Spring General Assembly 2010
January 13, 2010

Welcome to the Spring 2010 semester.

I am sure those of you who spent Christmas Day in Spearfish will have stories to tell for generations about Christmas 09. For those who travelled during this break you had experiences that were not anticipated prior to the terrorist's effort on Christmas Day or adverse weather conditions. I am thankful that everyone is back safe and appreciate the opportunity to talk with you today about campus activities and legislative/budget issues.

Many of you have heard or read about the budget recommendations Governor Rounds presented last month to the legislature which included good news and bad news for higher education. We experienced a sense of relief since he did not call for any immediate budget reductions nor did he recommend reductions in next year’s budget. We were disappointed that he recommended no salary increases for the second consecutive year for state employees. The Governor has consistently been supportive of higher education and recognizes the critical role we play in developing the workforce South Dakota will need in the future. Presently 24% of South Dakotans over age 25 hold at least a bachelor’s degree. It has been noted that we need 55% to address the workforce needs in the Information Age and Global Economy. To meet this goal, we must graduate 400 more individuals each year as a system. During the past 4 years, the percent of individuals completing their program from BHSU has increased by 35%. While this is an impressive statistic, we must continue to focus on recruitment and retention of our students.

During the intervening weeks since the Governor’s budget presentation, some legislators and the media have raised several issues regarding his recommendations, the condition of the economy, and higher education. One of the issues frequently mentioned in the media is the growth of state government especially at the Regental level. There is a straightforward and defensible explanation. It is important to note we must have legislative approval for all positions irrespective of funding source. For example, if we receive a grant and it includes an administrative support position or a research position, we must have FTE authority from the legislature to fill the position even though no state funds are used. Please keep this concept in mind as I move through the next few minutes.

The Rapid City Journal reported in this morning’s paper that the Board of Regents has increased budgeted FTE by 836 positions during Governor Rounds tenure in office. Please note BHSU has increased its FTE by 68 positions; none of which were supported by state funds! In addition, during this same period, we have increased our external funding from grants by over 165% ($2,205,725 in 2003; $5,853,334 in 2009). Our success in fundraising has increased by 423% ($552,347 in 2003; $2,892,373 in 2009). This growth is occurring during the worst economic period since the Great Depression. You have heard me say previously that approximately 15% of the BHSU budget comes from state funds. Of particular note is that of the 415 FTE we have at BHSU, 290 (70%) are paid from funds other than the state. These include our resident hall personnel, bookstore employees, child care workers, Young Center employees, faculty teaching self-support courses, researchers and others. These positions paid through non-state funds are contributing to the state and local economies. These employees are buying or renting homes, they are buying groceries, clothing, and gas. They are participating in entertainment venues. They are paying taxes. In other words, they are spending money that we received through our own efforts. Similar scenarios are occurring at the other five campuses. If we were a business and experienced this growth, we would be celebrated not criticized.

Sometimes it may appear we are defensive about the critical role higher education plays in supporting the economy. To quote from the December 18, 2009 Kiplinger Business Letter, “When it comes to American higher education, businesses have a lot at stake…The educational level of society plays a huge role in innovation, invention, and economic productivity.” Another often used quote comes from the Business-Higher Education Forum (2003), “Today, as we face an uncertain future, the strength of our nation, intellectually, economically, militarily, will be based on a highly motivated, well educated workforce. That strength will only be as great as our commitment to learning and excellence in education.” I am asking each of you to be acquainted with the information. We should be proud of our contributions to the state economy and our ability to garner funds during difficult economic times. Please attend upcoming Cracker Barrels during this legislative session and speak up. When you interact with the public, talk with friends or relatives, be willing to explain our success. We are contributing to the state’s economy—not draining it.

As we deal with budgets, I believe it is critical for us to have as much transparency as possible. Development of a budget process has been evolving over the past 3 years. The first year we focused on implementation of the Banner System. Last year, we focused on decentralizing the budgets for Academic Affairs and this year have moved to Student Affairs and Information Technology. Two years ago, we solicited proposals for budget needs which have been considered for any year-end discretionary funding (which has been quite meager). Last month, Kathy Johnson, Rob Houdek and Leone Geppert from Fiscal Affairs presented budget information to the President’s Advisory Council which is comprised of leadership from faculty senate, classified assembly, student senate, and campus fund controllers. The intent of this meeting was to acquaint the council members with the sources of funding and restrictions which may be placed on specific funding. For example, if funding is received from the Higher Education Facility Fund (HEFF) it must be spent on the specific physical plant project which was on the system list. We can’t spend HEFF funds for academic programs, salaries, travel, operations, etc. In addition, budgetary flexibility will come from our ability to generate new revenues. Over the break, I asked the council members to forward suggestions for ways we can increase our sources of revenues. These suggestions are being collated and will be the focus of the next meeting of the group. If the legislature determines we must reduce our budget, the council will be intimately involved in the discussions. I am often drawn to Darwin’s statement on evolution where he stated, “it is not the strongest nor the most intelligent that survive but those most responsive to change.” The history and culture of this campus would suggest that we are definitely responsive to change and positioned to control our destiny.

I wish to remind you that higher education was cut $1.2 M last year with $107,000 for BHSU. In some regards the cuts we made were relatively invisible to the campus. We reduced our budget through efficiencies which includes becoming less paper dependent as witnessed by online syllabi and frequent admonitions in email communications to “think before you ink”. We reduced funding to the library and to CAMSE and continue to reduce our utility consumption. Results from a recent study indicated we are the most energy efficient campus in the System. At a time when Reduction in Force is common news, we made every effort to keep our employees on the payroll. However, the $107,000 reduction has impacted the campus and further cuts will be very difficult to make if that occurs.

A number of questions have arisen regarding various construction projects:

• Union: 99% completed. Only the north stairs and some sections in the lower level still need to be finished.
• Science Building: Spring 2011
• Pedestrian Way: Start in March (funding through stimulus funds)
• University Center: Spring 2011
• Woodburn: Architect selected
• Wood fired Boiler: Continue to plan

I wish to express appreciation to Shelby Cihak who organized the Biggest Loser contest for the campus and congratulate the 55 employees who are participating in this effort to become healthier through diet and exercise. Bob DiBonto has developed several intriguing programs to assist everyone in this effort (not just the Biggest Loser contestants). Bob will be at a table in the hallway after this assembly to talk with you about these opportunities to get or stay physically fit.

In closing, I encourage you to contact me or your respective vice president if you have any questions as we move through the legislative session. Dr. Myers and I continue to hold our annual meetings with departments. We also meet monthly with faculty senate, student senate, and classified assembly leadership. However, I am always open to other meetings if you have questions.

Thank you for everything you do for BHSU and our students. Have a great semester.