By David J. Jordan
Partner, Stoel Rives
It is a foolish farmer who eats his seed corn in tough times. Nothing will be left to plant for a future harvest. Utah students are the seed corn of our economy. If we do not do our very best to teach and train them now, they will not be equipped to create and fill the careers of tomorrow; and we will all be the poorer for it.
In his State of the State address, Governor Gary Herbert called on the Legislature to hold education harmless from further budget cuts. That challenge presents the Legislature with some difficult and critical choices.
Without increasing user fees on tobacco or motor fuel, and barring significantly improved revenue projections, something has to be cut. Should legislators make across-the-board cuts to the entire state budget or should they fund education at the expense of other programs and projects?
The right answer is to follow the governor’s charge to fund education.
The 17 percent cuts that have already been absorbed in the last budget cycle come at a time when enrollments are up both in public and higher education. This is a natural result of both population growth and increased participation. It is a predictable pattern that when the job market tightens, more students seek higher education to make themselves more employable. Consequently, over 12,000 new students enrolled in college this past fall compared to the previous year. In total, enrollments are up by 17 percent over the past two years.
With simultaneous budget cuts and growing enrollments, university and college presidents are facing a perfect storm. While trying to serve more with less, they have already been forced to:
- Eliminate over 900 employee positions, including faculty
- Limit class availability to students because classes are full
- Increase student/advisor ratios
- Reduce salaries and benefits
- Delay infrastructure repairs/upgrades, including building closures
If the additional four percent across-the-board cuts to higher education being debated by the Legislature are enacted, they would have a crippling impact on students and the state including:
- Access to higher education by students statewide will be limited because Institutions at capacity will have no choice but to begin limiting the number of students who can enroll by imposing enrollment caps.
- All institutions will further eliminate numerous class sections, prolonging students’ time in college as they have difficulty obtaining classes they need to graduate.
- Elimination of academic programs ranging from CTE to baccalaureate to graduate degree programs.
- Larger numbers of students for every academic advisor; without good advice students are less likely to make the best choices in course offerings which can also delay their time to graduation.
- Closure of satellite campuses.
- Prolonging time to graduation delays students’ full entry into the workforce as taxpayers and lessens their ability to provide for their families.
- Elimination of approximately 600-700 full-time positions— mostly through involuntary lay-offs.
- Reducing the number of students trained and educated for the workforce by Utah’s public colleges and universities through enrollment caps.
- Undermining the capacity of our research universities, resulting in negative economic impacts for the state as adequate support for research is lost, reducing competitiveness for research grants which provide thousands of high-paying jobs and the ability to develop technologies that spin-off into new businesses.
If you terminate the faculty and discontinue an educational program, you can’t just turn the spigot back on next year. Once an educational program is dismantled, it takes years to rebuild. In the meantime, the opportunity to teach students in that program and train a work force that builds our economy is lost. If you cram more third graders into an already over-crowded math class because you can’t afford to hire another teacher, you can never give those students back their third grade year.
Our students are the seed corn of our economy. In lean times we must be prudent in our expenditures but we must also be smarter than the foolish farmer. Now is the time to sow the seeds of future economic strength.
By Lane Beattie, President and CEO
The Utah Legislature will convene for the 2010 General Legislative Session Monday. They will do so with the well-deserved title of “Best Managed State in the Nation.”
Utah achieved this ranking in 2008 from the Pew Center on the States because of our performance in four key areas – money, people, infrastructure and information. It is a proud honor for our state, and one that Utah has received eight times during the course of the last four governors.
But today Utah, like every other state, faces serious challenges not felt by any previous Legislature or governor.
- State government revenues have declined by nearly a billion dollars in the past three years.
- Nearly 90,000 Utahns are unemployed. That’s a population almost the size of Orem City.
- School enrollment in both public and higher education is at record levels.
- Human service caseloads are up 14% in the past year alone.
- And we have the fastest growing population in the country.
To quote the great patriot, Thomas Paine, “These are times that try men’s souls.” As business leaders we are asking a simple question: When the Pew Center does their next grading of the states, probably in 2011, what will they see?
Will we have managed through this financial crisis in a way that propels the Utah economy to once again lead the nation?
Will we have invested in our most important business resource – our people?
Will we have developed our workforce so that Utah families can be supported by high-paying jobs?
Will we have repaired and maintained our capital assets?
Will we have controlled costs so that future taxpayers are not burdened by our decisions?
