President’s Outreach

October 25, 2010

Dr. James R. RamseyPresident, University of Louisville

We do know wherePrestonsburg is!

Thanks for being here.

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Economists like pictures and graphsSome dots and a triangle…

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Heck, I’m an economist so let’s talk about

the economy.

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

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Peak Decline in real GDPDec-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)

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-

Dec-97

Aug-01

Apr-05

Dec-08

Aug-12

Apr-16

Dec-19

Aug-23

Apr-27

Dec-30

Aug-34

Apr-38

Dec-41

Aug-45

Apr-49

Dec-52

Aug-56

Apr-60

Dec-63

Aug-67

Apr-71

Dec-74

Aug-78

Apr-82

Dec-85

Aug-89

Apr-93

Dec-96

Aug-00

Apr-04

Dec-07

-800

-600

-400

-200

0

200

400

600

-131-54-95

• 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

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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

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Kentucky has not been immune to those impacts

Nonfarm employment in thousands

10Jan

-99Jul-9

9Jan

-00Jul-0

0Jan

-01Jul-0

1Jan

-02Jul-0

2Jan

-03Jul-0

3Jan

-04Jul-0

4Jan

-05Jul-0

5Jan

-06Jul-0

6Jan

-07Jul-0

7Jan

-08Jul-0

8Jan

-09Jul-0

9Jan

-10Jul-1

01750.0

1770.0

1790.0

1810.0

1830.0

1850.0

1870.0

1890.0

Jan '991769.4

Oct '001833.6

Jul '031777.6

Dec '071872.4

Aug '101768.6

Kentucky Economy:Manufacturing – Our Bread and Butter

(in thousands)

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Jan-99

Jul-99

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

200.0

220.0

240.0

260.0

280.0

300.0

320.0

308.3

Aug '10212.5

Where will jobs of tomorrow come from?

• Healthcare/life sciences• Logistics/distribution• Advanced manufacturing• Energy research• Business services

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Things to note

• Economic transformation slow• Education all education more

important than ever

(We are in this together)

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Education Pays

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$25,000

$30,000

$35,000

$40,000

$45,000

$50,000

$55,000

15% 20% 25% 30% 35% 40%

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

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CPE/LEGISLATIVE RESEARCH COMMISSION RESPONSE TO DATA REQUEST SEPTEMBER 1, 2010

Category Rank Among KY Public Institutions

PERCENTAGE INCREASE IN THE 6-YEAR GRADUATION RATE 1

INCREASE IN THE # OF BACCALAUREATE DEGREES AWARDEDPercentage increase

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PERCENTAGE INCREASE IN ALL DOCTORAL DEGREES AWARDED 1

INCREASE IN THE # OF DOCTORAL DEGREES AWARDED- RESEARCH/SCHOLARSHIPPercentage increase

1

1

INCREASE IN THE AVERAGE ACT SCOREPercentage increase

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PERCENTAGE INCREASE IN FALL ENROLLMENT FTE 3

PERCENTAGE INCREASE IN FULL-TIME UNDERGRADUATE RESIDENT TUITION AND FEES (ANNUAL RATE) ** LAST PLACE IS GOOD AS THIS REPRESENTS THE LEAST % INCREASE IN TUITION….

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Challenges, but…To Close on a Good Note

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Thank you –

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