School of Medicine Alumni

October 9, 2010

Dr. James R. RamseyPresident, University of Louisville

I appreciate the opportunity to visit with you.

Thank you….

2

3

A little bit on the economy

4

Sources: NBER, BEA, and BLS.* Lowest level during the current recession. The next two quarters (2009: III and IV) have been positive.

5

Peak Decline in real GDPDec-07 (IV) -3.70%Mar-01 (I) 0.40%Jul-90 (III) -1.40%Jul-81 (III) -2.90%Jan-80 (I) -2.20%Nov-73 (IV) -3.20%Dec-69 ((IV) -0.20%Apr-60 (II) -1.10%Aug-57 (III) -3.70%Jul-53 (II) -2.60%Nov-48 (IV) -1.70%

We know that nationally times have been unprecedented

National Non-Farm Employment(in thousands)

Dec-0

7

Jan-

08

Feb-0

8

Mar

-08

Apr-0

8

May

-08

Jun-

08

Jul-0

8

Aug-0

8

Sep-0

8

Oct-08

Nov-0

8

Dec-0

8

Jan-

09

Feb-0

9

Mar

-09

Apr-0

9

May

-09

Jun-

09

Jul-0

9

Aug-0

9

Sep-0

9

Oct-09

Nov-0

9

Dec-0

9

Jan-

10

Feb-1

0

Mar

-10

Apr-1

0

May

-10

Jun-

10

Jul-1

0

Aug-1

0-800

-600

-400

-200

0

200

400

600

-131 -54

6

• The economy has lost momentum – but should avoid a “double dip”– Accelerated growth first half of the year. Inventory build

up– Consumer is saving – long term a good thing– Business also cautious - cost containment – not adding

workers• Slow/very slow recovery

7

National Economic Thoughts

Kentucky’s Budget Outlook

I always start with employment in the state:

People working = income - state income taxes

- sales tax

Sales/Income => 70% of state’s general fund

8

Kentucky has not been immune to those impacts

Nonfarm employment in thousands

9Jan

-99Jul-9

9Jan

-00Jul-0

0Jan

-01Jul-0

1Jan

-02Jul-0

2Jan

-03Jul-0

3Jan

-04Jul-0

4Jan

-05Jul-0

5Jan

-06Jul-0

6Jan

-07Jul-0

7Jan

-08Jul-0

8Jan

-09Jul-0

9Jan

-10Jul-1

01750.0

1770.0

1790.0

1810.0

1830.0

1850.0

1870.0

1890.0

Jan '991769.4

Oct '001833.6

Jul '031777.6

Dec '071872.4

Aug '101768.6

Kentucky Economy:Manufacturing – Our Bread and Butter

(in thousands)

10

Jan-99

Jul-99

Jan-00

Jul-00

Jan-01

Jul-01

Jan-02

Jul-02

Jan-03

Jul-03

Jan-04

Jul-04

Jan-05

Jul-05

Jan-06

Jul-06

Jan-07

Jul-07

Jan-08

Jul-08

Jan-09

Jul-09

Jan-10

Jul-10

200.0

220.0

240.0

260.0

280.0

300.0

320.0

308.3

Aug '10212.5

So we must build new economic clusters

• Healthcare/life sciences• Logistics/distribution• Advanced manufacturing• Renewable energy• Business services

11

Things to note

• Economic transformation slow• Education all education more

important than ever

(We are in this together)

12

13

What are we doing?

1. Continuing re-engineering of processes and expense management

2. Aggressively improving balance sheet management, with an emphasis on converting underperforming assets

3. Increasing clinical income to support education and research4. Increasing contract research and commercialization income5. Creating private sector partnerships6. Enhanced fund raising7. Being creative in expanding the research mission through

innovative financing tools like the tax increment financing plan

Seven Strategies for Moving Forward

What our state needs to do!

The “Leaky” Bucket

14

Kentucky Chamber of Commerce: The Leaky Bucket

15

Other “Leaks”

• Medicaid/health issues• Public employee pension

– KTRS– KERS Defined benefit programs

16

CPE/LEGISLATIVE RESEARCH COMMISSION RESPONSE TO DATA REQUEST SEPTEMBER 1, 2010

Category Rank Among KY Public Institutions

PERCENTAGE INCREASE IN THE 6-YEAR GRADUATION RATE 1

INCREASE IN THE # OF BACCALAUREATE DEGREES AWARDEDPercentage increase

12

PERCENTAGE INCREASE IN ALL DOCTORAL DEGREES AWARDED 1

INCREASE IN THE # OF DOCTORAL DEGREES AWARDED- RESEARCH/SCHOLARSHIPPercentage increase

1

1

INCREASE IN THE AVERAGE ACT SCOREPercentage increase

11

PERCENTAGE INCREASE IN FALL ENROLLMENT FTE 3

PERCENTAGE INCREASE IN FULL-TIME UNDERGRADUATE RESIDENT TUITION AND FEES (ANNUAL RATE) ** LAST PLACE IS GOOD AS THIS REPRESENTS THE LEAST % INCREASE IN TUITION….

8

Challenges, but…To Close on a Good Note

17

Thank you –

Tough times are not over

Leadership is the key

18