SENATE FINANCE COMMITTEE LOGNOTES February, 19, 1999 GENERAL SUBJECT(S): State of the University Joint Meeting between the Senate Finance Committee and the House Finance Committee The following overview was taken in log note format. Tapes and handouts will be on file with the Senate Finance Committee through the 21st Legislative Session, contact 465-2618. After the 21st Legislative session they will be available through the Legislative Library at 465-3808. Time Meeting Convened: 8:45 AM Tape(s): SFC-99 # 32, Side A & B PRESENT: Senator P. Kelly Senator Parnell, Chaired the Meeting Senator Green Senator Torgerson Senator Phillips Senator Donley Senator Leman Senator Wilken Senator Adams was not present ALSO PRESENT: Senator Johnny Ellis; Representative Gene Therriault; Representative Alan Austerman; Representative Gary Davis; Representative John Davies; Representative Con Bunde; Representative Ben Grussendorf; Representative Carl Moses; Representative Mary Kapsner; Representative Tom Brice; Representative John Coghill, Jr.; Representative Joe Green; Representative Eric Croft; Representative Andrew Halcro; Representative Lisa Murkowski; Mike Burns, President, University of Alaska Board of Regents; Brian Rogers, Member, University of Alaska Board of Regents; Elsa Demeksa, Member, University of Alaska Board of Regents; Chancy Croft, Member, University of Alaska Board of Regents; Dan Ogg, Member, University of Alaska Board of Regents; Joe Thomas, Member, University of Alaska Board of Regents; Mary Jane Fate, Member, University of Alaska Board of Regents; Mark Hamilton, President, University Of Alaska; Wendy Redmond, Vice President of University Relations, University of Alaska; Ann Ringstad, Director, Government Relations, University of Alaska; David Teal, Director, Division of Legislative Finance; Tammy Stromberg, Fiscal Analyst, Division of Legislative Finance. LOG SPEAKER DISCUSSION Tape: SFC - 99 #32, Side A 9:15 am Co-Chair Sean Parnell Introduction We want to spotlight the University of Alaska this year. MARK HAMILTON President, University of Alaska. Introduce Board of Regents MIKE BURNS President University of Alaska Board of Regents. Introduce other Board of Regents members present: Brian Rogers, Elsa Demeksa, Chancy Croft, Dan Ogg, Joe Thomas, Mary Jane Fate. Mark Hamilton We are dead last in the retention of our college bound students. We only have 40 percent This represents a significant migration of our young people. Speak to loss of population of ages 20-30. These are the people that give us new ideas. It is a natural resource issue. This is a state institution. It ought to be responsive to the needs of our state. I'm asking for $16.3 million for the next 3 years. This represents 1% of real growth. Graph: Putting UA on Track In the early 1990s we were told we had to start pulling our weight, I'm going to show you how we did that. FY 90-FY96 was the Revenue Alignment period List areas of changed revenues and the amounts. That totaled $12.1 million per year, which was only enough to barely subsist. Since 1990 we had to reduce full time teacher staff by 200 - in the entire decade, total staff reductions equals about 1000 employees. FY96-FY99 was the Reduction period. (list areas of amounts of further reductions and those amounts) Total revenue was only $5.5 million during this time period. University of Alaska has to function, bills have to be paid. So we came to this body We want to mortgage our human resources. RIP. Good news is it raised some money We encouraged employees to retire and we did not replace them. Bad management move. We have fewer professors to go out and get grants. Also grants are based on our investments of teachers, labs etc. This desperation act of reduction is a one- time act and a very bad deal. Talk about the vision for a real opportunity for an aerospace. I appreciate your expression of your vision and your enthusiasm. We in the Legislature also have a challenge. For us to meet your vision, it's going to be a bigger challenge. Senator Loren Leman Refer to someone from Texas who advised, the first thing you do when asked for more money is you don't give it to them but make them work better with their money. It is important that a university have a relationship with industry. What have we received for Alaska out of the investment into research? Research should result somehow into more money. Vast majority of research done in AK is not industrial related. We have the opportunity to do industry with an aerospace facility. Mark Hamilton We detail the need to hire the faculty to develop the curriculum to attract the students who will in turn generate the revenues. In your first discussion about Alaska being dead last in retention of college age people. I think you are painting a blacker picture and we can't do anything about that. In Washington state I could go to any number of state colleges. Here there is only one choice. Most of Alaskans are immigrants to the state and our children will also have some of that wanderlust. I have a friend who requires his kids to go Outside for school so they can experience the Lower 48. Bunde Refer to taxing. We need to expand that 20 percent figure. We can do that by hiring more faculty, becoming more user friendly, etc. If I believed in the braindrain theory, the University of Alaska should fire me today. I refuse to believe that what is presently, is what should be in the future. Mark Hamilton 20% The university is required to mail a federal 1098T-tax form to everyone who paid for some form of tuition at the university. Last year we sent out 63,000 of these forms. That's Alaskans who paid some sort of