Testimony Before House Select Committee on Higher Education

• Date: 09/12/2002
• Author: Dr. Luis M. Proenza (President, The University of Akron)
• Chairman Hughes...members of the Select Committee on Ohio's System of Higher Education.

  My name is Luis M. Proenza. I serve as president of The University of Akron.

  The University of Akron is a comprehensive research and teaching university that currently serves approximately 24,500 students in more than 350 academic programs, and employs more than 4,500 full- and part-time faculty and staff.

  We serve students from around the nation and the world, but primarily from an 18-county region in Northeast Ohio.

  We are proud in that we increasingly serve as the public research university for northern Ohio, much like The Ohio State University has long served central Ohio and just as the University of Cincinnati has begun to serve the southern region of our state.

  My claim that the University of Akron is the public research university for northern Ohio is not made lightly. Rather it rests on The University of Akron's documentable excellence.

  For example, The University of Akron is the only public university in Ohio to have a science and engineering program ranked in the top two or three nationally, with our polymer science and engineering program rated second by U.S. News & World Report.

  Together with The Ohio State University, we have the distinction of serving Ohio's two largest industries -- polymers and agriculture, respectively.

  Moreover, in a study by the Lombardi Institute, we are the only university in northern Ohio to rank among the top 100 public universities in five of the variables studied; only one other university in northern Ohio was noted in that study, but it ranked only in one variable.

  
  I appreciate the opportunity to appear before this committee to discuss and put into context some of the critical issues facing higher education -- issues that I believe are affecting the economic vitality of our great state.

  In support of my testimony, I am submitting for the record several documents:

  • Two recent speeches that I delivered to the City Club of Cleveland:
    • ''Economic Development in the Knowledge Economy: Can Ohio Start Its Engines?''
    • ''The Role of Higher Education in Economic Development.''

  Also, I have provided a copy of my presentation to The Akron Press Club, "American Education: Why Not Our Own Marshall Plan?" and a guest editorial that I wrote for the Akron Beacon Journal: "After 30 Years of College-Funding Neglect, Some Hope."
  The basic points that I will review this afternoon are made in these documents, so that I can be brief in my remarks and allow more time for your questions.

  I speak from the perspective of a person with 35 years in higher education, with distinguished experience in four states, serving as science advisor to Governor Hickel of Alaska and currently to President George Bush on his President's Council of Advisors on Science and Technology.

  If our state is to become a leader in science and technology as Ohio Governor Bob Taft has called for, it follows that our state must make higher education a priority, because in today's knowledge-based economy, higher education is society's infrastructure.

  Yet, Ohio has evidenced 30 years of progressive, bipartisan neglect that has brought Ohio to near the bottom among states in its per capita expenditures for higher education.

  Ironically, part of that reason has been our past success in the old blue-collar economy, because our failure to adapt to the shifting paradigm of new jobs, requiring more and more education, has slowly but surely lowered Ohio's per capita income, lowered the percentage of educated people, and created a less-than-competitive economy.

  Indeed, 40 years ago, Ohio ranked 5th in per capita income, whereas today it is 22nd -- below the national average -- and still dropping.

  In today's knowledge-based economy, human capital is business capital.

  
  A high school education is no longer sufficient. Rather, high school is just the first stop on the road to a lifetime of learning.

  The Council on Competitiveness reports that jobs requiring technical skills will grow by 51% in the next decade.

  And worldwide, higher education is a growth industry because the market is increasingly sending a signal to everyone who needs gainful employment: Education pays!

  The recent Census Bureau study shows that people with college degrees are earning progressively more and more compared to those who complete only a high school diploma.

  The differences are notable: Persons with a doctoral degree will average $3.4 million in earnings over their careers; those with master's degrees $2.5 million; those with a bachelor's degree $2.1 million; and those with professional degrees a total of $4.4 million.

  By comparison, those with only a high school education will earn just $1.2 million during their lifetimes of work.

  And therein lies one of the investment values of public higher education, because with their higher incomes, students in Ohio will pay back to the state $1.84 in inflation-adjusted dollars -- just in additional taxes -- for every dollar the state invests in higher education!

  That is a nearly two-to-one return on investment, and by anyone's accounting, that is an excellent return on investment!

  The message that education pays is being heard by other states and other countries.

