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ONE-ON-ONE - January 2005
by Ed G. Lane
'U of L is Making Progress in a Tough Fiscal Environment'
University of Louisville President James Ramsey discusses the issues facing the state's higher education system
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James Ramsey
James Ramsey has served as president of the University of Louisville since 2002. Prior to assuming the president’s position, Ramsey was senior policy advisor and state budget director for Kentucky as well as senior professor of economics and public policy at U of L. His background includes positions at the University of North Carolina, Western Kentucky University, Loyola University, Middle Tennessee University, and the University of Kentucky. Ramsey has also served as interim commissioner of the Office of the New Economy and special advisor to the chairman of the Kentucky Council on Postsecondary Education. A frequent national speaker and writer on economic issues, he received the Outstanding Public Service Award from the National Governor’s Association in 2001 and was named Kentucky’s Distinguished Economist of the Year in 1999. |
Ed Lane: You were designated the interim president of University of Louisville by the Board of Trustees in September of 2002, and in November of 2002 you were selected as the permanent president. How is U of L doing under your leadership?
James Ramsey: The fiscal environment for higher ed, both from the state and federal perspectives, has changed dramatically since 1997 and 1998. Beginning in 2002, when I was still budget director, Kentucky was forced to make cuts to higher education. There were additional cuts in ’02, ’03 and ’04 and the future of funding is still undetermined – it’s going to be difficult. There are a lot of added demands on the state budget in terms of health care, Medicaid and so forth.
As U of L’s president, I believe I was the right person needed to keep the train moving forward at a very difficult fiscal time. In tough times people either want to stand still or, in certain cases, they don’t know how to manage tight resources, so they move backwards.
I am very proud of the fact that U of L has been able to continue to build its research effort. U of L continues to attract better students; last year’s freshman class was the best in our history. We have focused on improving graduation and retention rates, and we are making progress. We want to make more progress. We’ve still got things we need to do, but U of L is making progress in a tough fiscal environment.
EL: How has the quality and size of U of L’s freshman class changed during the last three years?
JR: Years ago, before the reform, the University of Louisville was open admissions – all you had to do was walk through the door. We have changed that to selective admissions and each year we’re recruiting better and better students. Each of the last three fall semesters that I’ve been here, I’ve been able to say this is our best freshman class in terms of grade point average, National Merit winners, ACT scores, and the number of “A” students with ACT scores greater than 27.
U of L is not trying to be the biggest university in the state. We’re not trying to be the fastest growing. We shoot for about 2,200 freshmen a year, but we want good freshmen, we want to build the quality. We’re very focused on recruiting good students, providing them with a quality undergraduate academic experience and improving our graduation rates.
EL: The graduation rate is one of the areas where U of L’s record, traditionally, has not been that good.
JR: Increasing the quality of the freshman class is important. We’ve also changed our whole advising program, we’re building more campus life so that students don’t come to U of L for a class at eight o’clock in the morning and then leave campus and then come back for a one o’clock class. One of the keys to improving graduation rates is student engagement – whether it’s in athletics, intramurals, the advising center, career counseling center, the debate team, fraternities, sororities – whatever it may be. The University of Louisville has traditionally been a commuter school. We’re trying to change that: 444 new beds have been opened on campus, we’re planning now for a new residence hall – 360 new beds – for the fall of 2006. We are building campus life, improving the overall academic experience, and the social-cultural experience as a means of improving our graduation and retention rates. It’s a multi-faceted strategy. Some of the research that we’ve done has shown that while our six-year graduation rate is not where we want to be, if you carry that on out seven, eight, nine years, our numbers look pretty good. U of L is not using the flaws in the measurement methodology as an excuse, improving our graduation rates is one of the things that the university is very committed to do. One of the shared goals for all the vice presidents and all the deans is to improve retention and graduation rates. Everyone is being evaluated on the progress we make there.
EL: The state legislature has not passed a budget or approved bonding for this fiscal year. Has the inaction of the legislature delayed U of L’s construction of new dormitories and other buildings?
JR: Absolutely. Well, not on our new residence hall, but it’s impeded U of L’s ability on some facilities, both academic and non-academic. We’ve had donors provide money for an indoor practice facility for football, for a men’s and women’s practice facility for basketball and the pledges of the gifts will be used to amortize the bonds, but we can’t move forward with those. That’s a factor with our football coach – who can be recruited by Florida, LSU, Notre Dame and they already have these facilities – so it’s not just his salary. U of L has donors that have put up the money, they’re willing to help us, but because there’s not a state budget we can’t move forward. It’s not just our athletic projects, but some other projects as well.
EL: There has been some discussion about new legislation that would allow state colleges and universities to bond self-supporting facilities without legislative approvals.
