Chairman Kendall:
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Tuition and fees is the topic of discussion
today and the only topic. This is a
very special meeting - one that lots of time has been devoted to. I would ask the Chancellor at this time
to make a statement.
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Chancellor Kirwan:
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"The
actions the Board will be asked to take today are intended to address, as
best we can, budget reductions to USM institutions that can only be described
as disproportionate, harmful and short-sighted.
"They are
disproportionate because they are much
deeper than cuts assigned to other state agencies. This time last year, our
state appropriation was $868 million. With the latest spending cut of $40
million, our state appropriation for this year stands at $746 million. That's
a $122 million -- or 14 percent reduction -- in state support in one year.
Funding for the USM is only 7.5 percent of the General Fund, yet we have
taken almost 20 percent of General Fund cuts. Our cut is almost three times
greater than the average state agency cut. In addition, the cut is
disproportionate in relation to the way other states have treated higher
education. Two days ago I read a report in the Chronicle of Higher
Education that said the national average for reductions to higher
education this year is 5 percent. As I just mentioned, our cut is 14 percent.
Clearly, other states have found a way to buffer the economic downturn's
impact on higher education. Maryland has chosen a different path. It has
chosen to target higher education for reductions.
"I also
said that these cuts are harmful and they are, on multiple levels. As a
result of the accumulated cuts, we must eliminate close to 800 FTE positions
across the System including over 400 layoffs. First and foremost, these
actions are devastating on a personal level. The Board needs to know that our
institutions have gone to great lengths to provide compassion and support for
these valued colleagues who will be losing their positions. In particular, we
have launched extensive outplacement and other counseling services.
"At the
institutional level, these position eliminations erode the quality of our
campuses. Class sizes will grow, courses will be cut and support services
will diminish.
"The cuts
are also harmful because students are being required to pay tuition at a
level they could not possibly have planned for when they began their studies.
Some may have to drop out of school. Many will have to take part time jobs or
expand the number of hours they already work. This will significantly impact
their time to degree and the quality of their learning experience. Here again
our institutions have stepped forward to try and help as best they can. They
have increased significantly their financial aid budgets to assist our
neediest students through these difficult times.
"Finally,
Mr. Chairman, I said these cuts are short-sighted. The engine of economic
growth and the basis for a high quality of life in the 21st
Century is high quality higher education. At present, Maryland is blessed to
have a System of higher education that, after decades of effort and
investment, is regarded as one of the nation's best. It should be seen as a
precious treasure that insures a bright future for our state, not as a
balancing account to solve or state's fiscal problems. We anticipate a 25
percent surge in the size of high school graduating classes over the next
eight years. These students know that the key to success in the knowledge era
is a college degree. The question our state leaders must answer is: How will
it be possible for this rapidly expanding volume of young people to achieve
their higher educational goals and lifetime dreams? Our state is on a
collision course with two contradictory policies. On the one hand, we are --
appropriately-- priming the educational pipeline by making the necessary
investments to encourage more and more K-12 students to prepare for college,
while at the same time we are destroying the ability of our universities to
expand capacity and maintain their present high level of quality. Something
will have to give and the clock is ticking.
"I refuse
to believe that our present path is one that the citizens of Maryland want us
to travel. We must redouble our efforts to inform our elected officials and
the general public of the dire consequences that will result if the
debilitating cuts we have received are not reversed. I want the members of
the Board to know that I intend to lead such an effort, beginning with my
presentation to special sessions of the House Appropriations and the Senate
Budget and Taxation Committees meetings this coming Tuesday. We will call
upon our friends and colleagues within and without of the System to actively
seek every possible opportunity to talk to editorial boards, go on television
and radio talk shows, speak to civic associations and other groups, visit our
elected officials, and write our alumni and friends. This will require and
intensive effort. But nothing could be a better or more important use of our
time.
"Thank you,
Mr. Chairman, for allowing me this opportunity to convey my alarm over the
long term damage that is being done to our System institutions and to our
state's future through these debilitating cuts in our state support and to express my intention to seek
support from all possible quarters to reverse these harmful decisions."