  The comptroller for the state of Texas, for example, has estimated in a recent study that " . . . Every dollar invested in our state‘s higher education system pumps more than five dollars into our Texas economy. It is a remarkable return on our money for Texans today and a vital stake in the future for successful generations of Texans tomorrow."
  (Carole Keeton Rylander, Texas Comptroller of Public Accounts, Special Report: The Impact of the State Higher Education System on the Texas Economy, December 2000)

  And beyond the increased tax revenues there are additional returns of as much as 60 percent per year resulting from the enhancements made possible by research and from the productivity gains made possible by a higher-quality workforce.

  
  And there are yet other social and economic benefits to be counted -- including savings from the many costs often associated with the lack of education, including unemployment, welfare, and crime.

  Indeed, as Derek Bok, the former president of Harvard University, often said: "If you think education is expensive, try ignorance."

  Because in Ohio, our lag in higher education is expressed as a 250,000 person "educational deficit," which is how many additional college graduates our state must add just to come up to the national average!

  Ohio now ranks 40th among the states in college graduates.

  Ohio's failure to invest in higher education has slowly but surely lowered the percentage of educated people -- with the obvious consequence of a lowered per capita income, a less-than-competitive economy, and much lower tax revenues.

  Other states recognize the fundamental role of higher education. The state of Texas, for example, is facing a $6 billion shortfall, larger than the one we face here in Ohio, and its proposed solution is getting more students into college!

  Why? Because Texas recognizes that with a college education comes higher earnings, and with higher earnings, the state will collect additional taxes and reap other associated economic benefits that ensure revenues and build long-term prosperity.

  In Georgia, the role of education is so clear that the state's former Governor, now U.S. Senator Zell Miller, publicly declared that higher education was the infrastructure of Georgia's new economy.

  Indeed, we need to take note of what is happening in the states around us.

  Even Indiana, according to Chris Sheridan's article in the Sunday Cleveland Plain Dealer, appears "more innovative in building an educated, technically savvy work force" than does Ohio.
  (Chris Sheridan, Cleveland Plain Dealer, August 18, 2002)

  Success, however, does not come about by keeping up with the competition. Success comes from our ability to differentiate ourselves.

  Governor Taft's exciting Third Frontier project, with its $1.6 billion projected investment is the kind of bold action that Ohio has needed and, thanks to Governor Taft's leadership, we soon will see it put into action.

  By matching strengths with opportunities in the Third Frontier Project, Ohio can build a vibrant and progressive economy.

  
  Yet, as important as the Third Frontier Project will be, it is only the first step because there is much more that we must do if we are to be the "leader among states and nations" that Governor Taft would have us be.

  Therefore, we also must call upon the Ohio Board of Regents, the other leaders of Ohio's higher education community, and our Governor and State Legislature to:

  First, develop a comprehensive vision for Ohio -- a vision that asserts the strengths of our state as well as its aspirations for national and international leadership.

  Second, we must structure a state system of higher education that includes:

  • A group of two-year, four-year, and graduate- colleges and universities, appropriate in size, number and location, to move our state forward from an educational deficit to an educational surplus and also to meet regional research needs; and it should include
  • A group of no less than four major research universities of national and international stature -- The Ohio State University, the University of Cincinnati and The University of Akron -- serving our major population centers, North to South -- and one other, arguably, Ohio University.

  Third, we must create a legitimate and rational basis for fully funding each of the component missions of public higher education -- teaching, service and extension, continuing education, professional education, research and technology development -- each in the amount necessary to redress 30 years of neglect, and to promote Ohio as a leader.

  And Fourth, we must create a legitimate and rational pricing structure among our colleges and universities.

  As it is, the pricing structure does not reflect quality; pricing anomalies have further been exacerbated by tuition caps, so that in the process, the highest priced university now collects $57 million more for every 15,000 students than the lowest priced university. That is not rational, and it is not good public policy.

  In short, Ohio must restructure and fund its State System of Higher Education to new standards of excellence.

  These initiatives are an important start, but they are only a start.

  There is much more that we must all do in Ohio, lest our state fail to capture its fair share of economic progress, lest Ohio not even be able to catch up or come close to the progress made by other states.

  Moving forward is not necessarily progress, if your competition is still passing you by.

  Thank you, Mr. Chairman and members of the committee. I would be pleased to answer any questions you have.

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