Wednesday, June 23, 2004


Good morning. Today I issue my second annual report to the University System of Maryland Board of Regents. Before I do so, I want to say again what a tremendous honor it is for me to serve in this capacity. Patty and I have no doubt that returning "home" was absolutely the best decision we could have made.

All things considered, I can say that -- despite our continuing fiscal challenges -- this past year has been very productive for the University System of Maryland. A year ago we were in the midst of a 14% reduction in state support, double digit tuition increases, and a significant number of staff layoffs. Fiscal challenges are still very much on everyone's mind, and next year's tuition increases are sizable by historical standards, but our situation has clearly stabilized. Remarkably, despite the challenges of the year, we served more students, our faculty continued to receive impressive awards, contract and grant totals are at record highs, and students are beating down the doors to attend our institutions.

Our presidents deserve an enormous amount of credit for the leadership they have shown in managing their institutions through one of the most severe budget situations in the nation and still advancing the quality and the contributions of their institutions. I also thank the members of the Board of Regents for the outstanding leadership you have shown during this difficult period. I know I speak for all of the presidents when I say that your leadership, support, advice, and advocacy have been invaluable for our success in these challenging times.

Obviously, given the size of our System, the many accomplishments that have occurred, and the time allotted for my comments, I can not do justice to the many significant advances that have occurred this year. I will give a few highlights.

National Rankings: Several national organizations and publications have recognized the excellence throughout the University System:

U.S. News & World Report magazine ranks the University of Maryland, College Park, the 17th best public university in the nation, and the university has 70 programs overall in the magazine's Top 25 rankings (graduate and undergraduate).

The University of Maryland, Baltimore County, has been named a "Hot School" by Newsweek and has been ranked in the "Top Tier" of national research universities by the Carnegie Foundation.

Both Salisbury University and Towson University were ranked in the U.S. News & World Report Top Tier for public master's universities in the North.

Every professional school at the University of Maryland, Baltimore, had at least one program receiving a top-10 ranking from U.S. News &World Report

Black Issues in Higher Education ranked Bowie State University 13th nationally in graduating African Americans with master's degrees and FIRST nationally in graduating African Americans with master's degrees in computer science and information sciences.

Prestigious Awards: Along with these rankings, institutions and faculty members across the System have been singled out for accolades:

University of Maryland University College has been named the recipient of the International Council for Open and Distance Education's 2004 Prize of Excellence for "the highest possible excellence in the fields of open, distance, virtual, and flexible learning." The award is the top international honor available to recognize excellence in distance education.

Coppin State University is one of three historically black institutions awarded a grant of $650,000 over five years from the Gates/Marshall Redesign Program. This national K-16 partnership program seeks ways to "transform" high schools into smaller, more effective "learning communities". In addition, Coppin's McNair Honors Program received a four-year, $1.1 million federal grant, the largest McNair grant to any Maryland institution.

The University of Maryland Eastern Shore was runner-up in the Honda Campus All-Star Challenge, an academic competition between students at America's Historically Black Colleges and Universities. And President Thelma Thompson was honored recently as one of Maryland's Top 100 Women by the Daily Record.

University of Maryland Biotechnology Institute President Jennie Hunter-Cevera received the 2004 U.S. Federation for Culture Collections / J. Roger Porter Award at the 104th general meeting of the American Society for Microbiology in New Orleans.

Research Productivity: The institutions comprising the University System of Maryland have also emerged as leaders in R & D, with system-wide research funding soaring from $200 million in 1990 to $900 million today.

The University of Maryland, Baltimore, is the lead institution in the Regional Center of Excellence in Biodefense. This effort, funded by a five-year, $42-million grant from the National Institute of Allergy and Infectious Diseases, also involves Georgetown, Hopkins, and several other prestigious institutions.

The Institute for Human Virology, part of the University of Maryland Biotechnology Institute, received $64 million in federal funding for expanded AIDS-related efforts.