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Chairman Kendall:
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Today we have a large group of interested
persons, three of whom have requested to speak. They are: Mary Platt, Gary Kane, and Gillian Ketsal. They will each be permitted 3 minutes to
address the board. No one else from
the general audience will be permitted to speak. There was an open meeting the other week [Finance Committee]
and Chairman Nevins invited people to speak at that time and contact him
afterwards. Many have since written. We'll now hear the report of the committee
from the Finance Chairman.
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Regent Nevins:
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Thank you to those members who attended the
last meeting. I would also like to
thank my colleagues for their due diligence and hard work. There are two items for consideration
which passed the committee. The
first is a resolution that was offered by Regent Florestano.
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"Be it RESOLVED that the University System
of Maryland Board of Regents urges the Administration of the State of
Maryland to release the hold on $40 million in general fund reductions for
the FY 04 USM appropriation."
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Regent Nevins:
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I move the amendment.
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Admiral Larson:
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Second.
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There was no further discussion. The motion carried (majority).
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Regent Nevins:
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The second item is tuition and fees. I believe that the board is between a rock
and a hard place. On one hand there
are tuition increases and on the other you have programmatic cut backs and
personnel layoffs. I think the committee
has chosen a very good response. This
will continue our march toward higher quality and eminence. In advance of introducing the motion, I
would like to read the following statement into public record. This is to be considered a preamble, not
part of the resolution.
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Statement on Tuition Increases
And Personnel Actions
"The
Board of Regents is aware of the difficult position that all members of the
University System of Maryland family, including students, find themselves in
as a result of the successive rounds of budget cuts we have endured. The action we take today is necessary to
prepare for the anticipated additional $40 million general fund cut to our
budget. While we intend to do
everything possible to avoid this or any further cuts to our budget, we must
fulfill our fiduciary duty to manage the System institutions and respond to
the Secretary of Budget and Management's request that we reserve $40 million
from our FY04 General Fund appropriation.
"As part of our efforts to avoid additional
budget cuts, the Board recently adopted a Resolution asking State
policymakers to restore general funds to the University System of Maryland
and recognize public higher education as an urgent State priority. If our efforts are successful, and these
cuts do not occur, the Board is committed to reevaluating the tuition
decisions we make today and the personnel actions the institutions have been
forced to take in response to our fiscal situation."
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Regent Nevins:
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I move the tuition rate adjustments as
presented.
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Regent Hug:
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Second.
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Chairman Kendall:
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We will now hear from the three persons
mentioned earlier.
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Mary Platt:
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I worked at UMCP for 14 years. Layoffs took place on May 1. As of July 29, we have no paychecks, no
health insurance, nothing. Seven other
of my colleagues in OIT also lost their jobs. We hear rumors of hundreds and hundreds of layoffs. We want to address the board and let them
know what is happening to the staff who have been laid off. We ask the Board to protect all of our
state universities. While I
appreciate these few minutes to speak, I don't feel as though it's had any
real impact. We have coworkers and
friends with families who will lose their homes. The people who have the power to do something, do nothing. Your decisions clearly show your
priorities - construction, cars, free housing. Do you have any idea of the effects of layoffs on
families? Positions being paid
$230,000 a year are being created. I
could go on and on, but this is not the place do it. The place is at the bargaining table. Know where bargaining is going? Nowhere.
Do not enact the $40 million cut from the Governor. Send it to BPW where it belongs. Instruct the University to stop
layoffs. Respect the collective
bargaining law. Make raising tuition
and laying off staff the last resort.
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Chairman Kendall:
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Thank you.
Gary Kane is next. I remind
you of the time limit.
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Craig Newman:
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I am here to speak instead.
(It was determined that a substitute is
permitted to address the board.)
We [AFSCME] have a wealth of knowledge from
working here in the System. We have put
forth some proposals on the table instead of the cuts and tuition
increases. The administration will
not even talk about our proposals. We
are the backbone. Your negotiators
tell us they will not talk about our proposals. We gave them our proposals on May 7. This is not the way a family should operate. We would much rather work cooperatively
and not make an antagonistic situation.
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Chairman Kendall:
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Thank you.
Gillian is next. We have
circulated your letter.
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(A copy of the letter is on file in the Office
of the Chancellor.)
