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Todd-Veredus Asset Community Luncheon Series
August 19, 2009
Dr. James R. RamseyPresident
Thank you for this opportunity
Economists like pictures and graphsSome dots and a triangle…
“It was the best of times,It was the worst of times.”
- Charles Dickens
(Let’s not even think about wind, ice, flood, neurosurgery, coaches, etc.)
We know that nationally times have been unprecedented…
GDP Declines During Postwar Recessions(peak-to-trough percent change; date is year of peak quarter)
1948 1953 1957 1960 1970 1973 1980 1981 1990 2001 2008 1st Qtr 2009
2nd Qtr 2009
-6
-5
-4
-3
-2
-1
0
and Kentucky has not been immune to those impacts
Nonfarm employment in thousands
p: preliminary
Jun. 20091,774.2 (p)
Dec. 20071,871.9
Oct. 20001,833.6
Jun. 20031,777.6
Employment 2009 = employment 1999
Kentucky Economy: Mining 1% of our jobs
Jun 200925.7 (p)
p: preliminary
Mining and Logging employment (in thousands)
Kentucky Economy:Manufacturing – Our Bread and Butter
Manufacturing employment (in thousands)
Jun 2009207.0 (p)
p: preliminary
Kentucky Economy: Construction Jobs – Generally Cyclical
Jun 200968.8 (p)
p: preliminary
Construction employment (in thousands)
Kentucky Economy:Education/Health Services vs. Manufacturing –
Then/Now
Jun 2009248.1 (p)
p: preliminary
Education and Health Services employment (in thousands)
Kentucky Economy:Growth, but…
Leisure and Hospitality employment (in thousands)
Jun 2009173.4 (p)
p: preliminary
We (Kentucky) face challenges
• Structural challenges
• Big challenges
• We will struggle for a while (How is that for a forecast?)
What does this have to do with UofL?
· Postsecondary Education Improvement Act (1997)o Public agenda
· Premier nationally recognized metropolitan universityo More educated workforceo More research
o Economic activityo Commercialization
· Boyle Report (1996) and follow up community mandateso New clusters
U of L to be Premier Nationally Recognized Metropolitan Research University
Our Mandates
1997 Post Secondary Education
Improvement Act
1996 Boyle Report
1998 – 2008“Challenge for Excellence”
“We met Challenge”
2020 Plan
The weak economy has an impact on us too…
Kentucky Employment Losses
Cuts/Cuts/Cuts
9 for 9
State Individual Income Tax/Sales Tax
Despite cuts and other distractions, we are making progress… Our Students
• Freshman class average ACT• 2008 – 24.4• 1998 – 21.8• State avg. – 20.8• National avg. – 21.2• More students from outside Jefferson County than inside
Despite cuts and other distractions, we are making progress… Our Graduates
• 1998 – 1,734 degrees awarded• 2009 – 2,428 degrees awarded– Up 40% (694 students) since beginning of
reform
• Graduation rate increased over 50%
• 7 Fulbright Scholars in 2009
Despite cuts and other distractions,we are making progress…
Focus on Translational ResearchResearch Funding and NIH Funding
Total grants for 1997 – 2009 - $140 M 1998 - $39 M
Despite cuts and other distractions, we are making progress…
“from mind to marketplace”
Despite cuts and other distractions, we are making progress…
Helping our community and state
• The Conn Center for Renewable Energy Research and Environmental Stewardship • Argonne National Laboratory
Despite cuts and other distractions, we are making progress…
Helping our community and stateNew arena and other construction projects
ShelbyHurst
Louisville Arena
Haymarket
Despite cuts and other distractions, we are making progress… but…
We have far, far more to do despite the challenges!
1. Reengineer operations2. Convert underperforming assets to fully
performing assets3. Increase fundraising4. Enhance clinical income (460 physicians)
• PPP• University of Louisville Hospital
5. Develop partnerships6. Improve contract research/commercializing7. Being creative (e.g. TIF)
Our 7 Strategies to Achieve Mandates Given Fiscal Environment
And so…
• $105 million in cuts, savings and efforts to find money to move forward
• Big things• Refinanced debt• Self-funded health insurance
• Little things• Washing windows• Power-down vending machines
Dataseam – avoiding new costs
Note: Five cancer drugs are on the way to clinical trails.
Underperforming Assets
Examples –
• Reynolds Metals
• Stoddard Johnson
• Shelby Campus
Ramping up Giving
$42,
434
,018
$36,
382,
594
$42,
382,
805 $6
4,47
6,59
6
$61,
511,
069
$51,
367,
489
$86,
571,
870
$95,
000,
000
Building Clinical Income
Outpatient Center
“For every action, there is a reaction”
• Our theory – pie bigger• Others disagree – zero sum
Enhanced food service
Our Partnerships
Student Housing – The Province Siemens Energy Audit
Being Creative – Our Tax Increment Financing District (TIF)
Health Science Campus and Life Sciences Center
Over the next 30 years this economic development will yield: • 8,700+ jobs
• $668M in payroll taxes
We have been and will be challenged, but we (all of us) must stay intensely
focused!4 keys to Kentucky’s future
• Education
• Education
• Education
• Education
Why?
So let’s wrap up…
Education Pays Per Capita Income in All 50 States v. Adults with
Bachelors Degrees or Higher - Data for 2007
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
$55,000
15% 20% 25% 30% 35% 40%
2007
Changing Priorities
Students or Inmates?
Questions?
Comments
Education Pays