The University of Maryland, College Park, will jointly host a new Center for Multiscale Plasma Dynamics with UCLA, funded by the Department of Energy. The center will focus on solving key problems in plasma physics, particularly those related to the development of fusion energy.

And with university-affiliated research centers either in place or under construction at the University of Maryland, Baltimore County; the University of Maryland, College Park; and the University of Maryland, Baltimore, this lab space and office space will further strengthen our ability to fuel Maryland's position of leadership in the research sector.

Community Outreach: USM institutions are also having a real and meaningful impact in their communities and across the state:

The volunteerism and community service programs at Frostburg State University have brought the university recognition from the national Corporation for Public Service. Approximately one-half of all FSU undergraduate students engage in community service. That is a remarkable statistic.

The University of Baltimore is strengthening its position in the social, cultural and intellectual life of Baltimore. As the new student center is constructed, I know it will be more than a campus facility, but also a vehicle to bring arts and cultural events to campus for the entire community to enjoy.

The work being done by the University of Maryland Center for Environmental Science, which has stepped forward as a major partner with Governor Ehrlich's administration, will benefit all Marylanders in efforts to reduce nutrient ruin-off, clean up the Bay, address the oyster population decline, and a host of other environmental actions.

And virtually every institution in the System is actively involved in our K-16 effort to make sure the students who will be attending our institutions are prepared for the rigors of higher education. We are working with State Superintendent Nancy Grasmick to raise standards and stress assessment and accountability. And we are in the schools, providing instructional assistance, mentoring, and enrichment to help make these students "college-ready."

I could continue on for the entire length of my report, citing achievements, recognitions, initiatives, awards, and grants received by USM institutions. Clearly, we are a System of excellence. And it is as a system that we will build upon this excellence and overcome the challenges facing public higher education in Maryland.

Value of Operating as a System: Every day we see the tremendous value that comes from operating as a system:

Under the leadership of Board Chairman Cliff Kendall, the Effectiveness and Efficiency Task Force is taking steps to reduce costs. For example, we use the buying power of the entire system to create deep discounts on purchases of computer equipment, software and other goods and services. We estimate that this past year a system-wide agreement with Microsoft saved us more than $15 million in software purchases. Our new partnership with Accenture will further advance these efforts.

At the Universities at Shady Grove, eight separate USM institutions come together under one roof to deliver low-cost access to a range of different USM programs selected to meet high student demand in areas such as biosciences, information sciences, business, nursing, and education. And soon the Educational Center at Hagerstown with replicate that model of success.

In partnership with Maryland's community colleges, the USM is providing access to our institutions to community college students. People are almost always amazed when they learn that students who complete an AA degree are guaranteed admission to the System institution of their choice.

And we most certainly saw the value of working as a system during the recently completed legislative session . . . one of the most successful sessions in the System's history. Both the operating and capital budgets were essentially approved as drafted by the governor, with no additional cuts to the System's operating budget and one of our largest capital budgets ever. All three of our key initiatives recommended by the Public Corporation Workgroup, which was chaired by Regent Orlan Johnson, passed. In fact, these three billsthe Program Approval, the Common Trust Investment, and the Autonomy billsall passed unanimously in both houses. I once again express my thanks to Governor Ehrlich and the members of the General Assembly for their support and commitment to make higher education a priority once again.

Meeting the System's Challenges: It is imperative that we continue working together to address the numerous challenges that yet lie ahead.

First, we must begin preparation of the FY 2006 budget. Regrettably, the financial picture remains murky and uncertain. When Governor Ehrlich vetoed the tuition cap legislation, he also expressed a desire to provide additional funding to higher education in FY 06, which, of course, was welcome news. Recent stories coming out of Annapolis, however, make that seem less likely. It has been reported that the administration is planning significant budget cuts throughout state government. And while higher education has been exempt from these reductionswhich we appreciateit does not present the picture of a fiscal environment where there is reason to be optimistic about a significant infusion of new General Fund revenues.