JR: U of L totally supports that. Going into this next legislative session, we’re locked at the hip with the University of Kentucky. (UK President) Lee Todd and I co-authored a white paper that will come out in January. It talks about the importance of research universities, it talks about the need for not just financial support but flexibility so we can use our own resources to advance our agendas. UK and U of L are both going to be working hard to promote that agenda in the next legislative session.
EL: In a recent interview with Lee Todd, he stressed that having quality research facilities – bricks and mortar – is essential in recruiting faculty and researchers.
JR: That’s right. Our No. 1 priority for the last legislative session and the next session is to construct a research building on our health sciences campus. We’ve built and opened two research buildings downtown in the last four or five years and a research building under construction now will open here in the fall of 2005.
That research building is absolutely critical because in it will be what’s called a clean lab – it’s where you put on the “bunny suits” and you can’t go in there unless – it’s a pure environment. It will be one of the top six clean labs in the United States. We’ve had world-class faculty members write us and say – and we didn’t advertise for a job – “I’d like to come down and interview for a position at the University of Louisville,” because of this clean lab. So “Buck for Brains” has been a phenomenal success story, but to recruit the truly outstanding professors and the teams that they need, we have to have the space, we have to have the infrastructure support so that they can be successful.
EL: What about the proposed facility on the Shelby Campus?
JR: We don’t know if we’ll be funded by the National Institute of Health, but we’ll have support from the city council of that area, from the legislators that represent that area, and I’m hoping to get a letter of support from Gov. Fletcher.
This facility in and of itself will cost about $38 million. U of L applied for about $25 million from the federal government; we have to match $12 million. Employment at that one facility on the Shelby campus would only be about 40 people. They’d be excellent jobs. The important thing about that research facility is it will focus on homeland security and first responder systems and really help jumpstart the entire development of the Shelby campus.
EL: Explain how the U of L Foundation provides significant funds to operate the university.
 JR: The U of L Foundation has an endowment of about $550 million and earns interest on these assets. The foundation is a fund-raising arm of the university, it’s a management arm of our resources. The people that are on the foundation board have expertise in money management. For the last several years, our foundation’s performance has been in the top 20 percent of all university investment performance. The foundation was created before the University of Louisville became a public institution, so at that time our foundation – the whole university – was private. A lot of the issues that have been bandied about in the press about openness and all that – we’re as open as anybody. Anybody can get on the Web page, see all of our financial statements, see the minutes of our meetings. Anybody that wants to can come to our meetings – they’re open meetings. And we’ve provided every record to, in particular The Courier-Journal, that they’ve ever asked for, except for the names of donors. And now the courts have ruled that the names of corporate donors are public. The foundation has won so far in the courts on the confidentiality of individual donors. It’s The Courier-Journal that’s appealing that decision and continuing that litigation.
EL: While we’re talking about the foundation, The Courier-Journal did make a fairly big issue about the disclosure of the donors. How has disclosure of major donors affected U of L?
JR: We’re very proud. Very proud of the foundation, very proud of the McConnell Center. It’s a wonderful program that awards full rides – full scholarships – to the 10 most outstanding students in Kentucky. If they didn’t have the financial opportunity to come to the University of Louisville, they’d be leaving the state and be going to the top schools throughout the country. Academic research proves that if we lose our brightest students to out-of-state colleges, the likelihood of them coming back is lower.
EL: Another messy issue for U of L was the state auditor’s financial review of former president John Schumaker’s tenure at U of L. What is the status of this investigation?
JR: It is a non-factor. U of L has its own external auditors. I believe for political reasons the state auditor’s office – and this was when Ed Hatchett was there – felt pressure to come in and audit U of L’s internal auditor. There were some issues that Auditor Hatchett wanted to review when he didn’t find anything in his first audit. He didn’t get that completed when he left office and Auditor Crit Luallen came in and finished that audit. As with any audit there were some good recommendations – some management recommendations made – but there was no fraud, no abuse, no criminal activities, and in fact, very few questionable expenditures by the former administration and Dr. Shumaker.
EL: U of L is designated as a major research university in Kentucky. In which areas is U of L focusing?
JR: There are four major areas of focus: the life sciences, logistics and distribution management, entrepreneurship, and early childhood education.
EL: U of L’s research efforts are under the control of Vice President for Research Nancy C. Martin. How are efforts to grow U of L research progressing?
JR: The University of Louisville really had a very small research base in 1997 and 1998. Today our total sponsored programs are over $100 million. In particular, we are very proud of the fact that our research funding in the last year grew 49 percent. It is certainly one of the fastest growth rates of any college or university. To be fair, we’re coming off a smaller base than most schools.
