Contact: Darrell S. Pressley, University Relations, (517) 355-2281, pressley@ur.msu.edu

2/10/2004

Good Afternoon.

I begin by thanking everyone for what you individually have done to deal with the financial challenges we all face. This has been especially difficult because of the belt tightening we have done over the years required to keep MSU more affordable for students. In our efforts with the budget, you’ve changed how you work, and you have frankly worked harder than ever. The budget reductions have been driven from within the university, not just from the administration building. As we have done this, no doubt with real discomfort, we have kept in mind the needs of those we are here to serve – the students and society at large. Please accept my congratulations, and my gratitude for your efforts. Know that I understand that this continues to be very difficult.

These individuals honored here today represent the special MSU commitment to advancing knowledge and transforming lives. Their contributions – and yours – are all the more significant during this time of budget reductions.

It is true that cuts could have been more severe. The fight for the Agricultural Experiment Station and Extension, for example, was magnificent. In the beginning there was serious discussion about eliminating these programs. MSU employees and people all over the state, including the Farm Bureau rose up to defend and carefully explain the value of these historically strong contributors. Dean Armstrong, Extension Director Bethel and Research Director Gray worked hard and had a big impact on the outcome. Steve Webster and Legislative Affairs were excellent. Also gratifying was the involvement of faculty in this advocacy effort. In many ways, the efforts of all were unprecedented in scope and result. I will always remember Wayne Cass, chairman of the labor coalition, on the night we had a meeting with employees and regional legislators. He simply could not have been better in presenting the case. The positive outcome – no further cuts – was noted around the country as a textbook case of how to fight for important programs.

Of course the fight for our budget is not over.

On January 27, MSU’s Board of Trustees met and unanimously passed a resolution agreeing with Governor Granholm’s proposal on tuition increases and state appropriations. This agreement lessens the reductions of the December Executive Order from five-percent to two-percent for the current fiscal year. It commits the state to no additional reductions in the base budget of fiscal year 2004-2005.

In turn, we agree that MSU will limit next fall’s resident undergraduate tuition increase to 2.4 percent, the approximate rate of inflation. With our pledge goes our hope and expectation that the state can keep its bargain. This agreement makes sound financial sense. As we carefully ran the numbers and compared those with possible – indeed probable, alternative outcomes – we concluded this decision is the most responsible. Nonetheless, the university still must reduce the budget by more than $20-million next year. These reductions will be difficult and at times painful.

In her State of the State address, just hours after our Board voted, Governor Granholm announced that MSU was the first university to take formal action on her proposal. This announcement got one of the biggest applauses of the evening.

There has been an alarming trend in Michigan toward disinvestment in public higher education during the past 35 years. In the mid-1960s, the State of Michigan covered some 75-percent of the cost of a Michigan State University education. Today, state support for an MSU student is less than 50-percent of the cost.

This trend is NOT one the people of Michigan support. The citizens of our state believe in, and support, public higher education that provides both access and quality. According to the recent State of the State survey, conducted by IPPSR, some 84-percent of those surveyed rate our universities as “excellent” or “good.” An even higher percentage – 90-percent – judge the role of our universities in improving the state’s economy as “very important” or “somewhat important.” Michigan’s residents show strong support for universities when confronted with budget decisions. For example, they are twice as willing to support cuts in some other areas of the state budget than higher education.

Impressively, their willingness to accept cuts to higher education has declined sharply IN RECENT MONTHS. We appreciate the broad and deep public support and believe this sends an important message to our public officials. Make no mistake, the people of Michigan value their universities. We need to work hard to assure that MSU does all that it can to reinforce public trust of this University and of higher education generally.

While we have accepted our responsibility to reduce spending, we are also looking for new sources of revenue. They include:

- Additional Weekend Master’s programs

- Certificate programs

- Summer academic programs for high school students

- Continued aggressive cultivation of research grants,

and very importantly,

- the Capital Campaign.

Fortunately, we came into this stormy period in strong financial shape.Investment returns on endowment have been excellent. We have had the reserves for short-term bridging of cuts. As a general rule, we have not used tuition and appropriations to pay for new buildings.We will not mortgage the future. Instead, we use parking fees to build parking ramps, practice revenue for medical school improvements, and residence hall fees for renovations of residence halls.

It is worth considering our problems in the context of our long history and our future. Next year, MSU will be 150 years old. A few days ago, George Brown of Texas endowed two named chairs, one in Chemistry and one in Physics, in recognition of his father and his uncle. George took such delight in realizing that these chairs will still be here in another 150 years. This devotion to MSU’s future highlights the importance of our $1.2-billion Capital Campaign, with its significant endowment component. To date, we have raised $789-million. We are ahead of schedule for the 2007 campaign completion.Impressively, faculty, staff and retirees have contributed nearly $35-million to the campaign so far, including $6-million last year. You and I are proud of Michigan State and support it with our dollars.

