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2017 State of the University System Address

2 MARCH 2017

President Thibodeau, Speaker Gideon, honorable members of the 128th Maine Legislature, President Langhauser, President Brennan, distinguished guests and friends: On behalf of the Board of Trustees, Boards of Visitors, Faculty, Students, and Staff of your public universities, I extend greetings and thank you for the opportunity to address you concerning the state of public higher education in Maine.

I would like to begin by introducing representatives of the Board of Trustees and Boards of Visitors who are attending today from throughout the State, as well as the presidents of our seven campuses, student and faculty representatives to the Board of Trustees, and members of my senior staff. Please welcome them.

These good people are your partners. They represent our communities from Kittery to Calais, Madawaska to Jackman. They understand our state’s challenges. They live them every day, as do every one of you. They are committed to meeting those challenges and to helping make our State thrive, as are every one of you. And they are committed to Maine having the most relevant and responsive, accessible and affordable, quality-driven educational system we can have, as are each and every one of you. We are partners.

We all seek a stable and expanding economy, with opportunities for all Maine people in vibrant, healthy communities. We know the enormous challenges we face in making this happen. We have an economy in transition, and we face a demographic decline that threatens our economic and civic health as never before. The Office of the State Economist forecasts a 15% drop in Maine’s population ages 24-65 between now and 2034; a decrease from over 700,000 people in that age group to barely 600,000. During that same period, more than 60% of new Maine jobs will require a post-secondary education, a percentage that far outstrips Maine’s current level of educational attainment. Put these two simple facts together – that our core working population is declining at the same time that greater educational attainment will be required for most new jobs – and one point becomes crystal clear: Maine must actively invest in our people’s future and the foundation of that investment must be greater educational opportunity and increased educational attainment. To do less is to consign our state to economic stagnation and worse.

Despite these numbers, I address you today as an optimist. Why? Because we have shown that working together we can create and expand opportunities. We have shown that when we break down old, outdated barriers and partner to innovate and grow, we create opportunity. And when we provide opportunity, Maine people will do the rest.

Let me remind you of some of the hard work we have already done and then share details about some of the flourishing partnerships already underway. Many of you will recall that only three years ago we forecast a structural budget deficit for the University of Maine System estimated to reach a cumulative $90,000,000 by FY19. We took action. We made reforms and reductions, we cut costs and reallocated resources to make sure more dollars were reaching our classrooms and laboratories. We made the most significant organizational changes in how we do business since the System’s founding almost 50 years ago. As the result, we reduced annual operating expenses by more than $82,000,000 and reallocated a further $20,000,000 more. Our operating budget in this fiscal year is more than $10,000,000 less than it was just 5 years ago and is about the same size it was during the 2008 recession. We reduced the structural budget deficit forecast for FY19 to well under $20,000,000, and with a bit more work we will eliminate it entirely by FY21. We have done all this while holding in-state tuition flat for an historical six years.

During this same time we have been forging new and important partnerships under the One University principle that our institutions must work together to bring all their resources together in focused, aligned support of all Maine families, businesses and communities. I have some recent examples.

The University of Maine at Machias is an anchor institution, providing essential educational, economic, and social services to the Downeast region with impact well beyond Washington and Hancock Counties. UMM’s commitment to its students and communities is unsurpassed. But it is an institution whose efforts have been severely compromised by years of declining enrollment and economic uncertainty. This January, the Board of Trustees received recommendations from a committee of campus and community leaders that re-envisions the University of Maine at Machias as a regional campus of the University of Maine in Orono. The University at Machias will maintain its own identity but will have the full support of the University of Maine’s scale, capacity and expertise in carrying out its mission. It will be a win-win. To take just one example, graduates from the Machias program in Psychology and Community Studies  - a foundation degree for a career in social services – will be able to complete a Masters degree in Psychology with only a year’s post-graduate work in the flagship program. At the same time, UMaine Psychology majors will benefit from Machias’s experience and expertise in community studies. Breaking down internal barriers in historically unprecedented ways, this new partnership will bring stability, capacity, and growth to the Machias campus and to the entire region. New dollars are already being invested; new opportunities are emerging every day. We break down old walls; Maine people will do the rest.

