President’s Outreach October 25, 2010 Dr. James R. Ramsey President, University of Louisville

We do know where Prestonsburg is! Thanks for being here. 2

3 Economists like pictures and graphs Some dots and a triangle…

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Heck, I’m an economist so let’s talk about the economy. 5

Sources: NBER, BEA, and BLS. * Lowest level during the current recession. The next two quarters (2009: III and IV) have been positive. 6 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

National Non-Farm Employment (in thousands) 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 8 National Economic Thoughts

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 9

Kentucky has not been immune to those impacts Nonfarm employment in thousands 10

Kentucky Economy: Manufacturing – Our Bread and Butter (in thousands) 11

Where will jobs of tomorrow come from? Healthcare/life sciences Logistics/distribution Advanced manufacturing Energy research Business services 12

Things to note Economic transformation slow Education all education more important than ever (We are in this together) 13

Education Pays 14 Per Capita Income in All 50 States v. Adults with Bachelors Degrees or Higher Data for 2007

Students or Inmates?

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

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

Thank you – 18