TOPEKA ? Kansas University Chancellor Robert Hemenway today testified before House Education Budget Committee, calling for lawmakers to approve the governor’s recommendation for KU and for some flexibility in managing revenue from the state. KU released the following text of Hemenway’s planned remarks.

Testimony by KU Chancellor Robert Hemenway

Monday, Feb. 13, 2006

Room 514-South, State Capitol

Thank you, Rep. Hutchins and members of the subcommittee, for the opportunity to testify. Joining me this afternoon are the academic leaders of the Lawrence and KU Medical Center campuses: David Shulenburger, executive vice chancellor and provost at the Lawrence campus, and Dr. Barbara Atkinson, executive vice chancellor and dean of the Medical School.

Today, I will be addressing three topics:

1. Our efforts to fulfill our public mission and deliver significant, enduring value to Kansas;

2. Our success in leveraging public funds in order to provide Kansans an extraordinary return on their investment in us; and

3. Our need for ongoing support from the state in order to continue to serve the state well.

Advancing Our Mission

First, I’d like to talk about our efforts to advance the mission we’ve been given by the Board of Regents, the Legislature and the people of Kansas, which has three dimensions: education, research and service.

Without a doubt, the cornerstone of what we do is education, and our goal is clear: to provide the sons and daughters of Kansas a superior educational experience that will equip them to succeed against any competition anywhere in the world. We constantly strive for improvement, and results to date are encouraging:

– KU’s enrollment of 29,624 represents an all-time high for the fourth consecutive year and comprises fully one third of all regents’ university students. Further, KU has more Kansas residents enrolled as students – a record 20,587 – than any other regents’ institution. Collectively, these students come from every county in Kansas, every state in the U.S. and more than 100 foreign countries.

– Enrollment of minority students as a percentage of all students and retention rates for minorities are at an all-time high;

– The current freshman class included 71 National Merit Scholars, 12th highest among all public universities in the U.S.

– We also have 138,000 living alumni resident in Kansas – in every county and corner of the state – whose lives “testify” to the value of KU. KU grads living in Kansas include 3,800 medical doctors; 3,100 nurses; 1,800 pharmacists; 3,500 lawyers; 5,000 engineers; 13,000 teachers; 10,000 business professionals – individuals who work every day to enrich their communities, raise their families, build businesses and generally enhance the standard of living we enjoy in this state. They are our constituents, and yours, and we are proud of them.

As gratified as we are by these numbers, the more important issue for us is always the quality of the education received. It is essential to the ongoing well-being of the state of Kansas that KU be a truly world-class institution. Why? Because Kansas cannot prosper in our increasingly competitive world if the education received by Kansans is inferior.

While we have long prided ourselves on the national recognition received by KU – for example, our consistent ranking among the top public universities in the U.S. by US News – I would like to highlight a particularly satisfying endorsement we received this past year, in a book entitled Student Success in College: Creating Conditions That Matter.

Going beyond the popular assessments of colleges based on anecdotes or sets of financial or admissions figures, this book reported an exhaustive study of more than 700 colleges and universities by a team of researchers from Indiana University, who set out – in the words of USA Today – “to identify diverse institutions that do an especially good job of educating students.” Out of this process, only 20 institutions were recognized as being particularly outstanding. Of these 20, only two were large public research universities: the University of Michigan and the University of Kansas.

While education is the cornerstone, other dimensions of our mission are also critical to how KU provides significant, enduring value to the state of Kansas. I am talking about activities that take place throughout the state, every day of the week. Such things as:

– The biosciences research of our dedicated scientists in Lawrence, Kansas City and Wichita, which holds the potential to develop innovative treatments to such diseases as Alzheimer’s, cancer, diabetes and Parkinson’s.

– The Kansas Geological Survey, which provides the technical and institutional expertise needed to increase production of our state’s crucial oil and natural gas fields;

– The Center for Environmentally Beneficial Catalysis, working to build the state’s growing alternative energy sector by improving refining methods for ethanol;

– The Kansas Law Enforcement Training Center in Hutchinson, which oversees professional training for all law enforcement officers in the state;

– Our growing partnership with the Army’s Command and General Staff College at Fort Leavenworth, recognized to be the Army’s intellectual center;

– The Center for Telemedicine at KU Medical Center, which used its technological capabilities to link a soldier in Iraq with his Kansas family in Junction City to enable family counseling; or

– KU Medical Center’s outreach centers in Pittsburg, Garden City and Hays, which provide clinical sites for KU faculty and coordinate continuing education efforts for health care professionals throughout the state.

Finally, I want to highlight an initiative that spans all aspects of our mission and holds particularly great potential to benefit the citizens of Kansas – our efforts to eliminate the dreaded disease cancer in this state through the development of a world-class comprehensive cancer center and cancer affiliate network. The University of Kansas Cancer Center is an inclusive effort that will build not only on KU’s strengths in basic research, the unique asset represented by our No. 3-ranked pharmacy school and the clinical capabilities of the KU Medical Center and Hospital, but also on other assets in this region, such as the Stowers Institute for Medical Research in Kansas City and the strong hospitals and medical networks that operate throughout the state of Kansas. Under the leadership of Dr. Roy Jensen, this effort will, over the next several years, have profound impact on the public health of Kansans statewide as well as enhance the prospects of sustainable economic development.

