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Changing
Times
C.D. Mote, Jr.
President
Glenn L. Martin Institute Professor
of Engineering
University of Maryland
Presented to the University
of Maryland Senate
September 22, 2003
It's
truly great to be here today to welcome members of this year's Senate to a new
academic year and to report on the state of the University. I always look
forward to working with the Senate leaders, Chair Joel Cohen, Chair-elect Art
Popper, members of the Senate Executive Committee and Senate representatives of
our community.
For the past five years I have come to this Senate meeting and spoken about the
extraordinary accomplishments of our university community and outlined plans
for the coming year. It is important to the life of a community like ours to
take every opportunity to thank the people who have contributed so much to
advance the University-recognize the too often unsung contributions of those
who make the place operate smoothly every day, those who carry us in times of
crisis, and who create the environment and ambiance of a great institution of
higher education.
This year, however, the University faces special challenges. And much appears
to have changed over one short year. Some may be wondering if we have changed
our aspiration or if the state and the Regents have changed their expectations
of us. The short answer is no.
But we need to spend a moment to set the current context before beginning a
discussion on our direction. To satisfy both the need to recognize the special
contributions of our community and to talk about our direction and
circumstances, I have decided to post an Overview of
Accomplishments for
2002-2003 on the web and not speak about them today. It recognizes
just a few
of the many extraordinary contributions of campus people and units during this
past year, which have continued the remarkable pace of our achievements. When
you read it you will be inspired by what has been achieved. Please spend a few
moments on it. I have also submitted a text copy for the Senate archives. I
must say I regret not being able to thank faculty, staff and students who
consistently put so much of themselves into our success. It ranks among my most
pleasant responsibilities. I will do so later personally.
But in the few moments we have together attention to our direction and
circumstances created by declining state support is called for. The challenges
we face are both cyclical and structural. The cyclical are the same old
problems but the structural are new. They stand against our mandate to build a
great university here. I have been discussing this situation with the Regents,
the Chancellor, and our deans, and I have been very impressed by their very
strong, across-the-board support for our continued drive to build a great
university here.
To help us understand where the University is going, it may help to start by
looking at the course of higher education nationally. The flow of a stream is a
useful simile for the long-term course of higher education. Imagine that you
are sitting on leaf in a flowing stream. From that perch it is hard to tell
which way the stream is going. You may be flowing downstream or going nowhere
trapped in a vortex behind a rock or captured in a back eddy that is actually
moving upstream. Only by rising up over the stream can you get an accurate
picture of where you are and where it is going. And when you rise high enough
you can even see where it has been before and possibly where it will go next.
So where is the stream of higher education flowing nationally? A little bit of
history may be helpful. A century ago public higher education served society.
Land-grant universities were created to support economic development of the
states. They were supported by the states to serve the states. Their timely
mission was agriculture, the mechanic arts and ROTC-the essence of their
mission was economic development of the states in this new country. They did
not focus on students and alumni. Early on there were few dorms, student
unions, health centers, recreation centers, and other services provided to
students. The Greek system was founded to support student life needs that
universities largely ignored. Alumni associations were also created
independently from the university in most cases, and often in spite of the
university. Athletics brought alums back to campuses in great numbers, but not
so for academic programs. Universities did not see that care and support of
students or alumni was their role. Tuition was insignificant and private
support miniscule. That muted the external voices and damped expectations of
students and alumni. Fund raising was even prohibited in some public
universities. As a consequence, the states "paid the piper" and they "called
the tune."
That arrangement lasted until about 50 years ago when the national
responsibility for basic research was passed to universities under funding from
the federal government. The research service provided by universities gained a
new and growing master - the federal government. And subsequently, the
corporate sector and others outside the university joined in the sponsorship of
research.
Since that time the flow of the stream has encouraged even greater attention to
building a research enterprise, funded by non-state sources, into the fabric of
the campus at all levels. As a consequence the state no longer fully paid the
piper and called all the tunes. And the states were not unhappy about it.