Our past holds many lessons for the problems and the opportunities of today. We tend to think of MSU as having a smooth path of growth from the small agricultural college in the early 1940’s to a great and large research institution by the 1960’s. A few days ago, I called Dr. Milt Muelder, who was a faculty member and administrator for most of those years and asked about those times. He said, “We were always struggling with the budget, but we never stopped innovating. We were too poor and too ambitious for the University to do anything else.” Such values over the years have built this institution.We have a cross-disciplinary approach to solving problems in contrast to many other institutions. We are idealistic; we believe we must make social contributions. We are also very practical, seeking solutions that really work.We are a “can-do” place. These values have sustained us over the generations and do so now. We do advance knowledge. We do transform lives.

We need to consider how to build quality even as we struggle with the budget. Our Guiding Principles continue to provide a sound foundation for our unique “practical vision.” Specific goals that came out of the Guiding Principles have been accomplished, but the Principles themselves remain touchstones.

For instance, we have used the Honors College and Study Abroad to improve “Access to Quality,” to “Achieve More Active Learning,” and to “Increase Diversity Within Community.” There are other examples of how these Principles, developed a decade ago, guide us and serve as touchstones.

Today, however, we must address a set of “New Realities.” These realities are economic, political, demographic, global, and organizational. We must make sure these realities provide opportunities – and not just threats – to this university.These new realities must be measured against our Guiding Principles.

New Realities call for New Opportunities built upon our Guiding Principles.

I would like our community to come together to frame, discuss, be creative, and generate solutions for a changing environment. Soon, through web and group gatherings we will discuss ways to address these new opportunities.

For example, we provide highly-recognized undergraduate education, but the quality might be strengthened in a number of ways.

Higher admission standards of recent years require even more of students. This is not about just moving the grade curve, but expecting greater engagement and learning.Undergraduate research opportunities, more co-op placements and internships, and fuller integration of Study Abroad into the curriculum, are ways to achieve further quality.

Also, we should take a careful look at hybrid courses, especially in a student’s first year or two at Michigan State.By hybrid I mean regular classroom work combined with interactive web learning. This hybrid approach might be less expensive to deliver, though that is unclear. The goal, however, is to further invigorate the curriculum.We now have substantial experience with web courses – over 7,000 enrollments in web courses during the last year, including four master’s degree programs delivered on the Internet. It is important that we continue to expand these web courses to provide access to the greatest number possible. But in addition, on-campus hybrid courses should build quality, by challenging students academically and allowing faculty to have greater individual student contact.

We’ve had some experience with these types of hybrid courses, for example, through an NSF grant to the College of Natural Sciences. This grant has resulted in computer innovations in approaches to learning. The program has won an award as the “Best Information Technology Application in the World of Education and Academia.” Physics professor Wolfgang Bauer says the project lets him put computer technology to work for students. It allows him to have significantly more interaction with students.

We are also interested in the time it takes to earn an undergraduate degree. At Michigan State it is an average of 4.5 years. There is no question students can save money if they get through more quickly.

For example, they can save the cost of room and board during the extra time and avoid lost income or opportunity. Issues to be addressed in a faster time to degree include:

- the number of necessary prerequisites

- whether courses are available at the proper times

- half-semester courses,

and

- credit by exams

Incentives for students to graduate in four years could include block tuition. We know average credit loads are about 14 credits per semester. Block tuition could encourage students to increase this load. More courses during the summer semester could allow students to meet requirements and move forward faster. Perhaps higher tuition could be charged during a student’s fifth year.

All of these are examples of the complex undergraduate education issues we are carefully examining.

We remain committed to assuring that more socially and economically disadvantaged students, and some who are less-prepared but promising, can attend Michigan universities – including MSU. It is worth looking at the waves of first generation students over the decades, starting with the veterans after WWII, then students from blue-collar families in the 60’s and 70’s. All of these groups were previously under-represented. We are concerned about groups that are under-represented today. We need to think hard how we can provide the dream of a university education to more students and help more students to achieve that dream.

I’ve heard so many students say that as freshmen or sophomores in high school they walked around campus and said to themselves, for the first time, “I might be able to do this.” Supporting a dream and then figuring out how to help students achieve it is, of course, complex. But the times call for us to play a more aggressive part. We remain committed to a diverse student body and campus where all can grow and learn.

MSU is widely perceived as one of the most international universities in the country.It is a competitive advantage we should build on. We are about to go through our 10-year North Central Accreditation. We have chosen to use our international pre-eminence as a centerpiece of our self-evaluation for this accreditation process .As you know, our undergraduate Study Abroad program is the largest in the country.