Our NIH funding, depending on how you measure it, is the first- or second-fastest growing of all the institutions. Again, we’ve had a small base and again, we’ve been very focused in the life science area and putting a lot of emphasis there. For example, funding in our cancer program in 1997 was around $300,000 a year; today it’s well over $35 million.
EL: How helpful has Kentucky’s congressional delegation been in getting federally funded research dollars?
JR: Most of the grants are competitive. In our congressional delegation, Sen. Mitch McConnell and Rep. Ann Northup have been extremely helpful in getting U of L funds to build our research infrastructure – space, equipment. It’s like a great basketball coach. You can recruit the greatest basketball coach in the world, but if he doesn’t have a good arena, good practice facilities, if he doesn’t have all those things it’s going to be difficult to be successful.
So, we’ve had “Bucks for Brains” at the state level to help us recruit the best talent, but that talent needs start-up packages – they need the best research space, they need other kinds of support like clean labs and so forth – the clean lab that’s going in our new research facility here on campus was financed by Sen. McConnell through an earmarked appropriation. Over the last five years Sen. McConnell has brought in over $100 million to U of L in federal earmarks and that has really helped us jump start our research infrastructure.
EL: How closely does U of L work with Metro Louisville, Greater Louisville Inc. (GLI), and major corporations in Louisville? Can you give an example of how government, academia, and business are collaborating for the betterment of Louisville?
JR: We have extremely close partnerships. One of the organizations that has been put together – before I got here – was the Louisville Medical Center Development Corporation (LMCDC). That’s Metro Louisville, GLI, Jewish Healthcare, Norton Healthcare, the University of Louisville, and we’ve since added Jefferson Community College as a partner. We have a strategic plan to build the life science industry in our community. There are five success factors in that plan. The mayor’s responsible for taking the lead on one success factor, U of L’s responsible for taking the lead on several of the success factors, GLI’s responsible for taking the lead in one. We work very, very closely together – GLI, the government, U of L. We’re recruiting other partners into the Louisville Medical Center Development Corporation – banks, other businesses, Bill Street, who’s retired from Brown-Forman.
EL: Could you say that your goal for LMCDC is to create more jobs in medical services?
JR: We would define it a little more broadly – it could be pharmaceuticals, bio-tech companies, spin-offs from some of our research, it could be in the hospitals, it could be medical related, it could be health care support services – of which right now there are 238 companies in Louisville/Jefferson County that are part of what we call the Health Enterprises Network. It’s all about increasing jobs, increasing economic opportunity. When you’re dealing in the life science and the health care industry, it’s not only that economic importance and economic opportunity, but it’s improving the quality of life through education programs, quality of care, and having access to the best and newest drugs. We probably have eight to 12 different drugs that are in various phases of clinical trials at our university.
EL: Another strong area at U of L is sports. How is your working relationship with Director of Athletics Tom Jurich?
JR: I inherited him. I re-wrote his job description. He is now the vice president of athletics and reports directly to me. He’s part of our senior leadership and management team, attends all of our leadership meetings. Athletics is important to the University of Louisville, it’s important to this community. The polling that we’ve done statewide indicates that people recognize and respect the University of Louisville for its medical program, medical school, and athletics program. We’re trying to use our medical program and our athletics to help us build the whole academic focus of our university.
Athletics can open a lot of doors for us with donors. The athletics program and the progress it’s been able to make have allowed U of L to change conference affiliations and move from Conference USA to the Big East. The Big East takes U of L into new markets that are important for fund raising, alumni relations, student recruiting. The schools in the Big East are truly outstanding academic schools and the kind of schools with which U of L wants to be affiliated. We have a theme here that’s we’re one university. Athletics is helping U of L achieve its academic mission.
EL: How did you enjoy the recent UK-U of L basketball game in Freedom Hall? What advice did you offer Rick Pitino after UK’s miracle save in the last four seconds of the game?
JR: As U of L president, I don’t micromanage the English program, the basketball program, or any other program. It was a great game. It was a showcase game for the state of Kentucky. What more could you want than a game that comes down to the last six-tenths of a second? I wish U of L had won; we didn’t win. If losing that game was my only problem, I would be a pretty lucky person.
I’m very proud of our basketball team, very proud of our student athletes. We’re working very hard on their graduation rates, improving their academic performance, and making sure that every student athlete that comes here has the opportunity to be academically successful. Knock on wood, it could all change tomorrow, but U of L has a commitment to gender equity, to financial integrity within our athletic program, to playing by the rules, and to making sure that our students are successful. That’s all a president can ask for.
EL: U of L’s football coach, Bobby Petrino, just signed a new $1 million contract.
