MARYLAND HOUSE APPROPRIATIONS
SUBCOMMITTEE ON EDUCATION AND ECONOMIC DEVELOPMENT
HEARING ON UNIVERSITY SYSTEM OF MARYLAND OFFICE BUDGET
FOR FISCAL YEAR 2006
FEBRUARY 3, 2005
Testimony of USM Board of Regents Chairman Clifford M. Kendall
Mr. Chairman and members of the Committee, I am pleased to join you today to testify on behalf of the University System of Maryland Office's budget. Yesterday, Chancellor Kirwan and I joined you to talk about the entire system. We discussed the challenges we face in terms of funding, enrollment, and maintaining our high level of quality; and we talked about how important the Governor's proposed budget increase will be in helping us address those challenges. Today, I want to focus on the vital role the system office plays in coordinating our efforts and driving our success.
I think I can best illustrate this point with two examples . . . our Effectiveness and Efficiency Effort and the new USM Hagerstown Center. I know Vice Chancellor Vivona will touch upon these issues as well in his detailed testimony.
EFFECTIVENESS & EFFICIENCY
In recent years, both the Governor and the Legislature have made it clear that it was vital for the USM to do all within our power to be cost-conscious. I am proud to say we have heeded this message.
Last year, for example, we took actions in cost avoidance, cost savings, non-tuition revenue generation and the strategic reallocation of resources that had a total value of $65 million. And we are building upon this success with our current E&E Initiative, which aggressively uses our size and the system as a whole.
For example, as a system we have renegotiated system-wide with PeopleSoft, consolidating multiple contracts into one and establishing maintenance caps, safeguarding our institutions from excessive costs. All in all, this action will save us millions of dollars over the next 10 years, while gaining access to $10 million-worth of new software at no cost.
We are also using the leverage we have as a system to purchase electricity at more competitive prices, resulting in significant savings. The total value of E&E next year is estimated at more than $26 million. The fact that E&E is driven by the System Office is what has made it such a success.
The University System of Maryland at Hagerstown, located in the historic Baldwin complex in downtown Hagerstown, opened its doors to students just last month. Currently there are 340 students enrolled at the Hagerstown Center. The facility currently hosts selected academic programs from Frostburg State University, University of Maryland, Baltimore and University of Maryland University College.
From beginning to end, getting this center up and running has been a team effort, with the business community, elected leaders, the education community, and even the local media, all working toward a common vision. We see the University System of Maryland at Hagerstown as a hub of teaching, learning, and economic development that will have an enormously positive impact on Hagerstown, Washington County, and the State of Maryland.
None of this would have been possible without USM Office staff leading the team. I can't say emphatically enough how the coordination, leadership, and hard work of the System Office made last month's opening possible.
Turning now to the single Legislative Analyst Recommendation for the USM Office:
DLS Recommends that the USM Office reduce general funds by $113,409 for administrative initiatives.
The USM is in transition from the old way of efficiency efforts to the new Regents' E&E. In the past six to seven years, efforts were institutionally driven. Where we saw successes at one institution, we encouraged others to follow suit (i.e. procurement card, pouring rights, equipment donations).
Our consultant and our own analysis showed the benefit of system-coordinated initiatives. One example is the most recent PeopleSoft contract. Now we find ourselves looking at bigger issues that require coordination such as procurement, technology, buying cooperatives for specific commodities, etc.
Even as the USM office has reduced staff significantly, it has had to absorb major projects such as public/private partnerships, collective bargaining, coordination of Regional centers and the Regents' E&E initiative. Any further reduction will compromise the progress of the E & E initiatives.
For example, the System Office needs an administrator for our Maryland Educational Enterprise Consortium (MEEC). MEEC is a leveraged purchasing consortium for IT software and hardware - which will benefit all state of Maryland education (including K-12, public, private and federal). We respectfully submit that further reductions in staffing and funding levels of the USM Office would be counter-productive and harmful to the long-term best interests of the University System and the students we serve.
Vice Chancellor Vivona will now speak a little more about the other functions of the USM Office and the specific budget recommendation.