Then about 25 years ago, the states began withdrawing their support from
teaching and service as measured by the fraction of state budgets devoted to
higher education. As a consequence of this pullback, public universities took
two steps under the encouragement of the states: (1) They began to charge
students more than nominal tuition, and (2) they began to raise private funds.
And both of these actions have increased steadily ever since with
encouragement, if not prodding, by the states.
As students began to pay the piper, their expectations for what they would get
increased too - they too wanted to call some of the tunes. And so it was with
private benefactors and their need to develop a continuing relationship with
their university beneficiaries.
The states have enthusiastically welcomed these actions in most instances. They
see non-state support as a means to provide high quality education at reduced
cost to themselves. As a consequence, still others are calling our tunes. I
don't believe the states fully realize how they are changing the basic mission
of the universities that serve them. When you look down on this flow from on
high, you see where we've been as well as where we are and can guess pretty
well where we are headed. "You can't go home again," describes our
circumstances quite well.
The withdrawal of the state from financial responsibility for higher education
is quite striking. You might even ask, "are we still a state university?"
since we respond to the interests of so many others that we largely ignored at
the beginning. Well yes I believe so, possibly 26% of one anyway, since that is
the fraction of the operating budget paid by the state. We were 34% of one when
I became president five years ago.
Who should pay for "free services" that the university provides on behalf of
the state - those that were fully paid for by the state in earlier times - now
that the state is pulling back from supporting them? Our students through
their tuition? Beneficiaries of these services? Direct state appropriations?
Can they even continue on any substantial scale? Is it realistic to expect
students to support services without sponsors any more than it is to expect
research grants to support them? I think not. These rhetorical questions serve
to illustrate how our changing funding base is permanently altering the
university's founding role as a servant of the state.
We are in transformation; there is no doubt about it. A recent editorial
in The
New York Times (August 26, 2003) picked up on the trend, lamenting
that "Public
colleges and universities, which grant more than three-quarters of this
country's degrees, have been steadily undermined by state budget cuts and a
mood of legislative indifference." That editorial put the beginning of the
decline in the 1980's, but the trend actually began earlier. It has increased
its speed during this past two years of recession. Thus this transformation is
not caused by the current financial circumstances. But the budget shortfall
accelerates the transformation that has been underway for decades. Cuts in
operating funds this year of $81 million, which equals 26% of the current state
General Fund appropriation, have projected a harsh reality.
The flow of the stream of higher education support over half a century leads me
to conclude that this is a structural shift in public policy, not a short-term
budgetary shortfall and our state is not bucking the national trend. At the
same time the state expects a top-class research university at College Park.
The Regents set my first responsibility for 2003 to "Maintain the emphasis on
building academic excellence and achieving national eminence." The age when
great public universities were built by state appropriation alone is past, and
this state, which ranks in the bottom ten of all states in its public support
for public higher education, was never going to lift us to the top in any case.
The underlying message is that we have to figure out how to make it happen, how
to fund it and then do it. This stream shows no sign of changing its course.
So shall we say, our hand has been dealt. How are we going to play it? One
thing is certain-we will either go forward or else we will go backward. I
choose forward. You might be interested to know that the turtle is the only
animal that cannot go backward.
There are only a couple of possible courses we can follow, and actually only
one good one I can see. We could do nothing, assume the role of the victim and
hope for two contemporaneous miracles. The first miracle would be an immediate
and substantial economic turn-around in the state leading to new state revenues
without new taxes. And the second miracle would be a new and high priority in
the state and System for funding of higher education at College Park that would
bring the new money here. Getting hit by a comet seems more likely to happen.
Alternatively, we can develop a strategy to move the university forward by
making internal operational changes and by increasing and leveraging non-state
assets while continuing to press the state to step up to supporting its best
interests.
Because hoping for miracles is not a very good strategy, it seems that there is
only one choice if we want to continue to build a great university. Let me
return to this resource and operations question after digressing for a few
minutes to talk about the great university we have been charged to create.
Quality lies at the root of our problem. Building quality is more expensive
for the university even if allowing mediocrity is more expensive for the state.