Return on Taxpayer Investment

KU accomplishes all this with a relatively small investment of state resources: only 25 percent of our total revenues come from the state. Basically, the state gives us a foundation of core support – $240 million for FY 2005, which covers basic salaries and operating expenses for KU’s 30,000 students, 2,500 faculty and 7,000 staff, which we then leverage by raising additional revenues of more than $700 million to fund the full range of our activities. In other words, for every dollar the state directly invests in KU, KU generates an additional $3 for a total 4:1 return.

What does this return on investment look like at KU? Consider these facts:

– Our students and their parents choose to provide $160.2 million through their tuition and fees. When combined with “auxiliary enterprises,” such as housing and dining, which account for another $64.5 million, the total approaches our state appropriation.

– Our researchers continue to win more federal research grants. Total research funding is at an all-time high: $274 million from all sources during FY 2004, largely federal grants, enabling KU to undertake productive work in a broad range of fields, such as medicine, engineering and the life sciences.

– Creative partnerships – involving state-supported bonding, private gifts and research overhead dollars – helped us build the new Multidisciplinary Research Building at Lawrence, as well as major new life sciences research buildings now under construction at the Medical Center. These facilities will help develop the state’s biosciences workforce and generate breakthrough discoveries as envisioned in the Kansas Economic Growth Act.

I want to assure you all, however, that we are as diligent about saving state money as we are about building upon it. Let me share some examples of efficiencies we have recently realized:

– Purchasing of electronic journals and databases through various consortia, which has saved KU Libraries $748,000 per year;

– Reorganization of KUMC’s Maintenance Division to better utilize the skills of the workforce, which has both reduced costs by $240,000 and increased productivity by 7 percent;

– Consolidation of dining services on the Lawrence campus, which has resulted in savings of $740,000, better food selections and better service;

– Elimination of the centralized furniture store, office supply store and printing services on the Lawrence campus, which has yielded annual product savings alone of $405,000.

Securing an Adequate Investment

While we have made great strides in advancing our mission and effectively supplementing state appropriations, we are a public institution, and we do require certain kinds of support from the state in order to maximize our potential value.

Support takes two forms: (1) the core levels of funding that provide the foundation upon which we build, and (2) sufficient management flexibility to get the most out of those resources, consistent with what the Legislature expects us to deliver.

Regarding funding, while recent appropriations have not always been what we hoped for, we recognize the difficult challenges the Legislature and governor face and have great respect for the tradeoffs you must make to fulfill your obligations. Accordingly, we appreciate the support you have provided.

I would like to highlight three funding issues where we believe your support is crucial:

– First, the governor’s budget builds upon the work of the 2005 legislative session and represents a balanced, positive step for Kansas and the regents’ universities. Of particular note is the governor’s appreciation of the need to provide enhanced funds in the operating block grants and also to fulfill the promise made in SB345 for faculty salary enhancements.

– Second, deferred maintenance. Over time, the citizens of Kansas have constructed many buildings on the Medical Center and Lawrence campuses to provide education. Unfortunately, some of these buildings are now in need of major repairs – not new paint or IT infrastructure, but substantive improvements that are required to ensure the safety and well-being of students, faculty and staff. In recognition of this growing problem, which affects all regents’ campuses, the Board of Regents has proposed a deferred maintenance funding program. I commend them for trying to create the political dialogue necessary to find the appropriate legislative solution.

– Third, we are asking you to support the governor’s proposal to dedicate $5 million to the fight against cancer in this state. This recurring appropriation would provide critical funds to enable the University of Kansas Cancer Center to build the enhanced operating infrastructure and statewide clinical network necessary to earn official “cancer center” designation by the National Cancer Institute, which is an essential step toward realizing the potential health and economic benefits of this initiative.

But I’m pleased to say that all support KU needs from the state does not involve money. The other form of support that is critical is greater management flexibility. In recent years, the Legislature has taken significant steps to enable KU and other regents universities to operate our institutions more efficiently and effectively, including tuition retention, block grant funding and – last year – decoupling KU from the state classified employee system.

I would like to highlight four other ways that the Legislature could enable us to provide Kansas taxpayers more for their money. In each instance, specific legislation is pending before the House or Senate that would give management desired flexibility;

– Allowing the university to sell bequeathed property without seeking legislative approval for each real estate transaction. I want to thank the committee for its quick hearing and work on this legislation, which the House overwhelmingly passed last week and sent on to the Senate;

– Allowing regents universities to retain interest earnings on tuition and fees paid directly to us by the people we serve;

– Providing KU additional delegated authority to contract for supplies and equipment, beyond the current $25,000 statutory limit;

– Allowing KU the authority to purchase insurance for the many valuable assets – such as advanced research equipment – that currently require specific legislative approval.

If the Legislature provides this additional financial and management support to KU, I want to reiterate – as I have in previous years – that we appreciate that with support comes responsibility, and we expect to be held fully accountable to you, the regents and the citizens of Kansas who are relying on us for the outcomes. One key form of accountability is represented by the formal performance agreements that each regents institution has entered into with the Board of Regents that explicitly set forth required goals. Quite simply, if we don’t perform as promised, our funding will be cut.

In summary: all of us at the University of Kansas are working diligently to fulfill our public mission and to provide an excellent return on the state’s investment in us. We support the governor’s budget recommendations for the regents universities and are willing to be held accountable for the results.

We are proud to be the University of Kansas and proud to bear such responsibility for contributing to the economic, educational and cultural life of our state.

This concludes my testimony. I am happy to answer any questions.