We need to further internationalize the curriculum to help assure its quality and relevance.Global education should be an even more seamless part of our curriculum and not just seen as an extra chapter of a course as it sometimes is. Also, we need more Study Abroad options at the host institutions abroad. Faculty involvement and leadership is essential in our efforts to internationalize MSU.

Historically, MSU’s international activities have been divided between world area studies, often with funding from Title VI, and the problem-solving work, frequently funded by USAID and other donors. These two activities should be more fully integrated to help foster results. For example, knowledge of African language and history allows us to better understand and solve regional food and environmental issues.

Moreover, we should look to collaborations across the globe. A great example is the $5-million grant we received recently from the Sun Wah Education Foundation of Hong Kong to study and compare the U.S. and Chinese K-12 school systems.

Research, in its many forms, is also central to who we are. How we approach research distinguishes MSU. The University must be engaged in basic research to generate knowledge to address problems, and interface dynamically with applied research.

These two concepts – basic and applied research – must provide the foundation for a strategic research agenda. Their blending creates a synergy that addresses fundamental contemporary issues. Those issues range from chronic wasting disease and TB, to land- and water-use.

In fact, one of the most important endeavors is our effort to coordinate environmental and science policy. This includes, by the way, a new PhD program in environmental science and policy. We are engaged in strategic planning for signature programs in environmental science and policy. Land-use is a prototype for these.

Following the completion of the Michigan Land Use Leadership Council, MSU faculty have worked along-side stakeholders to develop a strategic plan for land-use research and outreach. The agenda was unveiled last week at the Michigan Land Use Summit hosted by MSU. A series of internal grant opportunities will follow.

As you know, in the Governor’s recent speech, water quality was highlighted as a high priority for the state.Immediately after that address, we met with key members of the administration to ensure that MSU will provide the research and educational support needed. I would also like to note, that today marks the start of a publicity campaign to focus on environmental work at MSU.

Research at MSU is more important than ever. We have made great progress in recent years, though more must be done. Incidentally, much of what we do is in our unique way.We must continue to expose undergraduates to top researchers and involve them in more projects for solving problems throughout the world. Recently, Bob Huggett announced he is retiring as Vice President for Research.During Bob’s seven-year tenure we have seen external research funding increase by 81-percent. Research awards totaled more than $300-million last fiscal year.We thank you, Bob, for your contributions.

One of Michigan and MSU’s most exciting endeavors is the RIA Campaign. The goal is to bring a new $1-billion dollar federal science laboratory to Michigan. The Rare Isotope Accelerator will offer incredible promise for scientific advancements in nuclear research, medicine, and national security, as well as advancing our knowledge of the origin of the universe. The U.S. Department of Energy has announced the plans to proceed with the project.We will continue to work hard to bring RIA to Michigan.

The RIA project provides a most-dramatic example of how MSU approaches basic and applied science. RIA will address our understanding of the most elemental components of life itself. Understanding these building blocks will provide scientific applications we can only imagine.

There has been much public discussion about a possible presence of our College of Human Medicine in Grand Rapids. It is important to emphasize that medical education is a central part of Michigan State University, not only in East Lansing but around the state. To be sure, it is our expectation – yes, our mandate – to explore how our medical colleges can better serve Michigan.

A presence in Grand Rapids – whatever form that might take – is an opportunity we must explore in depth. Guiding us in our assessment is a promise to maintain our commitment to quality medical care and services in mid-Michigan. In the weeks ahead, our assessments will be accelerated, and we will be talking with many experts and leaders throughout the state.

Many of you have participated in the initiative led by Provost Simon, to consider the status and promise of the liberal arts, looking to reinvigorate that core academic area. The review is not driven solely by budget challenges, but by a pursuit of enhanced quality.Like other universities reconsidering the role of the liberal arts, we are in a “change-or-be-changed” situation. We will respond by addressing organizational and financial realities. And we will seize this opportunity to enhance quality.

Our colleague Marcie Williams has done an exemplary job in leading the discussions, recommendations, and debates. Her report has been posted and is being reviewed campus-wide. In the coming days, Provost Simon will offer suggestions for more specific actions to strengthen the intellectual vitality of the campus in terms of the arts and sciences. These options will be widely discussed in a variety of forums.

These forums, and those I called for earlier in this address, will bring us together to put energy behind creating new opportunities for the new realities. I began by thanking you for your efforts to address MSU’s budget difficulties. I thank you in advance for your commitment to improving our strong base of quality education. This address next year will be given on the 150th anniversary of our University. Because of you and our values, we will always be the pioneering land-grant college for this great nation.

MSU President Peter McPherson