Purdue Letter From The President

The Indiana General Assembly's failure to agree on a state budget in time to avoid a special session is a disappointment to all Hoosiers, especially since there was every reason for optimism when the biennial budgeting process started. There always are difficult decisions to make when allocating money to crucial programs, but with the advantages of a healthy surplus and excellent revenues, our governmental leaders seemed to be in an ideal situation to get the job done on time and with an outcome that would put the state in an excellent financial position for the next two years.

Now, instead of moving forward, we face an indefinite period of uncertainty. The universities, public schools, and other institutions that depend on state appropriations will remain in a financial limbo until the situation is resolved. This means that the early summer, when Purdue should be preparing for a new academic year, will be occupied largely with the very intense internal budget process. Without a state budget, Purdue and Indiana's other six public colleges and universities will not be able to establish student fees, make financial aid decisions, or determine faculty and staff salaries.

Another matter of great concern is the fact that the last iteration of the budget in the legislature's regular session treated higher education's operating budget request very poorly. The version passed by the Senate on April 29 and later rejected by the House ignored the recommendations of the Higher Education Commission on operating appropriations as well as the special needs of the Cooperative Extension Service and the statewide Technical Assistance Program. It would have provided only an inflationary increase of about 3.5 percent in recurring funds. The budget included an additional 1 percent in non-recurring money, but this increment has very limited value. It cannot be applied to ongoing programs or salaries, because it would disappear after the 1997-99 biennium. It is clear that the late-session deliberations did not give the universities high priority and that our legislators have not understood the competitive challenges our institutions face.

On the bright side, the legislature has shown strong support for the universities' capital needs throughout the budget process. We have received excellent support for our capital priorities, and for the first time, a provision for infrastructure support has been included in the repair and rehabilitation formula. This funding, if finally approved, will provide an excellent vehicle for maintaining the quality of our campuses. The budget also provided much-needed increases for student financial aid.

As I write this, I have no way of knowing when the legislature will meet in special session or what the budget outcome will be. I strongly urge our senators and representatives to review the higher education portion of the budget and to add at least another 1 percent to the recurring funding. A strong system of colleges and universities is indispensable to Indiana's future prosperity. Higher education not only is the key to success for young people, but also the engine of economic development. We will not be competitive as a state if we fail to invest in these institutions now when the resources clearly are available.

One group that recognizes the importance of our universities is the more than 100 business, government, and education leaders who gathered in Indianapolis April 1 for the Midwest Summit on the Future of American Innovation.

The event was one of three regional summits designed to chart a research and development strategy to ensure America's leadership in innovation. The Council on Competitiveness co-sponsored each of the summits. Purdue, Georgia Tech, and the University of California at San Diego were the host institutions.

Participants in Indianapolis included Gov. Frank O'Bannon, the heads of major corporations, members of Congress, and representatives of numerous federal agencies concerned with research and development.

Several major themes emerged from the daylong discussions:

• Knowledge and creativity have become the most valuable commodities on earth.
  
• America will face very intense economic competition from around the globe, including the emerging Far East economies and a united Western Europe.
  
• A cooperative effort involving private industry, the universities, and government is essential for our future national prosperity, as well as for the individual states.
  
• Universities -- because of their research capabilities and their role in educating the work force -- are the engines for that prosperity.

The meeting was an exciting beginning to a movement with huge implications for our future. The next step will be a national summit. I'll keep you informed as the planning moves forward.

A very high honor has come to a Purdue professor who has devoted his life to the study of entrepreneurship. Arnold C. Cooper, the Louis A. Weil Jr. Professor of Management, will receive the 1997 International Award for Entrepreneurship and Small Business Research. The recognition is from the Swedish National Board for Industrial and Technical Development, the Swedish Foundation for Small Business Research, and Telia AB, a major telecommunications firm in Sweden.

Professor Cooper has elected to donate the award's $50,000 prize for scholarships in Purdue's Krannert School of Management. It's a decision that typifies his devotion to his students.

Sincerely,

Steven C. Beering

President