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Gillian Ketsal:
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I am an undergraduate with several ideas. Why not rent out unused space during the
summer. Why is the Rossborough Inn
still open? Why not have private
investors? Why not go to IKEA and ask
them to donate furniture to the university?
Utilize private companies.
Coke made a huge donation to Duke. [Lists many other corporate
donations to universities and colleges.]
We cannot continue to rely on public funds any longer. Assign this project to a business school
group. They would come up with
multiple solutions. Utilize resources
outside of the school.
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Chairman Kendall:
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Thank you.
Any other discussion?
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Regent Wood:
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I intend to vote in favor of the motion, but
do so with expectations that there will be a full review of need-based aid in
the fall and that the E&E workgroup will do an operational review.
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Admiral Larson:
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This is a difficult decision. We have some funding increases, but they
only brought us back to/near the level at the last recession. I know that once we've already taken the
cuts we've taken, that there is not much discretionary spending left to
cut. I know this from my experience. We are trying to balance access,
affordability, and quality, but seem to be losing on all three. Regarding access, may have to cap
enrollments. Regarding affordability,
we are balancing the books on the backs of students when we raise tuition. The middle class does not qualify for
need-based aid. Regarding quality, we
will start losing programs. As regents, we try to maintain quality via
tuition increases and need the layoffs to meet the budget cuts because that's
all that is left. I will vote for
this motion, because I see no other alternative at this time.
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Regent Rosapepe:
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I am about to answer that with an
alternative. But first, have a
question about the financial aid figures provided on the handout. What is the base?
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Vice Chancellor
Vivona:
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92,000 undergraduate and graduate
students. Keep in mind that aid is
usually directed to full-time students.
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Regent Rosapepe:
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I would like to thank the Chairman of the
Finance Committee for very open talks and consideration of setting the
rates. I offer the following
resolution as an alternative proposal.
"I
move that the Board amend the Finance Committee's FY 2004 tuition
recommendation by:
-
replacing its proposed
rate schedule with the one above (and detailed in the attachment); and,
-
directing the
Chancellor to refrain from establishing a $40 million reserve and from
cutting $20 million from campus budgets unless there is legally binding
action requiring it."
(Regent Rosapepe's proposal is on file in the
Office of the Chancellor.)
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Regent Rosapepe:
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There are two elements to the committee's
proposal on setting tuition rates.
The first is the set of cuts made during the legislative session. The second is the $40 million reserve fund
set aside. The state has a surplus of
$81 million, according to the state budget office. The $40 million cut to the USM is in a budget of the state that
is not in need of cuts. My proposal
is to strip out the rate increases associated with the establishment of the
$40 million reserve fund (referring to the June letter from DBM). Question - should we enact tuition rates
that are in line with the actual approved budget? I seek your support for my amendment.
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Regent Pevenstein:
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I would differ with Regent Rosapepe's
conclusion, that holding funds aside in a reserve fund is illegal. At the Finance Committee, we heard from
the Office of the Attorney General representative. We have heard the practice explained by Governor Mandel. We heard Governor Schaefer state publicly
that the Governor is within allowable bounds.
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Governor Mandel:
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Once the budget is passed by the General
Assembly, it's law. It's a General
Assembly budget. It they want to
change that figure, then 6 months down the road that money is not there, then
what will the system do. If that
money is spent now, the University System will be in worse trouble than it is
now. I have never seen a Governor
inherit a deficit of such magnitude.
The budget that came back to the Governor was not a balanced
budget. Once the bills were vetoed,
the budget was not actually balanced.
Federal aid was the only thing that kept us constitutionally balanced. We do not want to be stuck with a
resolution that will bury us six months from now.
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Admiral Larson:
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If we lose this bet, six months from now will
would be looking at twice the number of layoffs and doubling the tuition rate
increases. The only prudent thing to
do is plan now for the cut. I would
vote against the Rosapepe amendment.
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Senator Tydings:
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I address my comments to the Vice
Chairman. We cannot play Russian
roulette on whether or not the $40 million will be restored. I have the greatest respect for my fellow
regent, Rosapepe, but we cannot tie the presidents' hands behind their backs.
