Presentation on theme: "Department of Urban and Public Affairs PADM 600 PADM 605 NOVEMBER 4, 2013 Dr. James Ramsey President, University of Louisville."— Presentation transcript:
Department of Urban and Public Affairs PADM 600 PADM 605 NOVEMBER 4, 2013 Dr. James Ramsey President, University of Louisville
LOUISVILLE.EDU 2 I dont get to teach economics anymore, but I did find my notes from Econ 202 My notes from Econ 202 My Dean...
LOUISVILLE.EDU 3 Some ask me about my leadership style: Heck, Im just an economist/econometrician I am what I am -Popeye
LOUISVILLE.EDU 4 Still Basic Economic Concepts Important as we face University decisions A.Specialization / division of labor B.Opportunity costs C.Cost / benefit analysis D.Risks / return analysis (risk lovers vs. risk averse) E.Data / Data / Data So this is how I think...
LOUISVILLE.EDU 5 A. Specification/division of labor
LOUISVILLE.EDU 10 With apologies to a Dallas Federal Reserve Economist who I heard 14 years ago The Business Cycle Still Exists! So lets look at a case study
LOUISVILLE.EDU 11 The Last Decade or so The recession! Quarterly Change in GDP (measure of macro economic activity)
LOUISVILLE.EDU 12 We know that nationally times have been unprecedented…11 post WWII recessions *Lowest level during the current recession. The next two quarters (2009: III and IV) have been positive. -http://books.google.com/books?id=g- L0iLH5u34C&pg=PA408&lpg=PA408&dq=Real+GDP+November+1948&source=bl&ots=1eT_Am6PKI&sig=hkYMPbaa6BWiE92o- tg8Z8DPBI4&hl=en&sa=X&ei=2gEJUrDyE-Hg2AX384DYDQ&ved=0CDcQ6AEwAQ#v=onepage&q=Real%20GDP%20November%201948&f=falsehttp://books.google.com/books?id=g- L0iLH5u34C&pg=PA408&lpg=PA408&dq=Real+GDP+November+1948&source=bl&ots=1eT_Am6PKI&sig=hkYMPbaa6BWiE92o- tg8Z8DPBI4&hl=en&sa=X&ei=2gEJUrDyE-Hg2AX384DYDQ&ved=0CDcQ6AEwAQ#v=onepage&q=Real%20GDP%20November%201948&f=false PeakDecline in real GDP Dec-07 (IV)-5.1%* Mar-01 (I)-0.5% Jul-90 (III)-1.3% Jul-81 (III)-2.9% Jan-80 (I)-2.2% Nov-73 (IV)-3.1% Dec-69 (IV)-0.6% Apr-60 (II)-1.6% Aug-57 (III)-1.2% Jul-53 (II)-2.7% Nov-48 (IV)-1.7%
LOUISVILLE.EDU 13 Just when we thought recovery was taking hold 2011 Black Swans Tsunamis/Nuclear Meltdown Japan Civic unrest Tunisia/Egypt/Libya/Yemen/etc. Europe Economic Meltdown Greece/Spain/etc. 2012 Sandy Sequestration 2013 And now shutdown So, we are recovering – but we are not back! Yet.
LOUISVILLE.EDU 15 Slow recovery continued – September 2013
LOUISVILLE.EDU 16 National Employment 136,290,000 US jobs December 2007 137,982,000 Jobs lost in the recession Jobs gained in the recovery US jobs September 2013 Still 1.69m fewer people working today http://beta.bls.gov/dataViewer/view/timeseries/CES0000000001 http://www.deptofnumbers.com/employment/us/
LOUISVILLE.EDU 17 What does all this have to do with UofL, being Prez., etc Well, Kentuckys Economy is Dependent on National Economy
LOUISVILLE.EDU 18 Kentuckys Economy A Quick History
LOUISVILLE.EDU 19 But since 2000 Kentuckians working August 2013
LOUISVILLE.EDU 20 But there is more to it Kentucky Manufacturing Employment Why Important? WAGES! August 2013
LOUISVILLE.EDU 21 So, in Kentucky things are better but we are not back yet from the depths of recession U.S.KY Jobs Lost7,500,000120,000 Jobs Regained5,787,00096,300 % of Jobs Regained77%80%
LOUISVILLE.EDU 22 I am trying to hang with you but work with me … Whats this have to do with UofL?
