sealPurdue Letter from the President

April 2003

A monthly letter from President Martin C. Jischke

All over America, legislatures have been struggling with the problem of crafting state budgets in an economy that has depleted government revenues and put increasing pressure on public services.

I think the people of Indiana can be proud of the way our state is meeting this challenge.

The budget and economic development bill passed by the General Assembly in April is a significant achievement. It may be the crucial first step on the long road to a new economic era.

Faced with a growing deficit and persistent gloomy economic forecasts, the legislators and Gov. Frank O'Bannon decided not to let the problems of the present keep Indiana from investing in its future. One of the most remarkable things about the 2003 session of the General Assembly was the fact that five different economic development proposals received serious consideration. In addition to the governor's Energize Indiana plan, both political caucuses of both houses offered plans for bolstering the economy.

The compromise budget that ultimately passed included the most sweeping economic development package Indiana has undertaken in at least 15 years. One of the most promising aspects of the bill is increased funding for the 21st Century Research and Technology Fund. Originally created in 1999 with a commitment of $25 million a year, the fund is designed to produce new economic initiatives by encouraging universities and private businesses to work together. For example, Purdue and other universities have worked to develop and improve products for the orthopedics industry, in which our state is a leader. For each of the next two years the investment in 21st Century Fund will increase to $37.5 million. I believe this can have a significant impact.

The Legislature made an important decision to begin supporting research at our universities. This is a very significant recognition of the economic power of new knowledge. The research adjustment will total about $2.5 million for the West Lafayette campus, and we will target this money to discovery initiatives that have the potential to help Indiana's economy grow.

The state also decided to invest in biomedical engineering at Purdue. Because of growing demand in Indiana for people with this expertise, the biomedical engineering undergraduate program is the only academic program for which we had requested start-up funding from the state. Besides the programmatic appropriation, the budget included $13 million in bonding authority for a new Biomedical Engineering Building. The Legislature also approved bonding for the multipurpose Millennium Engineering Building at West Lafayette and a music building at Indiana University-Purdue University Fort Wayne.

By historical measures, this is not a great budget for higher education. The new operating funds Purdue will receive do not restore the funding reductions the state has made in order to manage its spending in the current biennium. In addition, unavoidable new expenses — such as increases in benefit costs — will consume all of the increase and more. However, in the context of the current fiscal situation, the state has made a remarkable effort to start turning the economic ship by investing in the power of new ideas and the potential of our people. And I am grateful.

Although there is justifiable concern about whether state revenues can support the two-year spending plan, if we can find a way to hold the budget together, Indiana has the opportunity to plant the seeds for a more diverse and robust economy.

Purdue is committed to focusing its resources and the intellectual power of its people on creating the best possible life for the people of Indiana and the best possible economy for the state. I believe our governmental leaders have made a serious commitment to forging a partnership with education and the business community to build on our strengths to create a new and more robust economy. This budget won’t solve all our problems, but it allows us to make a beginning. If we work together, we can succeed.