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House Appropriations Subcommittee on Higher Education

May 3, 2010
Marquette, Michigan
Testimony given by Les Wong

President, Northern Michigan University

Thank you Representative Bauer, and allow me to offer you and members of the committee and your staffs a warm U.P. welcome.  I hope your experiences here in Marquette and at Northern Michigan University are worth the investment in time and energy to get here.  I also want to welcome my colleagues, President Glen Mroz from Michigan Tech, President Tony McClain from Lake Superior State University and President John Dunne from Western Michigan University.  I am fortunate to have an exceptional cadre of presidential colleagues.

We have provided written responses to the questions posed to us by Chair Bauer.  Let those serve as context to my comments today. I would like to do something different with my testimony today. We are facing incredible challenges and each of us (legislator, president, student, parent) has a perspective and an investment in the answer.  I thought it might be interesting and different if I posed three questions to the committee and then offer how those questions are being answered at Northern. 

 In taking this path, I'll be quite honest. My goal is to avoid any discourse about the budget.  We've seen enough of those charts and it seems as if the more we look at them the further we get from a healthy discussion about correcting the path we're on. I will do my best to not ask you for more money, but I may not be able to resist temptation. And third, I offer them in complete respect for the difficult work you do and will face in the months ahead.

We have taken these questions seriously at Northern and in our own way we have used these same questions to guide our own strategic activities at Northern. I won't ask you to turn in a term paper with your answers, but sometime in the future I wouldn't mind hearing your answers to them. 

1.  There is broad agreement across this state that a recovery strategy will depend on three legs in order to position Michigan for recovery and prosperity. How can Michigan find the right combination of restructuring, revenue reform and cost savings to position this state for prosperity?

Regarding restructuring, here at Northern, we have prided ourselves on creative solutions to the way in which we structure and manage work that ultimately maximize efficiencies. We have used technology (a state of the art wireless/WiMax/wired network) to conduct a vast majority of student business, instructional delivery and student support on line. The savings have been substantial. We have reduced the number of colleges, reallocated administrative positions to centralize key decision points, and we have established a planning process where strategy and positioning are linked to budgetary decisions. For the last 18 months, we have conducted a very open and transparent campus discussion to identify scenarios ranging from 2,4,6,8 10 percent cuts and beyond. Most importantly, the level of knowledge our students have of the road ahead reflects their engagement with what needs to be done to preserve the Northern experience. Northern remains one of the most efficient campuses by most measures. We receive less state dollars now than in 1998 while serving 1800 more students. It is a level of efficiency resulting from considerable internal restructuring. The hard work of my faculty and staff is unmistakable. Can more be done? I suspect.  But toward what end? 

While revenue may superficially translate to tuition, the committee and I know that it means much more than what you charge a student and their family. We remain accessible and affordable to our students. House and Senate Fiscal Agency analyses are clear in that regard. We remain the second-most affordable tuition of the public 15 and despite our location, we are the largest campus in the U.P., with enrollment gains this year and likely next year. serving as the region's community college function in addition to our baccalaureate and Master's degrees offers a broad array of educational and job readiness skills. Our price-value reviews tell us we have wide regional appeal as we are soon to become a campus where the majority of our students will be from downstate or out of state. 

But we have also taken to the idea of entrepreneurship with greater zeal throughout the university to augment tuition revenues with the express hope of keeping Northern's tuition among the best value-price propositions among our regional peers. Our mantra for 2 years now has been recruitment, retention, revenue and quality. The committee should bear in mind that our enrollment successes occur with the very students this state needs to succeed. Nearly 83% of our students receive financial aid of some kind.  ACT scores are mid-range and the large presence of first-generation students remains high. Our right-to-try philosophy has allowed many a forgotten student the opportunity to correct their path to success. This has complemented a surge in scholarship because of our new investments in undergraduate research (Wildcat Incentive Fund).    

In our written comments you'll read about our CORE initiative. Simply put, we are extending the knowledge base represented in our faculty and staff to promote a new level of interdepartmental entrepreneurship within Northern.    We are also linking CORE activities with local governments, non-profits and private businesses with the express goal of supporting and stimulating regional economic growth. 

We have heeded the cry of cost containment for a decade. Our annual expenditures have remained below inflation all of my 6 six years here if not longer. We are consistently among the most efficient campuses on a host of performance measures. We have retrofitted buildings rather than build new.  We have incorporated state-of-the-art energy strategies to maximize energy savings. We are about to roll out a space conservation/space consolidation room assignment strategy that will maximize building/energy use with classroom seat assignments. Students and employees are altering their behavior to be more "green." Computers and lights are being turned off, and we're putting less stuff into landfill. More and more of us are walking to work and using telecommunications to attend meetings.

We are a complex community, but we have shown how a university community can engage the difficult question of sustaining quality service in tough economic times by bravely engaging the three legs of revenue reform, structural reform and cost containment. How long can we keep going to the well? That leads to my second question.

