Todd-Veredus Asset
Community Luncheon Series
Dr. James R. Ramsey
President
August 19, 2009
Thank you for
this opportunity
Economists like pictures and graphs
Some 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)
0
-1
-2
-3
-4
-5
-6
1948
1953
1957
1960
1970
1973
1980
1981
1990
2001
2008
1st Qtr
2009
2nd Qtr
2009
-1.8
-2.7
-3.7
-1.5
-1.1
-3.1
-2.2
-3.8
-1.4
-0.2
-4.8
-5.7
-1
and Kentucky has not been immune to
those impacts
Nonfarm employment in thousands
Dec. 2007
1,871.9
Oct. 2000
1,833.6
Jun. 2003
1,777.6
Employment 2009 = employment 1999
Jun. 2009
1,774.2 (p)
p: preliminary
Kentucky Economy:
Mining 1% of our jobs
Mining and Logging employment (in thousands)
Jun 2009
25.7 (p)
p: preliminary
Kentucky Economy:
Manufacturing – Our Bread and Butter
Manufacturing employment (in thousands)
Jun 2009
207.0 (p)
p: preliminary
Kentucky Economy:
Construction Jobs – Generally Cyclical
Construction employment (in thousands)
Jun 2009
68.8 (p)
p: preliminary
Kentucky Economy:
Education/Health Services vs. Manufacturing –
Then/Now
Education and Health Services employment (in thousands)
Jun 2009
248.1 (p)
p: preliminary
Kentucky Economy:
Growth, but…
Leisure and Hospitality employment (in thousands)
Jun 2009
173.4 (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 university
o More educated workforce
o More research
o Economic activity
o Commercialization
 Boyle Report (1996) and follow up community mandates
o New clusters
U of L to be Premier Nationally Recognized
Metropolitan Research University
Our Mandates
1996
Boyle Report
1997
Post Secondary Education
Improvement Act
1998 – 2008
“Challenge for Excellence”
“We met Challenge”
2020 Plan
The weak economy has an impact on
us too…
Kentucky Employment Losses
State Individual Income Tax/Sales Tax
Cuts/Cuts/Cuts
9 for 9
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 Research
Research 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 state
New arena and other construction projects
Louisville Arena
ShelbyHurst
Haymarket
Despite cuts and other distractions, we are
making progress… but…
We have far, far more to do
despite the challenges!
Our 7 Strategies to Achieve Mandates
Given Fiscal Environment
1.
2.
3.
4.
5.
6.
7.
Reengineer operations
Convert underperforming assets to fully
performing assets
Increase fundraising
Enhance clinical income (460 physicians)
• PPP
• University of Louisville Hospital
Develop partnerships
Improve contract research/commercializing
Being creative (e.g. TIF)
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
$51,367,489
$61,511,069
$95,000,000
$86,571,870
$64,476,596
$42,382,805
$36,382,594
$42, 434,018
Ramping up Giving
Building Clinical Income
Outpatient
Center
“For every action, there is a reaction”
• Our theory – pie bigger
• Others disagree – zero sum
Our Partnerships
Enhanced food service
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
So let’s wrap up…
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?
Education Pays
Per Capita Income in All 50 States v. Adults with
Bachelors Degrees or Higher - Data for 2007
$55,000
$50,000
2007
$45,000
$40,000
$35,000
$30,000
$25,000
15%
20%
25%
30%
35%
40%
Changing Priorities
Students or Inmates?
Questions?
Comments
Education Pays