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Board of Regents December meeting highlights

Tom Stinson and Tom Gillaspy updated the board on Minnesota's economic forecast

By Adam Overland

December 15, 2009

The Board of Regents were updated on a number of key issues at the December meeting, including the state of University research funding, UMore Park, and initiatives to improve graduation rates for undergraduate students.

Additionally, state economist Tom Stinson and state demographer Tom Gillaspy updated the board on Minnesota's recently released economic forecast, which projected a deficit of $1.2 billion for the current biennium and $5.4 billion in 2012-13. A decline in wages and average hours worked has significantly impacted income tax revenue for the state.

Stinson and Gillaspy noted long-term challenges because of the aging population in both Minnesota and the United States.

"By 2020, for the first time in Minnesota and the United States, we will have more people over the age of 65 than we have children in K-12 education," said Gillaspy. Stinson said that state spending pressures, driven by the issues of aging and health, will shift the state's spending focus from education and infrastructure. "It's simply a matter of numbers," said Stinson.

To compound the problem, Gillaspy said the growth of the labor force will be at record lows by the end of next decade and that future economic growth will therefore depend on increasing productivity. "These short-term problems are going to merge with some long-term problems. These are dramatic and unprecedented shifts in our society," said Gillaspy.

Stinson said that in order for the state to balance the $5.4 billion shortfall, revenues would have to increase by almost 30 percent.

"The bottom line is we have a $1.2 billion shortfall for the current biennium. This is a serious problem, and while it's going to be a challenge for you to deal with it in the short-term, the real challenge comes when you look at the 2012-13 budget and beyond. This is not something we're going to grow our way out of because of a slight uptick in the economy," Stinson said.

But both Stinson and Gillaspy stressed that their presentation was only a forecast.

"What is interesting, and what Dr. Stinson and I both believe, is that this future really plays into Minnesota's strengths. This is where we have experience--we have played a very strong economic role over the last half-century because we have pushed on the education and pushed on the productivity side, and that's where we believe the game will be played in the future," said Gillaspy.

Stinson added that since productivity depends heavily on the skills, abilities, and the education and training of the workforce, the U will be well-positioned to continue to play a key role in the economic welfare of the state.

"We are an increasingly technological society--we're going to need to be retrained and retrained and retrained--and higher education is going to have to play a role in that," said Stinson.

President Bruininks, in a Dec. 15 email to faculty and staff, discussed some of the implications of this budget forecast to the University of Minnesota.

State of U research
Also at the regents meeting, Tim Mulcahy, vice president for research, gave his annual report on the state of the U’s research enterprise. Mulcahy said the latest annual survey conducted by the National Science Foundation (NSF), covering research performance for 2008, shows that the U posted the largest percentage increase (9.5 percent) in research and development (R&D) expenditures among all institutions listed in the NSF’s top 20 ranking list.

Research expenditures at the U have increased nearly 30 percent since 2004, which is the third-largest growth in research volume among the 12 public institutions included in the top 20, and the fourth largest among the top 20 private and public institutions. "It suggests we’ve been doing better than the average university," Mulcahy said. The U maintained its rank as the nation’s ninth leading public research University based on the NSF R&D expenditure data.

On the basis of citation frequency--where U researchers are cited in journals and other scholarly publications--the U ranked in the top 10 in 15 of 19 fields, ranking in the top 5 in chemistry, mathematics, and environment/ecology.

Gross revenues from patent and licensing activity posted excellent results in fiscal year 2009, increasing to $95 million--nearly 10 percent higher than the previous year.

Mulcahy cautioned that while the U’s record of performance has been strong in the past four years, fiscal year 2009 award data mark a change in that trajectory. Sponsored research award totals declined for the first time since 2003, dropping nearly 10 percent to $607 million for FY 2009, or 16.5 percent ignoring the American Recovery and Reinvestment Act (ARRA) funding. (U researchers have done exceptionally well in attaining ARRA funding, receiving 244 ARRA awards totaling $130.6 million as of Dec. 9.) However, early reporting results indicate a significant increase in FY10 first quarter awards compared with quarter one of 2009, suggesting that the slide in the past year is temporary. The report is available online.

Other board action

UMore Park
Vice President Charles Muscoplat presented an update to the board on the progress of UMore Park. The next phase of development involves development of a timeline on gravel mining with the aim of a legal contract by early 2010, with mining beginning after permits are acquired. Muscoplat also highlighted the recent ARRA award of nearly $8 million to support the installation of a new wind turbine research facility at UMore Park to study novel mechanical power transmission and electric generator systems.

The board also approved nine individuals to serve as the Board of Governors for the UMore Development Limited Liability Company (LLC). The Board of Governors will provide oversight and management of planning and development of the U's 5,000-acre property in Dakota County.

Undergraduate education

Robert McMaster, vice provost and dean of undergraduate education, told the regents that the latest numbers show that undergrads who started in 2004 at UMTC have a four-year graduation rate of just over 46.7 percent. The four-year graduation rates have roughly doubled in the past 10 years, but are still below the goals set by the Board. McMaster said the U is working hard to improve that rate and is showing steady progress.

Provost Thomas Sullivan stressed that timely completion is a top priority for the undergraduate program. The U is investing in programs to boost graduation, including the allocation of money toward expanding a pilot project that allows advisers to better track students' activities and give advice.

Capital plan approved

The board approved the U's six-year capital improvement plan. The University continues to plan guided by the assumption that state support will continue to decline.

Institute of Technology name change
The board approved a name change for the University’s Institute of Technology to the College of Science and Engineering, effective July 1, 2010. The change is expected to more clearly describe unique combination of science and engineering disciplines. For more information, see the news release.

The Board of Regents next meets Feb. 11-12.

More information on the December board meeting including docket materials can be found at Board of Regents.