2.  There remains considerable concern about rising tuition and accessibility in this economy. We at Northern share that concern. Despite the state's $1.7 billion funding gap for the upcoming fiscal year, how can legislators immediately support higher education as a critical tool to the state's economic turnaround - if it can't be done through additional appropriations, can it be done in other ways that will directly help Michigan's 15 public universities and their students?

It would be easy to say that we at Northern hope that the new governor and legislature not attempt to balance an entire fiscal year's budget with only half the year or less remaining when they assume office. The state's best help, aside from appropriations, is to make decisions that allow planning time. But no one's crystal ball has an answer to that one.  Perhaps the next level answer lies in understanding better what we face from our perspective. 

The strength of Michigan's public 15 is that we are all very, very different. Each President and each board understands their own issues best and makes decisions accordingly.  I can't and won't ever try to second guess what others should do let alone speak for anyone but me. But I find it more than ironic that the pressure on my Board of Trustees to make tuition decisions without knowing our state appropriation can be so high. The setting of tuition is a board policy matter and they set tuition. We make a recommendation to them based on our data about what is best for our institution and for our students--and prospective students. As state aid declines we need to look at other sources of revenue and budget cuts. We look at both just like the Legislature looks at both (tax revenue and budget cuts) and then makes a decision.  I would like to make the point that it is very, very difficult to make a recommendation to our policy makers, the Board of Trustees, without knowing what our state aid will be for the next school year. Making us and our Board do that is akin to you making a decision on what the state budget should be without complete information from the State Department of Treasury and the Budget Office. You would have a very hard time doing that without adequate, accurate and complete information and data from them. This is a difficult situation for all universities--it is in part "flying blind" without complete data on what is in front of you. With that said we will make a recommendation to our Board this summer with the data that we have at the time, even if we do not have a final number from you and the Governor. We are the second-lowest tuition in the state, and we will consider that as we do what is best and responsible for Northern and for NMU students. We will do what is needed and we will be responsible to make sure that our doors stay open at Northern, and that we continue to provide one of the top quality educational experiences in the Midwest. 

Across this country, the privatizing of public higher education creates considerable social and economic liabilities. The state is already seeing a disproportionate outmigration of citizens with baccalaureate degrees and higher. Michigan cannot afford to be the training ground of talent that other states will use to prosper.

3.  How will the Michigan legislature face the short-term budget crises while also attempting to position itself for the long-term return to prosperity?

Here at Northern, we've just finished a campus dialog about that very question.  After nearly two years of contingency planning, my campus became tired of planning. Understandable, since we are known to be do-ers (see our recent accreditation report). Recently, I outlined to the community and to our Board of Trustees, just this past Friday our two-step plan. Part one of this plan would be completed by June 30, 2010, barely 60 days from today. Step two would be completed by January 2011.  Step one of the plan would account for what we believe will be at least a cut of 3.1% and our expectation that operating expenses will increase at least 2.5%. We identified a number of departmental consolidations, we've restricted hiring to critical personnel only, we've identified energy savings that we will accomplish by June 30 of this year. The second step, we defined as a positioning step that will focus our analyses and planning to identify an action plan to be completed by January 2011. This includes the development of the criteria that we will use to identify 6 new academic degree programs or to identify 6 existing growing programs where increased investments will result in a more capacity to serve student need and student interest. Likewise, we will use this criteria to identify 6 programs that will be terminated and their department funds reallocated.  We will also complete a thorough review of our athletic portfolio, dropping those sports and activities that have low student/community support, and invest in new athletic opportunities. This same process will be applied to student support areas.  I do want to mention one area in particular. The growing mental health needs of students are well documented.  It's no longer a question of anxiety about public speaking and mathematics. Students are coming to campus with a broad spectrum of serious issues, some that require daily medical monitoring, some that require consistent and deliberate counseling if they are to succeed in college. We will be looking for a more comprehensive model to help our students succeed.

So to reiterate my questions to policymakers:

  1. Restructuring, revenue reform and cost-saving measures - the state's challenge, and certainly the challenge before each of Michigan's public 15. What is the right balance for all of us?
  2. What can the Legislature do this year - if not through additional funding then through other opportunities - that will help keep higher education accessible to Michigan citizens, including those who do not come from financially well-off families?
  3. How will the Legislature address the short-term budget crises while at the same time look to a more prosperous future and help Michigan's public universities plan for that time?

In closing, I hope I have offered some thoughts for you to consider. Northern is aware of its responsibility to serve our public in cost conscious ways. Delivering a university education suitable for the 21st and 22nd centuries demands the cooperation of public universities and government. It certainly demands a broad and enlightened public discussion about a state's priorities. Thank you for your growing understanding of Northern Michigan University. Thank you for sharing this brief time with me in critically and deliberately thinking about Michigan's future - in a broad sense, as it pertains to Michigan's public universities and specifically as it relates to the decisions and actions we're taking at NMU.

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