Let's talk about why the state needs a great university and what it takes to
build one.
In 1988 the state charged this campus to build a flagship university
competitive with the nation's best public research universities. That
expectation was strengthened by the Larson Task Force legislation in 1999.
These state laws specify the expected national stature of the university as a
guide to the campus leadership, the Regents and the state government itself.
Why should the state create a great flagship university? What's in it for the
state?
We live in a highly competitive society. The state must compete. The
competitive issues are the economy, security, education, technology, health
care, environment, quality of life, and workforce. And of course others can be
added. For the State of Maryland to prosper, it must compete favorably against
other states. Study after study has shown that research universities are keys
to states competing in this knowledge and information age. The state needs a
great research university so that it, and its people, now and in the future,
can compete in the top tier. That is why we are the state's single most
important asset in the determination of its future.
What distinguishes the great universities from the good ones? Two things:
impact and leadership. Great universities are widely recognized for the impacts
of their achievements and for their leadership. It is all about impact; it's
not about activity. Good universities do a lot; great ones have high impact.
Great universities act like a magnet that attracts and supports excellent
people and facilitates their achievements - their impacts. Faculty and
students alike are attracted to great universities because they gain value from
their association with them. Sponsors and partners outside the university seek
opportunities to link to people and facilities in great universities to address
their knottier problems. It is the people and the facilities that have the
power to attract.
Four elements are needed to build a great university: people, unfair
advantages, quality and resources.
First, people are necessary. Great universities attract and retain excellent
people and provide sufficient support so that they are willing to commit to
building their careers there. We have top people here and we can attract them.
This is not a problem for us. While commitment of excellent people is
necessary, it is not sufficient.
Second, unfair advantages are necessary. To become great, a university must
have access to, and use intrinsic advantages that others don't have and can't
easily get. Unfair advantages provide leverage for attracting and retaining top
people and enhancing the opportunities for them to have great impact. Unfair
advantages have always been present in the rise of every great university. We
have them in spades from our location in the Washington-Baltimore corridor and
we are beginning to use them. Consider just a few of our recent partnerships
and enterprises:
- Center for Advanced Study of Language in partnership with National
Security Agency
- Unique umbrella agreement with National Institute of
Standards and Technology facilitating greatly the collaboration and
partnerships between the campus and NIST
- Partnership with National
Oceanographic and Atmospheric Administration and its National Centers for
Environmental Prediction to create the world's leading climate prediction
center
- New research park - UM Enterprise Campus - M Square, which will be
the largest research park in the state
- China-UM Research Park, China's
first research park outside of its borders is located next to the campus to
allow networking with the university and Maryland companies
There
are many others.
Third, quality is necessary. Every great university holds to an exceptional
standard of quality in essentially everything it undertakes; it is not a
sometime thing, not a retrospective consideration, but it is a workaday way of
life. A great university consistently expresses an unrelenting, unwavering
passion for contributions of great impact. It's in the air. You can feel it
when you walk around.
While the standard of quality refers to the work of everyone, the faculty
primarily sets the standard, sets the expectation, sets the culture of
excellence and enforces it through its collective judgments in various ways.
Our standard is, and will be, what the faculty makes it. This is true at every
great university.
Fourth, resources are necessary. Here's the rub. Our only strategic impediment
to building a great university is access to resources. And essentially we have
been told that we have to figure out how to solve the problem. Because a clear
relationship exists between expenditures per student and quality of programs,
committing to quality creates the problem for us.
Given the direction of flow of higher education in the State and given that it
is not going to change, I believe we need to chart new directions for both
funding and operating the university that will address the resource question.
And we must begin now. Inaction will allow the vagaries of the economy and the
political climate to dictate our future, and it would not be a pretty one.
Inaction will likely squander the hard earned gains in academic quality that we
have cherished in recent years. These new directions can only be determined
after discussions with our many stakeholders, and that will take time. And they
must be guided by preservation of our core values as a university.