tuition for some class in the last year. Some of our kids are missing out on opportunity. Refer to the comment made by Senator Loren Leman regarding the University of Texas. Texas was going through the same oil prices crisis during the early 1990s that we were. What they decided was to invest more in their universities. Senator Pete Kelly For six months on the job I commend you on your knowledge of the university. Senator John Torgerson What are you plans to turn around the migration of students leaving the state? In discussions I've had with parents whose children decided to leave the state for their higher education I was never told it was because of bad classes. Its "My daughter called the registrars office and was on hold for so long and then got the wrong answer." Refer to another university that claims to have one administrator for every student. That's service. The ultimate financial crisis was in the 1930s. In 1930 General McCarther had his entire armed forces cut. In response he then increased education as an investment. During an Anchorage caucus meeting, the Anchorage school board wanted an increase in funding. We asked them what they would produce for the money. I ask you the same question. Co-Chair Sean Parnell Fair question. We looked at where the trends are. We need to talk to people to find where the areas are. We already have a list of areas, health care. How do you get there, you rebuild the instruments. I'm going to hire the teachers to set the curriculum and get he ball rolling. Those will in turn raise more fed receipts, attract more students and raise more student fees. Mark Hamilton I don't think the University of Alaska has done well at selling itself. There is a poor interrelationship with K-12 education. Second, no matter what we do if we invest in the university we have to take from other agencies to give to you. If we don't invest in ourselves what will the infrastructure be in AK in the next ten years, it will affect the tax base in AK. Austerman We have not sold ourselves very well. Especially in the relationship with education of K-12. In Maryland most teachers teaching K-12 graduated from a Maryland university. This contributes to the braindrain. We have not done our job in being involved in K-12 education. Mark Hamilton Yesterday in a House Oil and Gas Committee meeting, Representative Tom Brice asked BP what was the biggest investment that should be made. The president said the University of Alaska. Can you tell me where you've been working with industry Davies List of every degree and category that we teach. The University of Alaska served the state well in incubating the world trade industry. Mark Hamilton Relating to question what would you do with money if you had it. The former UA president did a study on how to spend the money. Found that a formula method was the best. Would you follow or alter that formula? It has also been suggested that the student loan program be limited to Alaskan schools. How do you feel about that concept? Bunde Regarding the Student loan program, the University of Alaska would benefit by some sort of bias. However there are other factors involved that you are privy to that I don't know about. Mark Hamilton Don't think a "dollars per student" formula is the best way to do it. Tape: SFC - 99 #32, Side B 10:35 AM U of A - Anchorage feels that the 1980s should have been the time of greatest increase into their campus. It's not right. Money shouldn't go to geographic region. It should go to areas where it can be of the greatest service. I've heard Wes Hamilton speak on selling yourselves. Address selling yourselves and how you would go about it. Senator Gary Wilken Selling yourselves. First thing you do is tell the students you want them to come to your school. We have a natural resource fund partialed out. We need to bring it together. We now offer a scholarship for all students who graduate in the top 10- percent of their high school class. This money can be spent on books, housing, tuition, or however they choose. For those with wanderlust, we will hold that money for them when they leave. When they decide the Lower 48 isn't the land of milk and honey, and they want to come back, the money is waiting for them. Mark Hamilton (Refer to money that is appropriated for teaching purposes but instead gets redirected to research projects. Comments about faculty more interested in research and the view that teaching is something that just gets in their way of research.) Senator Dave Donley Will have to explore the data but your thesis is correct. We're not going to put money into research that could be used for teaching. Mark Hamilton Refer to Texas. We need to focus on how we get there. They have a great relationship with the U of Texas. Senator Loren Leman We've been sitting thought many overviews. Maybe we will come up with something. Austerman Regarding trying to attract students. The University of Alaska has told us at various meetings and with the press present, that the facilities are in disrepair. That same message went to out to potential students. Now that you have that money, how will you get the message out to students that they can get a good education at the University of Alaska? Therriault Never assume all who went before you were fools. Mark Hamilton Reasonable people made hard decisions. This is not a university in disrepair. It has been held together by dedicated faculty and staff. This institution can go forward. I don't envy your job. University of Alaska is not just another problem; it is part of the answer. Adjourn 10:08 am Co-Chair Sean Parnell SENATE FINANCE COMMITTEE LOG NOTES 2/19/99 Page 7