E-Insight

March 2004

Colorado 's Economic Health Depends on Universities

The following is a letter to the campus community by Larry Edward Penley, President of Colorado State University

When Colorado State University last fall announced within a few weeks more than $60 million in federal research projects, it was more than just good news for CSU. It was good news for the citizens of Colorado. Here are some reasons why.

This research will address serious challenges that confront society - issues like cancer, infectious diseases such as West Nile virus and the inherent limitations of existing computing technology. Colorado's research universities are leaders in many fields, including nanotechnology, biomedical research, natural resources and information technology - the kinds of research that make a difference when a business considers relocation.

Executives in knowledge-driven companies that offer high wages know they can collaborate with CSU faculty and hire well-educated graduates of our science, engineering and professional programs. Fresh ideas in these exciting areas offer the potential for new drugs, new IT products and innovative private/public partnerships.

There is also the straightforward economic impact of research universities. For every dollar invested by the state, CSU generates more than $9.50 from other sources for the Colorado economy.

Financial Crisis Facing Universities

In advance of the current Legislative session, I joined higher education and business leaders at the state Capitol in Denver to discuss the financial crisis facing our universities. The issues we discussed aren't simply of concern to those in higher education. This lack of funding also holds significant consequences for Colorado 's economy and for the well-being of our entire state. Colorado 's research universities are economic drivers, and their health matters to our citizens and to the global competitiveness of Colorado companies.

Just as good news for our research universities is good news for the state, so too, is bad news. And the importance of greater global competitiveness for Colorado cannot be overstated. The competition of the past was between states centered on low costs and low taxes. Today, the competition is about ideas from research and development and a knowledgeable, skilled labor supply in science, engineering and management. That competition is with the emerging economies of Eastern Europe and the increasingly sophisticated economies of India and China, where world-class, U.S.-modeled research universities now exist.

To succeed in global competition, Colorado must possess a vision that incorporates higher education and, particularly, its research universities. That vision must address the creation, retention and attraction of businesses in information science and biomedicine. But to be successful, it must assure those businesses of access to research and development where it is being done. And that means access to a healthy and vital CSU and CU-Boulder.

State Reductions in Higher Education   

It is understandable that support for higher education is a challenge. There are many demands on our state's budget, and those demands are likely to grow with the growing numbers in our K-12 schools and the increasingly large number of the aging population who are reliant on Medicaid. But Colorado 's support for higher education is relatively low compared to other states and continues to decline. Over the last 25 years, Colorado has reduced its investment in higher education per $1,000 of personal income by more than half (-54.6 percent), the second largest percentage reduction in the nation. Recently, this trend has worsened. In only three years, the state's general fund support - adjusted for inflation - has fallen 42 percent at CSU.

Change is now necessary. Funding must track student enrollments: it should encourage greater participation by high school graduates in higher education. It must recognize the different missions of our universities, including the expensive but critical investments in research universities, and it must provide for universities to escape TABOR restrictions that now treat tuition as if it were tax revenue.

Autonomy for Research Institutions

Research universities must be granted the autonomy to take responsibility for their own fate, increasing even further their federal support and seeking additional support from alumni and friends - and, if necessary, raising tuition and fees. But universities should not be privatized. Colorado 's economy is too dependent on its universities to lose their collaboration and support. Universities must meet the challenge of being a public good, providing increased access with additional funding for scholarships - need-based and merit. Universities must raise quality, assuring students of the value of remaining in Colorado for education and for high-paying jobs upon graduation.

Higher education must continue to work closely with state government and business leaders to find real, sustainable solutions to ongoing financial challenges. In doing so, we must recognize the vital - and unique - role that research institutions play in the state of Colorado and why what's good for our research institutions is good for the citizens of our state.