1. School of Medicine Alumni October 9, 2010 Dr. James R. Ramsey President, University of Louisville

2. I appreciate the opportunity to visit with you. Thank you…. 2

3. 3

4. A little bit on the economy 4

5. Sources: NBER, BEA, and BLS. * Lowest level during the current recession. The next two quarters (2009: III and IV) have been positive. 5 PeakDecline in real GDP Dec-07 (IV)-3.70% Mar-01 (I)0.40% Jul-90 (III)-1.40% Jul-81 (III)-2.90% Jan-80 (I)-2.20% Nov-73 (IV)-3.20% Dec-69 ((IV)-0.20% Apr-60 (II)-1.10% Aug-57 (III)-3.70% Jul-53 (II)-2.60% Nov-48 (IV)-1.70% We know that nationally times have been unprecedented

6. National Non-Farm Employment (in thousands) 6

7. The economy has lost momentum – but should avoid a “double dip” – Accelerated growth first half of the year. Inventory build up – Consumer is saving – long term a good thing – Business also cautious - cost containment – not adding workers Slow/very slow recovery 7 National Economic Thoughts

8. Kentucky’s Budget Outlook I always start with employment in the state: People working = income - state income taxes - sales tax Sales/Income => 70% of state’s general fund 8

9. Kentucky has not been immune to those impacts Nonfarm employment in thousands 9

10. Kentucky Economy: Manufacturing – Our Bread and Butter (in thousands) 10

11. So we must build new economic clusters Healthcare/life sciences Logistics/distribution Advanced manufacturing Renewable energy Business services 11

12. Things to note Economic transformation slow Education all education more important than ever (We are in this together) 12

13. 13 What are we doing? 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.Enhanced fund raising 7.Being creative in expanding the research mission through innovative financing tools like the tax increment financing plan Seven Strategies for Moving Forward

14. What our state needs to do! The “Leaky” Bucket 14

15. Kentucky Chamber of Commerce: The Leaky Bucket 15

16. Other “Leaks” Medicaid/health issues Public employee pension – KTRS – KERS Defined benefit programs 16

17. CPE/LEGISLATIVE RESEARCH COMMISSION RESPONSE TO DATA REQUEST SEPTEMBER 1, 2010 CategoryRank Among KY Public Institutions PERCENTAGE INCREASE IN THE 6-YEAR GRADUATION RATE1 INCREASE IN THE # OF BACCALAUREATE DEGREES AWARDED Percentage increase 1212 PERCENTAGE INCREASE IN ALL DOCTORAL DEGREES AWARDED1 INCREASE IN THE # OF DOCTORAL DEGREES AWARDED- RESEARCH/SCHOLARSHIP Percentage increase 1111 INCREASE IN THE AVERAGE ACT SCORE Percentage increase 1111 PERCENTAGE INCREASE IN FALL ENROLLMENT FTE3 PERCENTAGE INCREASE IN FULL-TIME UNDERGRADUATE RESIDENT TUITION AND FEES (ANNUAL RATE) ** LAST PLACE IS GOOD AS THIS REPRESENTS THE LEAST % INCREASE IN TUITION…. 8 Challenges, but… To Close on a Good Note 17

18. Thank you – Tough times are not over Leadership is the key 18