges to five colleges. Further, we have taken steps to keep tuition affordable. We were the only school in the state to have a zero percent tuition increase within the past decade. These efforts continue. Just this month, we announced a reorganization of our College of Agriculture, Forestry and Life Sciences to eliminate an administrative layer and improve efficiency. But these measures have also left us with little "belt-tightening" that can still be done.
Colleges and universities are not typical state agencies. We are in the business of creating futures. Today, as we consider funding for colleges and universities, we must realize that we are also determining what kind of future South Carolina will have.
According to the Bureau of Labor Statistics, the most job growth between now and 2008 will occur in two areas — professional specialty jobs and service jobs. These two occupation areas are on exact opposite ends of the educational and income spectrum. Which do we want for South Carolina?
We know what our neighbors have said they want. North Carolina taxpayers recently passed a $3.1 billion bond bill for their colleges and universities, voting to increase their own taxes in order to improve the higher education infrastructure.
Georgia has in recent years appropriated increases in higher education spending that are larger than our state's entire higher education budget.
Being the low-wage state between two thriving, knowledge-based economies is not the future we want for South Carolina.
The negative impact of significant budget cuts for higher education cannot be overstated. The results will impact virtually every constituency in the state.
Students and their parents will face higher fees, fewer course options, and more restrictive admissions policies — at the very time that the LIFE Scholarship has led them to believe that college is accessible.
Knowledge-oriented businesses and high-tech industries — the drivers of a 21st century economy — will locate where there is a steady supply of the well-educated work force they require. Industries and communities that rely on our public service programs for daily counsel may find doors closed and calls going unanswered.
Our most highly regarded faculty members will take their expertise and their research funding to states where their work will be supported — and the industrial development that can spring from their research will follow them.
I offer a case in point. An Australian-based biotechnology company known for its research with human embryo stem cells announced recently that it is moving its headquarters to Athens, Georgia. The reason is Steven Stice, a faculty member at the University of Georgia who is considered a pioneer in therapeutic cloning technologies. The market value for products that this firm currently has under development has been estimated at $6.6 billion. That's the impact higher education — particularly research universities — can have on a state's economy. Literally, one world-class faculty member, whose research was well supported by his institution and his state, ultimately may be responsible for generating billions of dollars for that state's economy.
In light of higher education's unique role and its contribution to the economy, my budget request is as follows:
- First and foremost, we ask for exemption from state budget cuts. Funding stability is our most basic necessity. We have said repeatedly that education is our state's top priority, and it is time to recognize that education cannot and does not stop at grade 12.
- Second, we request additional funding targeted to projects that will directly address economic and social needs of the state, specifically:
- initial funding for a civil engineering/textiles research facility;
- continued funding for the Center for Advanced Engineering Fibers and Films;
- continued funding for Call Me Mister, an initiative to increase the number of African-American men teaching in our elementary and secondary schools.
- Finally, we ask for greater flexibility in managing our resources and more tools for adjusting to budget changes. For example, an amendment to Proviso 72.27 could help us use grant funds to hire temporary faculty and staff, reducing the number of employees that are hired on state funds into permanent positions. Such a change could greatly improve our ability to respond to budget cuts.
In short, we ask that you send a loud and clear message that education is the state's number one priority.
Every day that an education budget cut stays on the table, the reputation of the state is damaged. It is the wrong message to send to our brightest students, to prospective faculty, and to industries we are trying to recruit. It could cause people to question South Carolina's commitment to education.
We have pledged that Clemson will not whine. We simply want you to know all the facts as you begin your task.
We recognize the dilemma that you face. We understand the reality of the budget shortfall. We recognize the signs of an economy that is still growing, but growing more slowly. But higher education is your best ally, your strongest weapon, in ensuring the state's continued prosperity.
A national survey shows that every dollar invested in colleges and universities brings a median return of $4. The converse may also be true: It may be that a $25 million cut to Clemson equates to a hundred million dollars out of the state's economy. South Carolina simply can't afford that.
I will not conclude without answering the specific question you have asked, which is how Clemson University would respond to a budget cut of 5 percent, 10 percent and 15 percent in its education and general budget.
A 5 percent budget cut is a loss of more than $5.2 million, and a 10 percent budget cut raises the figure to $10.4 million. We would respond primarily through fee increases, with exact percentages for in-state and out-of-state students to be determined by the Board of Trustees.
A 15 percent budget could would amount to nearly $16 million, which is the equivalent of a tuition increase approaching 30 percent or more. Obviously that's excessive, so our response would have to include reductions in services and academic programs.
A cut of any size would substantially hinder our efforts to improve the quality of a Clemson education, increase the value of a Clemson diploma, and enhance the national reputation of Clemson — and therefore the national reputation of South Carolina.
Let me close by offering a comment from one of the nation's most respected economists. When Alan Greenspan spoke to the national Governors' Association meeting in July, he said that education is the key to keeping the U.S. economy on a roll. At the closing session, he said, "If we are to remain in transforming knowledge into economic value, the U.S. system of higher education must remain the world's leader."
I thank you for your attention and will be glad to answer questions.