JR: Bobby Petrino has been a great asset to this university. He’s a person with great values. He’s committed to the football players and his students. Bobby has brought the right set of values to our institution and to our football program. It’s the first time ever U of L has been ranked in the top 10 in football. We’re three points away from perhaps being in the bowl championship series. We’re delighted Bobby is staying. But, I’m an economist: I understand markets and I understand that every year there’re going to be openings, be it Florida, LSU, Notre Dame and Bobby is going to be a very attractive candidate to all of those schools.
EL: When you were Gov. Patton’s state budget director you experienced running the government without a budget. What advice would you give Governor Fletcher?
JR: The state needs a budget. We’ve got to have a budget. The most stressful thing I did in my professional career in Frankfort was try to work through the issues of what we would do without a budget. The constitution says that the General Assembly has the responsibility for making appropriations, and in 2002 Kentucky didn’t have a budget. The question was, “What do we do? Do we shut down government?” That would have had the most profound political impact. “Do we try to operate only essential government services?” But when we were doing our research we found an old court opinion from the 1930s that said that the state fair was an essential government service, so how do you define essential? It’s like on snow days when they said only essential employees show up for service, you knew I was going to show up everyday. I didn’t want anyone to think that I wasn’t essential. We made the decision in 2002 to operate the government without a budget. We thought that would be resolved once and for all. It wasn’t – we’re now budgetless two out of three times. The more it happens it sends shockwaves to Wall Street. I think it’s a bad precedent for the state.
EL: Budgets for state universities have been cut in recent years due to economic conditions and the failure of the General Assembly to pass a budget and/or tax modernization. Could you comment on these areas – legalized gambling, higher gasoline and cigarette taxes?
JR: First on the tax side: Our tax system is outmoded, it is outdated. It was designed for an agricultural and manufacturing economy. Today we live today in the “new economy.” We need to recognize that.
The particular nuances of what that tax modernization looks like needs to be vetted through the political process. I personally support tax modernization.
As part of that, there needs to be discussion about the cigarette tax. I proposed back in 1990 when I was the chief architect of the tax package that supported KERA, taking the cigarette tax from three cents a pack to 10 cents a pack. We couldn’t get that done then. How much Kentucky can increase the tax will depend on border sales and the elasticity of sales. A portion of any cigarette tax increase should be earmarked to health care programs, including cancer research programs at U of L and UK.
In terms of the gasoline tax, I’m probably more removed from that. I don’t keep up with the road fund.
Gaming. The facts are people can gamble if they want to; they can drive across the river. We already have gambling in Kentucky: the lottery and para-mutual betting. The expansion of gaming could help with the state’s revenue issues and problems.
EL: How is your working relationship with Gov. Ernie Fletcher and his administration?
JR: Gov. Fletcher understands the role of higher education in the “new economy.” We’ve been fortunate to be able work together on a number of projects. We traveled together to Vacaville, California to visit a company called Large Scale Biology (LSB) whose biomanufacturing division is located in Owensboro. The University of Louisville has a research agreement with LSB. UK has a relationship with LSB. The governor wants to see companies like LSB have the opportunity to grow and be successful in our state.
We’ve had the opportunity to work with the governor on venture capital, seed capital, other kinds of initiatives. The governor created a life sciences consortium; U of L has representation on that. We invite the governor to Louisville every chance we get. Gov. Fletcher and I knew each other when he was in the General Assembly, we had the opportunity to work together some when he was in Congress. As a doctor, as a physician and as an engineer, there’s no question that he gets it in terms of the “new economy.”
EL: What assistance do you receive from Kentucky’s Council on Postsecondary Education (CPE) and its president, Tom Layzell? How closely do you work with him?
JR: We have a very close working relationship. Tom has come during a difficult time – not a lot of money. Early on after the reform, rightly or wrongly, CPE sort of developed the reputation of not communicating openly with the campuses, not explaining all their policy positions. Tom has brought in a whole new attitude of dialogue, openness to the Council on working with the presidents. I believe each of the universities would like to see CPE be more focused on its advocacy role and less focused on its regulatory role.
EL: Do you have a closing comment?
JR: U of L is a great university with a great history and tradition. It goes back over 200 years. It was a private school up until about 35 years ago. Our goal is to build on its history and tradition and make it better. It is key to not only the economic success and quality of life success to this community but to the whole state. I really don’t feel I’ve got the patience, the skills, the intellect to be president, but I do think it’s important during this difficult fiscal time for me to keep U of L moving forward and making progress.
Ed G. Lane is chief executive of Lane Consultants Inc. and publisher
of The Lane Report.
edlane@lanereport.com
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