Partnerships with both Maine Maritime Academy and the Maine Community College System have never been stronger. We have a block credit transfer agreement in place with the Community Colleges and we are working to ensure that prior learning assessments also transfer seamlessly, an outcome that is especially important for veterans and other adult learners. To help meet critical workforce needs, we have made seamless transfers for nursing and IT students a priority. The number of shared academic offerings has increased dramatically, often in unexpected ways. Eastern Maine Community College, for example, now offers a welding course to UMaine Mechanical Engineering Technology students, while Southern Maine Community College and the University of Southern Maine share a full-time faculty member in hospitality management. We now share several facilities throughout the state and we have reduced costs and increased efficiencies through shared purchasing services and agreements. You have asked for closer collaborations and your public institutions have delivered. We are breaking down the old barriers; students and taxpayers are the beneficiaries.

Let me share with you two more examples of new, groundbreaking partnerships. For decades, Maine has followed tradition and organized secondary and post-secondary education as separate systems with limited direct engagement. But there are good reasons to challenge the increasingly artificial barrier between 12th grade and what follows. While there have long been opportunities for some high school students to take college level courses, those opportunities were quite limited. But thanks to far-sighted educators from both our secondary schools and the University System, along with strong encouragement and support from Governor LePage, we have begun to expand the possibilities.

Just four years ago only about 700 high school students were engaged in some form of college-level education. Today that number is almost 2500 from more than 100 schools across the state. I believe that properly resourced we can and should offer every Maine high school junior and senior – wherever they may be located – access to quality college-level courses. The importance of this goal cannot be overstated. By giving all Maine students the opportunity to do college-level work, more students will pursue higher education. They will be better prepared academically and more confident in their own abilities. The savings, moreover, are substantial. This last fall alone, Maine high school students completed approximately 12,000 credit hours of college courses at little or no cost. Furthermore, early college students graduate more quickly and are ready to enter the workforce earlier and with less debt. This is a clear win-win.

Let me introduce a great real-life example. The major expansion of early college began in 2011 with a pilot cohort of 20 students from Ft. Kent High School participating in the University of Maine at Fort Kent’s Pleasant Street Academy. Brittany Theriault was a high school junior who entered that program with some trepidation and many questions. But thanks to some great teachers and her own hard work, Brittany graduated from high school with 27 fully transferable college credits. She entered college essentially as a sophomore and went on to receive her BS in Nursing from Fort Kent in December of 2015. From high school junior to college graduate in 4 ½ years. Best of all, Brittany has elected to stay in Maine and put her public education to use in service to our communities. Today Brittany is a fulltime nurse in the intensive care unit at Northern Maine Medical Center. We partner to provide the opportunity; Maine people do the rest. Please join me in congratulating and thanking Nurse Brittany Theriault.

We have always partnered with Maine businesses and industries. Cooperative Extension whose programs are essential to Maine agriculture serves more than 5600 businesses every year. The University of Maine’s Office of Innovation and Economic Development partners with more than 250 Maine businesses. But we can do even more. My second example illustrates what I mean.

MMG Insurance is a nationally-honored firm headquartered in Presque Isle. It partners with more than 190 independent agencies across 460 locations in Maine, New Hampshire, Vermont, Pennsylvania, and Virginia. As you might imagine, it is critical that MMG’s staff maintain their cutting-edge knowledge and skills if MMG is to stay successful in a highly competitive industry. How does it do this in rural Maine? Recognizing these challenges, MMG approached the University of Maine at Presque Isle to help craft a solution. In partnership with MMG leadership, UMPI President Ray Rice and his team created a state-of-the-art distance education classroom funded by MMG and the University of Maine System with help from the Maine Community Foundation. This classroom allows faculty from the University of Southern Maine and the University of Maine at Farmington to deliver professional development courses in such areas as risk management and the actuarial sciences. As a result, we develop programs to meet MMG’s particular requirements, helping them continue to grow a national company with a highly-skilled, competitive workforce right in rural Aroostook County.

This is One University partnership at its best. We join with MMG to provide the opportunities, Maine people do the rest. Representing this spirit of innovative and entrepreneurial partnership, please join me in recognizing and thanking MMG Executive Vice President and Chief Operating Officer (and UMaine graduate) Matthew McHatten.

Maine’s political and educational leadership now stand together at a crossroad. We must continue to work together to sustain our momentum and to keep our promise of continuing to grow opportunities for Maine people. I hope you agree.