Will we pay for our fair share of capital expenditures rather than passing them on to future generations?
Will we take responsibility for our choices and be held accountable for our actions?
May I suggest that the Pew Center, when grading all 50 states next year, will be asking all of these questions and more. They will be applying the business principles that you see attached to the wall behind me to the management of state government and asking, “Did they manage well and did they lead?”
Now is a time to lead.
As business leaders we ask the State Legislature as to apply business principles to the management of government. If they don’t , they will have squandered a great opportunity because no state is better positioned than Utah is right now to lead this country out of recession.
Of course, it’s not about the Pew Center, Governing Magazine, or any expert grading system, however well respected. It’s about providing the citizens and businesses in this state with abundant opportunities to develop and improve life quality.
And if we do, we will continue a long-standing tradition in this state to be not only well-managed, but to be a great place to do business, to live and to raise a family – a value at the heart of who we are.
The Salt Lake Chamber debuted the 2010 Public Policy Guide today, first presenting it to Speaker of the House David Clark and Senate President Michael Waddoups during a CEO Roundtable and later rolling out the business community’s policy priorities for the upcoming legislative session.
By Mark Bouchard
Senior Managing Director, CB Richard Ellis & Chair, Salt Lake Chamber Education Task Force
Education is the key element to our long-term prosperity. The Salt Lake Chamber has challenged the legislature to hold both public and higher education harmless as it works to balance the FY 2011 state budget. Further cuts will hurt our students now and the larger state economy in both the immediate and long-term.
Recently a group of business leaders had the privilege of hearing from Dr. Pam Perlich, a world renowned researcher with the University of Utah who provided us a view into Utah’s workforce future based on compelling research analyzing our existing demographics.
The implications are far reaching and compelling. The “New Age” workforce will dramatically change the landscape from what the “Current Leadership Generation” is confronted with today. As Dr. Perlich suggested, visit any 3rd grade classes in any part of the state and you’ll have a better understanding of what the workforce will look like within the next two decades. These 3rd grade classes are more diversified and require a re-engineered approach to education. From 2000-2007, the number of minority students enrolled in Utah public schools increased by 65 percent, nearly double the rate of white, non-Hispanic students. For every 100 Latino students enrolled in elementary school, only 4 will earn a bachelor’s degree compared to 26 white, non-Hispanic students. As our population becomes more diverse, we must either work to improve both rates or we will be inadequately prepared for the future economic challenges. This “New Age” workforce requires added attention both in funding and in other resources. We can only depend on the volunteer community for so much and our educators require real world solutions.
Utah’s demographics are changing. We face new challenges and new burdens, on an already taxed education system, both Higher and Public.
There are consequences for being last in the nation in our spending per student, having the lowest paid educators (K-12) in the country, potentially capping enrollment in higher education and eliminating programs and eliminating opportunity for so many. We simply cannot afford to ignore the statistics and research provided us by some of the finest minds in the country.
Experienced business professionals appreciate what increased demand for services coupled with the elimination or reduction of available capital to run a business produces. The result is a reduction in quality and a taxing of your workforce impacting culture and effectiveness.
We should never confuse efficiency with quality. Statistics suggest no one in the country is more efficient than Utah educators at providing quality education. Our test scores, although declining, are still some of the best in the country (we score particularly well on Advanced Placement and SAT). We are efficient; what we risk is quality. Increased demand by way of 12,000 students per year in grades K-12 and 12,500 in higher education, in conjunction with the increase results in a dramatic reduction of our spending in education, creating the perfect storm. The logical result is the erosion of the very foundation of our workforce future.
Over the next few months, through the end of the legislative session, there will be many ideas tossed around as the legislature meets its constitutional obligation of balancing the state budget. As options, plans and variations of plans are debated we emphasize our firm belief that education—both public and higher education—are too critical to the long-term prosperity of our state to face further cuts.
A highly educated workforce is the most critical long-term strategy for a vibrant economy and healthy society. Like other state funded departments, education absorbed cuts last year. These cuts in education coincided with an increase in demand as enrollment increased to the point that many Utahns who wanted to return to school found there was simply no room for them.
Balancing the budget is the immediate concern but the long-term requires an investment in our human capital. A well-trained workforce is the single most important element to maintaining and enhancing Utah’s reputation as a great place to do business. Further reductions in public and higher education put our workforce at risk.
Education funding must be protected as we balance the state budget.
