Business First Editorial BoardDr. James Ramsey

President, University of Louisville

NOVEMBER 8, 2013

2

Thank you

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Our Trajectory – Pretty “Damn” Amazing

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State Revenue Growth

Public Pensions Medicaid Debt Service Corrections/Adult Prisons

K-12 Base Higher Ed-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

10.0%

63.5%

41.9%

32.8%

15.3%

-1.0%

-14.0%

http://www.ksba.org/protected/PrintArticle.aspx?iid=50GAYB&dasi=3UBI

So, While Modest Economic Recovery, State Budget (2008-14) Continues To Be Ugly Because of Expenditure Side of Budget

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The Real Issue

136,290,000

US jobsDecember 2007

137,982,000

Jobs lost in the recession

7.479 million

Jobs gained in the

recovery

5.787 million

US jobsSeptember 2013

Still 1.69m fewer people working today

http://beta.bls.gov/dataViewer/view/timeseries/CES0000000001http://www.deptofnumbers.com/employment/us/

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Kentuckians working

1,745.0

1,765.0

1,785.0

1,805.0

1,825.0

1,845.0

1,865.0

1,885.0

1,846.9

1,870.6

1,814.4

1,750.6

August 2013

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But there is more to itKentucky Manufacturing Employment

Why Important? WAGES!

August 2013

Jan-00

Jul-00

Jan-01

Jul-01

Jan-02

Jul-02

Jan-03

Jul-03

Jan-04

Jul-04

Jan-05

Jul-05

Jan-06

Jul-06

Jan-07

Jul-07

Jan-08

Jul-08

Jan-09

Jul-09

Jan-10

Jul-10

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

200.0

220.0

240.0

260.0

280.0

300.0

320.0

225.2

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Just a little comparison

U.S. KY

Jobs Lost 7,500,000 120,000

Jobs Regained 5,787,000 96,300

% of Jobs Regained 77% 80%

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Continue to face difficult state and fiscal challenges that impact our future

• Slow State General Rund revenue growth

(estimate 2013/14 is 2.5%, FY 14/15: 2.4%,

FY 15/16: 2.3%

• State’s structural budget imbalance still

exists

(more funding needed for state pensions)

Our Outlook

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• Limited / if any funding for higher education• Funding, if available, tied to “performance”• Funds, if available, tied to specific initiatives; i.e.

“college readiness”• Continued pressure on modest tuition increases

Tough Fiscal Outlook to Continue

2014 - 2016

Our Outlook

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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. Being creative in expanding the research mission through

innovative financing tools like the tax increment financing plan

7. Enhancing fund raising

“Our Seven Strategies”

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Our Trajectory

1. Continue on our trajectory – 2020 Plan

2. Trajectory slows down – push out date in

2020 Plan

3. We accept where we are – flatline

4. The “unthinkable.”

Possible Paths of Future

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Next step in campus discussions of “University of 21st Century”

1. “Clusters” of excellence

2. Reviewing education delivery models that are student centered

3. Look at organization/structural/financial processes

4. Build culture of excellence