Chair Hartung, Members of the Committee:

Thank you for the opportunity to testify today on this important matter. I am here as the president of the Interinstitutional Faculty Senate, but more importantly, as a working faculty member. As such, I want to speak to you in human terms, about the meaning of these deliberations from the ground level perspective of someone who deals on a daily basis with the outcomes of the budgeting you do.

The first thing I should tell you is what the infusion of funds we got accomplished for me and some of my colleagues over the last biennium. Fifty-one percent of my appointment is with the Institute of Portland Metropolitan Studies, a part of the College of Urban and Public Affairs at PSU. We provide a variety of research products and other services which, in many cases, the small jurisdictions of the region depend on in the formulation of public policy. Let me describe some ramifications of the increased funding for our capabilities. For the past several years, our geographic information systems specialist used outmoded equipment to generate computer assisted maps. Today, because extra money was added to our budget as a result of the last budget increase, she has a state-of-the-art computer and programs that have maximized her productivity in GIS, enabling us to do more faster for our constituency. Moreover, the new equipment has allowed her to do state-of-the-art design for our magazine, Metroscape, which some have characterized as the best publication to come out of PSU. That actually has had a further ripple effect, in that we are able to save money on printing, because we don't have to pay a service bureau to make our copy camera ready.

Another fraction of the increase that filtered down to us has been used to hire more graduate assistants which in turn, allows us to take on more work. This has had two important outcomes: 1) we are able to give more masters students hands-on experience in researching real-life public policy problems, and 2) it allows us to attract better graduate students to the college than in the past. These are people who likely would not be at PSU if not for this money, because they could command generous stipends at other institutions.

We can get good students, but we ought to have excellent faculty teach them. This is one of our key concerns as we struggle to keep the institution competitive. In that regard, let me tell you about a scholar whose identity I've veiled a bit because his story is unfolding as I speak. I have a very close friend who is a foremost student of Native American life. He is the author of two important books and countless articles. He aspires to start a Native American Center at PSU. He is one of the most respected citizens of the university community. However, he is married to a young woman who is a promising scholar. She teaches at a prestigious university in another state. They have had a commuter marriage for the past several years and want, understandably, to be together. They are currently in negotiation with a Big Ten university which will probably give them both full time jobs at higher salaries than they can get at PSU. What has been offered them at PSU is, in anticipation of the budget difficulties of the next biennium, what we can afford a 60 percent position for his wife. Not surprisingly, this is not enough, although my friend doesn't really want a raise, just a full-time job for his wife. The irony of the situation is that they desperately want to be in Oregon and at PSU. He has assured me that even if they are forced to go to the Midwest, they will try to maintain a home in Portland for the summers.

This is a story that could be multiplied, with variations in detail, many times over the last several years. Does it matter? Aren't there many bright, eager young people out there with vast potential anxious for an opportunity to prove themselves? Indeed, there are. All over the system, we have employed them. The problem is that, too often, like a Triple A farm team, we develop them and send them on to the A big leagues where they become stars. We must build this system, not someone else's, by stocking it with stars we then keep. The way to do this is not to pamper faculty, but to pay nationally competitive salaries that offer a reasonable economic incentive to stay put and to have the wherewithal to attract bright young people when they become available.

Whatever else our budget struggles are about, they are, first and foremost, about students. The new budget model has done a great deal to keep us focused on our mission at both the macro and micro levels. Under the BAS model, PSU departments characteristically allocated resources according to what faculty wanted to teach and what seemed popular. This was because they knew that funding would not vary much whatever the course mix, barring some grave miscalculation. The new budget model has forced far more planning than ever before at the departmental level and thus much greater efficiency in the allocation of resources, largely because it is exquisitely sensitive to the real needs and desires of students. Fortunately, this doesn't mean that we can't have small or less popular courses. It does mean that we are constantly making judgments about what is and is not important to students and compelling to the institution when we think about how to deploy our resources. That alone is a major boon to the university, as it enforces a discipline that reaches down to each level. But the budget model, to work, has to be well funded. To do less is to undermine the very principle on which it functions and to return us by default to a crude version of the BAS model. For without enough resources to allocate, institutions will have to be subsidized by the system which will, in turn, lead to the former fail-safe mode of curriculum planning. We will, in short, be back where we started from. That is a place that worked well for neither the schools nor the students.

I want to conclude with two thoughts derived from my teaching and research interests - the history of medicine and the history of technology and from my recent experience. Paul Starr, in his Pulitzer Prize winning study of 1982, The Social Transformation of American Medicine, makes a telling point about the development of medical education in the states in the last part of the nineteenth century and the beginning of the twentieth, that provides insight into our situation in higher education in Oregon at the beginning of the twenty-first. He noted that many state legislatures recognized after the germ theory of disease and other advances revolutionized medicine, that many pathologies could now be dealt with more effectively than ever before. They knew that this was the time to build reputable medical schools that would turn out physicians versed in the new medicine to protect their populations, thus to make their states truly viable modern societies. But in most cases, what legislators decided was that their states should only tend to local needs, not that they should invest in building nationally competitive institutions. They reasoned that their purposes were limited and that research in medicine is a public good. Not enough benefit could accrue to the society at large of one state to justify the cost of creating a world class institution. They therefore invariably followed a strategy of a rational under investment in the local medical school. A good enough would be--and was for some time--good enough.

As an analogy, this seems to me to explain a lot about the history of higher education generally in Oregon. Let someone else be prestigious; Oregon has had only to support good enough institutions. But the days of good enough are clearly over. We struggle for purchase in a global economy and society with other nations and other states. Having taught at two of Japan's leading universities last spring, I can tell you that the Japanese, Koreans, and Taiwanese faculty and students one encounters there believe that they are competing directly with us and everyone else in the world, that in order to win this competition their students must be as well prepared as possible on every front. That is why in an otherwise stagnant economy, the Japanese government pours money into both public and private schools.

One example of the global challenge: the federal government, under pressure from business, created the H-1B visa program which brings enough foreign scientists, engineers, and programmers into this country to staff our high technology industry. Why? Because we can't turn out enough such workers. But the H-1B program will, for political reasons, soon reach its potential to address our high tech labor shortage and another extension will probably be politically insupportable. Nevertheless, the demand will still be there. The solution of business will simply be to ship those high level jobs to Korea, Taiwan, Bangladesh, and Bangalore State in India. Bill Gates himself has promised as much. We in Oregon can do our part to meet this challenge by funding to the maximal extent the higher education of great engineers taught by world class teachers.

We know beyond a doubt that sound higher education is one of the keys to a secure and prosperous future for our state. But not just a good enough education. We need to reach for greatness. Rational under investment in higher education is simply not an option anymore.