Legislative update: a briefing for faculty and staff of the University System of Georgia, No. 2 (Jan. 14, 2002)

LEGISLATIVE UPDATE
A Briefing for Faculty & Staff of the University System of Georgia

No. 2, Jan. 14, 2002

Governor Recommends Building Boom to Fix Economy

Members of the Georgia General Assembly were expected to be in Atlanta today for the formal kick-off of the 2002 Legislative Session. It will be a busy week as the full body convenes for five days before breaking for the Martin Luther King Jr. state holiday next Monday.
The work of the Joint House and Senate Appropriations Committees got off to an even earlier start last week, as members of these groups gathered

for hearings on the FY2002 Amended Budget. Gov. Roy E. Barnes jump-started the committees' proceedings on Tuesday, Jan. 8, with an address in which he outlined his budget priorities for the remainder of the current fiscal year. Stimulating Georgia's sagging economy was foremost in his mind.
"Our economic condition has become more serious since Sept. 11, but Georgia still remains in better financial shape than

many other states," Barnes said. He noted that Tennessee has had to cut many state services, Alabama is facing a second round of cuts to public education and Florida's projected $1 billion deficit has forced state officials to order a hiring freeze on teachers and cut critical health-care services.
"It has been over 10 years since Georgia has been forced to make cuts to its existing budget, and even

longer than that since the state has faced such a significant decline in revenues," the Governor said. "The good news is that we knew an economic downturn was coming, and we have been able to prepare."
"The amended budget I present to you today does what these other states have not been able to do; it keeps our reserves full, eliminates no existing
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Chancellor Outlines System's FY '02 Amended Budget Needs

Chancellor Thomas C. Meredith's first full week at the Board of Regents involved not only responsibility for the lengthy agenda of a board meeting on Jan. 8-9, but the presentation of the System's FY 2002 Amended Budget to the state's Joint House and Senate Appropriations Committees on Jan. 10.
In this address, Meredith focused first on the importance of two cornerstone additions in the University

System's supplemental request -- $30 million pledged by the Governor to the regents to help offset funding challenges resulting from semester conversion and the Governor's recommendation that $19.4 million be allocated to cover increases in the employer's share of health-insurance premiums imposed by the System's health-care providers over the past year.
The $30 million in

semester-conversion funds is "a critical item," Meredith stressed. "Our institutions are counting on these dollars, and commitments regarding the academic year have already been made. These funds are essential for us to meet our teaching responsibility."
Regarding escalating health-care costs, the chancellor noted that the recent addition of a Preferred Provider Organization (PPO)

option has helped to control the System's health-care costs. Last year, the legislature agreed to give the regents only a portion of the funds needed to cover an increase in the employer's share of premiums that went into effect Jan. 1, 2001. The $19.4 million is needed to cover the rest of the 2001 increase, in addition to a second increase that took effect this month.
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state services and does all this without layoffs or taxes increases," Barnes said.
The cornerstone of his budget proposal is an aggressive bond package that takes advantage of historic low interest rates to finance the building of schools, highways and other capital construction projects.
"By stepping up the construction schedule for schools, roads and other projects throughout the state, we can create thousands of opportunities for employment and give Georgia's economy a shot in the arm when it needs it the most," the Governor said.
The first part of the package provides $621 million to fast-track construction of K-12 facilities, including $501 million to build
Next Up:
Chancellor Meredith's FY `03 Budget Address, Tuesday, Jan. 22, 2:45 p.m., Room 341 of the Capitol

additional classrooms, thereby reducing class sizes, and $119 million to finance regular education-related capital-outlay needs.
The second part of the bond package will provide more than $726 million to finance:
N 28 capital-outlay projects within the University System, including two passthrough projects that the System will manage, totaling $219.4 million;
N construction at five Department of Adult and Technical Education (DTAE) campuses; and
N the acceleration of the Governor's Road Improvement Program.
Barnes' recommendations provide construction funds for the first three projects on the Board of Regents' Major Capital Outlay Priority List and design funds for Projects 4-7. These projects are:
N $33.3 million for the Health Sciences Building at the Medical College of Georgia;
N $18.2 million for the Bartow Center at Floyd College;
N $31.9 million for the Klaus Advanced

Computing Building at Georgia Tech;
N $975,000 for the library addition at Georgia Southern University;
N $1.2 million for the Social Sciences Building at Kennesaw State University;
N $300,000 for the Student Center for the Clarkston campus of Georgia Perimeter College; and
N $690,000 for the campus utilities loop for Middle Georgia College.
"These and the other projects listed in this proposal are all important to our future prosperity," the Governor said. "Advancing them allows us to provide a better education for our students, bring economic development to every area of the state and create much-needed jobs. And, during a recession, capital spending like this creates an economic impact many times larger than the money we invest in it."
Another of the Governor's recommendations with direct bearing on the University System involves allotting $23.6 million

from tobacco settlement funds to continue the work of the Georgia Cancer Coalition, a project he initiated. All but $1.5 million of these funds will go to the Board of Regents to fund a Georgia Research Alliance eminent scholar for cancer-related research in neuroscience at the Medical College of Georgia, set up an information system for the coalition, fund challenge grants to health-care providers and cancer-education grants, among other projects.
Revisiting his education reform efforts of the past three-plus years, Barnes said state officials are on the verge of real success, and he therefore did not recommend any cuts that will directly affect student instruction.
In order to ensure that every school in the state has the same opportunity to improve, he recommended $9 million in additional funds for schoolimprovement teams that will help the 163 low-performing schools that have requested state assistance, using the America's Choice program as a model. He
See "Building Boom," Page 3 ...