LOUISVILLE.EDU 23 We are a State Institution! Kentucky State General Fund$9.3B100% Individual Income Tax$3.7B40% State Sales Tax$3.1B32% Combined$6.7B72% Income Tax/Sales Tax highly correlated with economic activity i.e. Employment! People working! State Funded? OR State assisted? FY 13
LOUISVILLE.EDU 24 Year($000,000)% Change 20057,6459.56% 20068,3769.56% 20078,5732.35% 20088,6641.06% 20098,426-2.75% 20108,225-2.39% 20118,7596.49% 20129,0263.05% 20139,3483.44% 20149,5782.4%* * Forecasted Recessionary years Modest recovery KY General Fund http://www.osbd.ky.gov/NR/rdonlyres/1ADF4A09-F159-40BE-9DD0-2156ACCD0276/0/1214BOCBudInBrief.pdf Legislative (budget) Session
LOUISVILLE.EDU 25 http://www.ksba.org/protected/PrintArticle.aspx?iid=50GAYB&dasi=3UBI So, While Modest Economic Recovery, State Budget (2008-14) Continues To Be Ugly Because of Expenditure Side of Budget
LOUISVILLE.EDU 26 So as a result of the national economic activity and its impact on Kentucky and Kentuckys budget issues, we are a very different institution …
LOUISVILLE.EDU 27 Budget: UofL Revenues $% FY 1997-98FY 2012-13 State Funds126.5 M141.2 M12% Tuition and Fees63.3271.0328% Other General Funds37.262.167% Clinical/Research Income127.3509.1300% Philanthropy22.1142.6545% Athletic Association, Inc.17.677.2339% Pass Throughs37.833.3 TOTAL431.81,236.5186%
LOUISVILLE.EDU 28 Fiscal Year 1997-98Fiscal Year 2013-14
LOUISVILLE.EDU 29 1. Continuing re-engineering of processes and expense management 2. Aggressively improving balance sheet management, with an emphasis on converting underperforming assets 3. Increasing clinical income to support education and research 4. Increasing contract research and commercialization income 5. Creating private sector partnerships 6. Being creative in expanding the research mission through innovative financing tools like the tax increment financing plan 7. Enhancing fund raising What we have been out doing to move forward Our Seven Strategies
LOUISVILLE.EDU 30 Strategy one – Pick low hanging fruit. $114.8M in cost efficiencies
LOUISVILLE.EDU 31 Strategy two – Taking underperforming assets and making them perform.
LOUISVILLE.EDU 32 Strategy three – Increasing value from our research/IP
LOUISVILLE.EDU 33 Strategy four – Use private sector to do what we are not good at
LOUISVILLE.EDU 34 Strategy five – Generate clinical income to support teaching/academics
LOUISVILLE.EDU 35 $5.5 M Strategy six – Being creative and clever, what no other universities do
LOUISVILLE.EDU 36 And biggest yet Belknap Research Park
LOUISVILLE.EDU 37 An aside Oh, by the way, Manoj Shanker says that in 2013 UofL contributed $1.7 billion to state budget and is responsible for 20,000 jobs
LOUISVILLE.EDU 38 $600 M $750 M $940 M $1B Strategy seven – You – our friends/alums/donors – increase philanthropic support Hot shot consultant 2010 Our BOT TodayJune 30 2014
LOUISVILLE.EDU 39 So – we must do more – The University of the 21 st Century
LOUISVILLE.EDU 40 But now, in addition to fiscal challenges, we face Market challenges Questions about efficiency/effectiveness of education delivery models Pricing issues Integrity issues
LOUISVILLE.EDU 41 So – we must do more – University of the 21 st Century
LOUISVILLE.EDU 42 Our trajectory 1.Continue on our trajectory – 2020 Plan 2.Trajectory slows down – push out date in 2020 Plan 3.We accept where we are – flatline 4.The unthinkable. Possible Paths of Future
LOUISVILLE.EDU 43 Second – Next step in campus discussions of University of 21 st Century 1. Clusters of excellence 2. Reviewing education delivery models that are student centered 3. Look at organization/structural/financial processes 4. Build culture of excellence
LOUISVILLE.EDU 44 So again I say that despite my Dean not letting me teach... I really am still an economist