Compounding these fiscal challenges, as you know, is the fact that we are facing a sharp surge in enrollment demand. Over the next several years we will see the "baby boom echo" reach college age. We can expect an increase of somewhere between 20% and 25% in high school graduates between now and the year 2012. Moreover, laudable efforts such as the Thornton Imitative seek to insure that a greater percentage of individuals will be able to move on to college, so the 25% demand estimate could prove to be conservative.

These twin pressuresinadequate state support and rising demandwill force us to make additional difficult choices. Paramount among them is how do we meet both our obligation to the state and simultaneously protect the quality of our institutions . . . a level of quality that has been achieved through the extraordinary efforts of many and a level of quality that is now a source of pride for the entire state.

Obviously, it is incumbent upon us to continueaggressivelyour efforts to find cost effective, innovative ways to meet our responsibility to the state, to build our private fund raising capacity, launch a major capital campaign, and to seek other sources of non-state revenue.

The first annual Effectiveness and Efficiency report will be issued soon to members of the Board of Regents. It is important that we fully implement this initial phase of our efforts and launch phase two.

To address our concerns about access and affordability in these troubling times, we have assembled a Financial Aid Task Force, chaired by Maryland State Treasurer Nancy Kopp, to survey best financial aid practices; review current financial aid policies at our institutions; and develop strategies to enable us to provide access and affordability for all qualified students, especially academically capable students with the greatest financial need. I thank Treasurer Kopp for her service on this task force and look forward to acting on the report.

Parallel to the issue of enrollment is the need to expand capacity. The Board will soon be considering an enrollment management plan, which will distribute enrollment growth across the System to provide high quality educational opportunities in the most cost effective manner. Regional centers and the use of innovative approaches such as distance and on-line education can also help address the enrollment surge.

My point here is that there is much we can and must do within the System to address these challenges. But our state leaders also need to recognize that there are limits to out ability to manage our way out of these difficult fiscal times. There is a tipping point where the absence of state investment begins to erode quality and/or make college unaffordable for thousands of young people. At some point soon, the state must face up to the question: Does it want an excellent system of higher education? Dose it want to be a leader in the knowledge era with the kind of jobs and quality of life that are possible only with excellent higher education institutions?

Finally, within two years, the Office of Civil Rights returns to assess the progress we have made toward honoring the CR agreement. The $160 million facility constructing plan for Coppin State University that is now underway is an important part of this effort. But it is incumbent upon the state to thoroughly assess its effort to date and insure that it has met its commitment to the agreement. No one wants a situation where the OCR returns and finds the state has fallen short. In a larger senseon this, the one-year anniversary of the Supreme Court's ruling on the Michigan case and the 50th anniversary of the Brown Versus Board of Education rulingour efforts to promote inclusion and diversity across the University System are of vital importance. We can take great pride in the rankings just released by Black Issues in Higher Education, which cite UMCP, UMBC, UMUC, and UMB as national leaders in graduating minority students. Our success in this area should be considered a badge of honor for the entire System . . . indeed the entire state.

I will conclude my report with one final point. There is simply no question that with the leadership of this Board, our presidents, and the commitment of our faculty, staff, and students, we are managing these challenges extraordinarily well. We hold numerous top-tier rankings, we are an R&D powerhouse, we are graduating well-educated, highly-skilled students, we maintain our AA bond rating, and we bring tremendous benefits to our university communities.

In many respects, the future of Maryland is directly tied to the future of the University System of Maryland . . . not just educationally, but economically, socially and culturally. There are many reasons to be concerned about our abilityin the absence of increased state investmentto help our state realize its full potential. The good news is, with the dedicated and insightful leadership we have in place, we can take a great deal of pride in what we continue to accomplish. I know the will and determination is there to continue to push forwardno matter what the challengestoward our high aspirations for the University System of Maryland.

Mr. Chairman and members of the Board, this concludes my report.