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Regent Shockley:
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This is my first meeting and I appreciate the
opportunity to speak. I support the
Rosapepe amendment. I did not realize
until the last meeting that this [$40 million] was not truly a cut. If we take a preemptive cut, then we will
show that we can surely live without this funding. We cannot. Personal
incomes do not rise fast enough to cover these types of increases. Families cannot plan or prepare. If we don't pass this now, we will have
extra time to lobby the Governor further of higher education as a priority. I fully support the amendment.
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Regent Mitchell:
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We need to face reality. I have to go along with the rest of my
colleagues on this board.
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Regent Florestano:
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I want to support the Rosapepe resolution, but
I just don't think it's the wise thing to do. We have no choice as a board.
The Governor [of Maryland] is the most powerful governor in the
U.S. The Comptroller is on board with
the establishment of this reserve fund.
We have done the "early cuts" - travel, vacant lines. What's left is people and tuition.
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Regent Finan:
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I respect Regent Rosapepe's position. However, there is an uncertain consequence
down the road of ignoring this request from the Governor.
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Regent Hug:
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I move the Rosapepe amendment for a vote.
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Regent Florestano:
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Second.
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The amendment failed.
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Regent Rosapepe:
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I move that the language read by Regent Nevins
as a preamble be added to the [original] resolution.
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Regent Florestano:
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Second.
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Regent Nevins:
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I will accept as a friendly amendment; no vote
is necessary.
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Regent Pevenstein:
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Regarding Regent Wood's comments on E&E, I
look forward to working on that committee and reviewing the expense side of
the equation.
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Regent Rosapepe:
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I will vote against the resolution. For the first time in history, student and
parent investment will be greater than the state. We will now have quality as our first, second, and third priorities
instead of balancing quality with access and affordability. A 21% increase is too much for the middle
class.
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Regent Finan:
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I call for the question.
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The motion carried (majority).
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Chairman Kendall:
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I want to apologize for not introducing our
new regents. (Introductions of
regents Shockley, Pevenstein, Mitchell, and Governor Mandel.) I would also offer some closing remarks.
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Many
people have participated in the discussions related to how the University
System should absorb the dramatic budget cuts that we face. Many suggestions and observations have
been made which have been helpful to us, the staff, and the System
administrators.
As chairman of the board I tried to give
everyone an opportunity to present their facts and express their
opinions. I might add that the
Chairman of the Finance Committee, David Nevins, did a wonderful job of
gathering information, letting everyone participate in the process, and
guiding the Finance Committee to their recommendations to the Board. The
process seemed to work quite well.
However, there were a few statements that were
made during the committee and board meetings that did not accurately reflect
the situation and could have been construed as inflammatory. Fortunately, during the discussions no one
over reacted and our deliberations proceeded in an orderly manner.
Now that the decision has been made on what
the tuition charges will be I think it is important that we address
significant false impressions that may linger because of a few erroneous
statements.
First, during the discussions there was a
claim made that the Regents did not care about students and the budget crisis
was being used as an excuse to raise tuition charges more than
necessary. Nothing could be further
from the truth. I have seen every member of the Board agonize over every
dollar that tuition is being increased and I can assure you that there is
deep concern about how these increases will affect access for current System
students and future students who wish to enter institutions in the University
System of Maryland.
Second, others stated that there is not enough
concern for the faculty and staff and that the furloughs and layoffs
contemplated should not take place.
Again, I know that the university presidents, the System Administration
and the Regents have agonized over the necessity to eliminate positions and
layoff staff in order to avoid unacceptably high tuition increases.
Third, I have seen
articles that state additional fees or staff reductions would not be necessary
if the System would just operate more efficiently. Unfortunately, I can tell you from my personal experience
running a rather large organization, that there is a limit as to how much
savings can be produced through increased efficiency, especially in the time
frame within which we have to make these cuts.
The decision on tuition fees has been made and
now it is time to work together and develop ways that will enable each
individual institution to continue in its quest to be the best among its peer
group. It is incumbent on us all to
put our differences behind us and get on with the business of making this the
finest system of higher education in the land.
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Chairman Kendall:
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Motion to adjourn.
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Second.
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The meeting adjourned
at 2:20 p.m.
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