On the funding side, we should consider broadening our revenue and asset bases
to include greater reliance on self-generated funds and other non-state assets
to supplement state general fund allocations and tuition. Private support will
have to play a greater role in the operation of the campus as will access to
assets that are obtained through partnerships with organizations around us.
The development of resources by units and by faculty and staff to support their
programs needs to be encouraged through incentives. We need to better align
self-interest with university interest. We must be creative and open to
heretofore-unthinkable ideas about resource generation at every level.
On the operation side, we need to consider an internal management model that
allocates central funds based on values, mission and priorities. Our strategic
framework should guide allocation decisions and a partnership for making these
decisions needs to involve the academic side, the unit administrations and the
central administration. We have been moving in this direction; so this is not a
radical departure from current practices; allocations have not been uniform.
This will mean moving toward a responsibility centered funding model. We need
to focus allocation of central resources on priorities.
I met with the deans and vice presidents during the summer to discuss the needs
for actions such as these and received their very strong, unanimous, even
forceful, concurrence. We discussed topics such as new financial models,
resource allocation, increased efficiencies, allocation of new resources and
the timely need for action now. They have analyzed their unit operations and
have already begun to examine issues such as directing up to 10% of their
current budgets to permit funding of new initiatives even without new monies.
In short, serious conversations have already been initiated. A report from this
dean's retreat is posted for your perusal on my website with this
presentation.
I have met with the Senate Executive Committee and received its willingness to
explore these ideas together with the administration.
Let me describe some of the actions that I believe we-the administration and
Senate and others-might begin to explore together.
- We need to work with the Chancellor and the Board of Regents to obtain
support for the ultimate changes needed in operations, funding and increased
autonomy that will permit us to succeed in building the university, like
exploration of new financial models that are less dependent on state
appropriation and new approaches to financial management, responsibility and
accountability.
- We need to work with key campus constituencies to explore ideas for
operational and funding changes; create an even greater entrepreneurial spirit
and action on campus; create new incentives for people and units to increase
both state and non-state funding and to implement efficiency efforts.
- We need to create a strategic planning council consisting of faculty,
students and staff to advise on various issues.
- We need to plan and carry out a major private fund raising campaign to
focus in part on funding basic operating costs of the university, especially
need-based scholarships and fellowships and to make private funds integral to
the operation of the campus.
- We need to leverage the assets of others off campus through partnerships to
provide opportunities in research and learning for our students and faculty.
This may include expanding the number of partnerships with government labs and
the private sector and expanding the number of joint and part-time appointments
with people in institutions around the campus.
- We need to implement efficiency efforts that reduce duplication and
maximize allocation of our resources to our highest priorities.
- We need to determine the appropriate expenditure per student using state
guidelines that will allow delivery of highest quality programs and also plan
on raising this amount.
- We need to maintain access for the state's most needy and middle-income
students by expanding financial aid.
- We need to increase graduation rate and throughput of students to permit
serving larger numbers of the state's citizens without increasing costs; and
finally
- We need to continue to press the state to support its flagship campus.
My thought is to work with the executive committee shortly after this meeting
to initiate explorations on some of these issues that can lead to a progress
report for the Senate at the end of this semester or at the beginning of the
next one.
In conclusion, we have covered a lot of territory today. We looked at the
history of higher education nationally to get a long-term view of the course it
is following. We each can guess the probability that this stream may change its
course and if so in what way. I see no reason to believe that it will go
backwards, and quite to the contrary I believe the historic public higher
education funding model has already been abandoned, leaving a hybrid,
public-private model as our only opportunity for continued achievement.
As we undertake these discussions we must protect our core values, our academic
soul. This will require vigilance and clarity on each decision. But there is
no alternative to changing our operations as the revenue picture continues its
long-term changes. We live in a market-based environment so a market-based
approach is inevitable.
Together, we can build a great university for the current and future
generations of Maryland citizens who will reap the rewards. To succeed we must
work together. This is our mandate from the state. It is also our opportunity.
We are fortunate to have a course to follow that can continue to build this
great place. But the time to begin is now.
Thank you for your polite attention to my thoughts on this transformational
issue.
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