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also recommended $34 million in additional funds for the Early Intervention Program and $4.3 million to expand the development and implementation of Criterion-Referenced Competency Tests (CRCT) in grades one through eight.
"These tests are the key to real

accountability in all of our schools and will help us ensure that our children are learning," the Governor said.
Reflecting the tremendous increase in security concerns since the Sept. 11 terrorist attacks, Barnes recommended close to $600,000 (with more to come in the FY '03 budget) to help the Division of Public Health enhance bioterrorism preparedness

and response in Georgia and nearly $1.4 million to help the Department of Public Safety and the Georgia Bureau of Investigations expand the Georgia Information Sharing and Analysis Center. Both of these amounts will match federal funds being allotted to the agencies.
Tom Daniel, senior vice chancellor for external activities and

facilities at the Board of Regents, is optimistic about the next 39 days of the legislative session. "Our funding partners realize the importance of public higher education," he said. "We do have several wonderful highlights in the budget recommendations."

Chancellor
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To help alleviate the state budget crunch, the Office of Planning and Budget asked the regents to return nearly $12.2 million in Major Repair and Rehabilitation (MR/R) funding -- the unallocated portion of the $54 million allotted to the University System in the original FY '02 Budget. In his proposal, the Governor recommended $31 million in bonds to cover the System's MR/R needs for the remainder of FY '02 and for FY '03.
The System's 34 institutions will have to absorb cuts totaling almost $35 million in order to meet the mandated 2.5 percent reduction in the funding formula, Meredith

noted. Most of the institutional cuts for FY '02 are in the areas of vacant or lapsed positions ($18.1 million), travel reductions ($2.2 million), cuts in the purchase of operating supplies ($7.9 million) and cuts in equipment purchases ($6.6 million). Absorbing these reductions will be difficult, but severe problems will result without the $30 million pledged to cover semesterconversion challenges, the chancellor cautioned.
Meredith also called budget writers' attention to the needs of the state's public library systems, noting that the Governor has recommended spending $1.66 million to

fund the purchase of Internet-filtering software for computers. The chancellor mentioned three other library priorities:
N $2 million for the purchase of books and materials;
N $2 million to reactivate a construction program that has been dormant since the mid-1990s and address needed repairs and renovations; and
N $2.3 million for the purchase of computers.
The Governor pushed forward $31.7 million in lottery funds for the System's Special Funding Initiatives from the FY '03 to the FY '02 Amended Budget. This will provide the requested $15 mil-

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lion for the Equipment Technology and Construction Fund (ETACT), as well as assistance with such Special Funding Initiatives as GALILEO (nearly $2 million), P16 programs ($180,000), Connecting Teachers and Technology ($2.7 million), and Connecting Students and Services ($527,000).
Meredith made a special plea for funds to support the University System's Eminent Scholars program, which he noted has been "a terrific tool for bringing top talent into Georgia," along with their research dollars and related business interests. The program,
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he noted, has helped a number of System institutions to forge new relationships with the private sector, as they have had to amass matching funds from the local community. So far, seven institutions have secured the necessary commitments from 13 private donors to fund Eminent Scholar chairs, but the System has not yet received any matching state funds, and none are recommended in the FY '02 Amended Budget. The regents had requested $4.75 million for this purpose.
"Given our current budget situation, I can understand the Governor's lack of funding recommendation, but I urge you not to forget this important program," the chancellor said. "You have been generous in paying our faculty top salaries, so, coupled

with the Eminent Scholars program, we are bringing top talent into this state."
Turning to the capital outlay portion of the budget, Meredith said the Governor's recommended funding of 28 projects totaling $219.4 million directs $201.4 million to the University System. The recommendation includes $86.5 million to fully fund the first three projects on the Major Capital Outlay List and provide design money for the next four. The first of the six previously funded major projects to come online this year is the new Agricultural Sciences Building at Abraham Baldwin Agricultural College. The Governor has recommended equipment funding ($400,000) for that project and promised to equip the remaining projects next year as they are completed.
The Governor also recommended seven minors projects

totaling $27 million and 10 other projects totaling $68 million. The latter projects include five related to University System institutions, a Yamacraw facility, the Governor's Traditional Industries program, the Georgia Research Alliance, and two passthrough projects -- the Georgia Military College and the purchase of the former Tift College campus for the Governor's Leadership Institute.
Another part of the capital outlay package is a $5.2 million recommendation in bonds for the Medical College of Georgia's new Interdisciplinary Research Center, which is well on its way to completion. The MCG Foundation, the MCG Research Institute and other, non-state sources provided $21 million, the majority of the cost -- to build the center.
"As you can see, there are serious challenges we must

meet that have both short- and long-term implications if we are going to maintain the quality we have established in higher education in this state," Meredith told the legislators. "We will continue to work with the Governor and with you to meet these challenges."
The chancellor ended his address by pledging to enhance the partnership between the General Assembly and the University System and to increase accountability. He was welcomed to the state by Sen. George Hooks (D-Americus), chairman of the Senate Appropriations Committee and a graduate of Auburn University, who commented that "You should be able to work with us very well."

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