In meeting our institutional challenges, the University of Maine System has not sought a bailout or a blank check. We took on the hard work of internal reform, reduction and reorganization to align our size and scale with the times, achieve fiscal stability, and establish a structure and culture where collaboration and responsive service are the expectation. Consequently, Maine’s universities are better prepared and positioned than ever before to implement a statewide program of innovation and growth.

Using the One University framework, the Trustees have sharpened our focus. We will increase enrollment by helping more students of all ages and backgrounds find an academically and financially sound path to college while increasing efforts to attract more out-of-state and international students. We will increase student retention and completion rates, and offer more guidance and support to graduates as they take the next steps in their career pathways. We will increase support for research and economic development that ties directly to growing Maine industries so that our businesses can prosper and our graduates have more opportunity to stay in Maine and build their futures.

The Trustees have also adopted a financial strategy that limits any request for an increase in appropriations to no more than the consumer price index. Any additional request above that amount must be for specific, focused initiatives with clear outcomes and certain accountability. With these points as background, I have three specific requests and in return will make three specific commitments.

My first request is for additional Education & General funding. E&G is by far the largest form of State support for basic operations including, for example, classroom instruction, scholarships, and general maintenance. In the past 10 years, E&G funding has increased a total of 2.34%, most of that in the last biennial budget. While we are extremely grateful for those additional resources, we request your consideration of increases more in line with the State Economist’s inflationary estimate of 2.6% in FY18 and 2.3% in FY19. If State support is increased simply to this predictable rate of inflation, any resources appropriated to the University System beyond what is in the current budget proposal will be directly invested in expanding enrollment, strengthening student services, and funding the expansion of courses and programs essential to meet critical Maine workforce needs, whether in nursing, engineering, the computer sciences, or a number of other professions essential to Maine’s economy.

Let me expand briefly on the nursing example. Today there are hundreds of unfilled nursing positions across the state. The Maine Nursing Action Coalition estimates that by 2025 the nursing shortage will be 3,200. Educating a greater number of nurses is essential, but the truth is, it costs more money to provide a first-class nursing education than we could possibly charge in tuition. Expanding nursing capacity therefore requires investment. If we want to increase the number of nurses – if we want to meet critical state needs – we must invest. But in asking you to invest we commit to you that we will increase the number of quality-prepared nurses like Brittany Theriault.

Second, I ask you to approve the Governor’s biennial budget request that supports early college. I have already discussed the advantages of early college in some detail, but scaling this expansion requires new investment. To achieve our goal of making early college available to all Maine high school juniors and seniors requires a matching expansion of resources to ensure access, quality instruction, and enhanced advising services. We ask you to partner with us so that all Maine juniors and seniors have this opportunity and we commit to accountability in meeting this goal.

Third, the University of Maine System’s facilities are a vast and critical public asset, encompassing nearly 550 buildings that house critical classrooms, laboratories, research centers, cultural centers, and more. This is critical infrastructure. Yet nearly 50% of these buildings have not been adequately renovated in 50 years or more. (The comparable national average is 17%.) Our students’ safety and the quality of their education – not to mention our state’s economic competitiveness – is at risk. Our ability to attract students who rightfully expect to learn and live in the most up to date classrooms, laboratories and dorms, as well as our ability to serve business and industries who depend on our research facilities, requires that we continue to invest in this enormously important public asset.

The University System has completed the most comprehensive, data-driven facilities review in our history. We are now undertaking the first phases of a comprehensive, multi-year capital investment plan that will draw on private and public resources to renovate, improve and – where necessary – demolish. It is critical that we provide facilities that meet the real and immediate needs of our students, businesses and communities. I therefore ask you to support the Governor’s infrastructure investment included in the budget, and at the appropriate time to consider our plan as you discuss additional bonding. We commit to share with you where every dollar will go and how it will benefit our student and advance our state.

To conclude, I want to thank the Governor and the Legislature for your support in the Supplemental Budget. Now we look to next steps in our partnership. With a clear understanding of, and an unyielding focus on, our priority outcomes, we ask you to continue and expand this partnership.Old barriers are coming down, new initiatives are flourishing, and as we work together to create the opportunities Maine people need and want, they will deliver. As I have said each time I’ve had the honor of addressing you, our success will always be measured by the success of Maine people. It remains that simple. Thank you.