Interim Joint Committee on Education


Subcommittee on Postsecondary Education


Minutes of the<MeetNo1> 2nd Meeting

of the 2007 Interim


<MeetMDY1>September 10, 2007


The<MeetNo2> second meeting of the Subcommittee on Postsecondary Education of the Interim Joint Committee on Education was held on<Day> Monday,<MeetMDY2> September 10, 2007, at<MeetTime> 10:00 AM, in<Room> Room 131 of the Capitol Annex. Representative Mary Lou Marzian, Co-Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Charlie Borders, Co-Chair; Representative Mary Lou Marzian, Co-Chair; Representatives Jim DeCesare, C. B. Embry Jr., Bill Farmer, Jim Glenn, Reginald Meeks, Charles Miller, Russ Mobley, Tom Riner, Carl Rollins II, and Charles Siler.


Legislative Guest:  Senator Tim Shaughnessy


Guests:  Mr. Larry Owsley, University of Louisville


LRC Staff:  Jonathan Lowe and Lisa Moore.


Representative Marzian introduced Dr. Shirley Willihnganz, Provost, University of Louisville (UofL), Ms. Cathe Dykstra, Executive Director, Project Women, Inc., and Ms. Jennifer Jewell, Project Women graduate, to make a presentation on "The Louisville Scholar House: A Collaboration Between the UofL and Project Women". Ms. Dykstra was featured on a video that was played for members explaining why Project Women is needed, who is eligible to participate, and what assistance and support the program provides.


Ms. Dykstra said Project Women recognizes the challenges that single mothers face in trying to provide housing, childcare, and basic necessities for their children without adequate income or the education necessary to obtain career-track employment. She said Project Women believes that helping single mothers change their lives through the attainment of a college degree brings long-term changes and new opportunities for them and their children.


Ms. Dykstra said that women entering Project Women's programs must meet the following qualifications: be single; have a child, children, or be pregnant; be without a stable home or in danger of losing their home; have a high school diploma or GED; and have the desire to pursue a college degree.


Ms. Dykstra said Project Women provides a safe and motivational environment that supports single mothers in obtaining a baccalaureate degree. She said some services offered by Project Women include housing assistance; educational support; case management and other support; and peer support and community activities.


Ms. Dykstra began a PowerPoint presentation and said in 2005, eight families were enrolled in the residential program. In 2007, the program was expanded to 20 families participating in the residential program, 77 participants in the pre-residential program, and 13 participants enrolled in post-program support. In 2008, 56 families were enrolled in the residential program, 150 participants in the pre-residential program, and 30 women had exited the residential program, but continued to receive ongoing support. She said barriers to success include childcare; housing; transportation; employment; retention rate for students; and a lack of support systems.


Ms. Dykstra said outcomes for Project Women include: 19 women receiving college degrees; 50 percent of participants have continued their post-secondary education after exiting the program; 73 percent of the participants have exited the program to stable employment; 95 percent of clients did not have a subsequent pregnancy after their participation in Project Women; and 100 percent of Project Women participants have exited the program to stable housing.


Dr. Willihnganz explained that UofL's mission is to be a premier, nationally recognized metropolitan research university. She said to be accountable to that mission, UofL must engage in activities that will garner national recognition, substantially contribute to the well-being of the Commonwealth through educational and outreach programs, and develop new knowledge that will extend to new realms and audiences. She said the collaboration with Project Women allows all of that, and directly helps make individual lives better, now and for years to come.


Dr. Willihnganz discussed UofL's commitment to show accountability to the citizens of Kentucky for their investment in the university. She said Project Women is a program that is accountable by providing on-campus childcare for Project Women participants as well as for UofL faculty, staff, and students. She said a model school could provide exceptional childcare, but also could use resources of a great research university to give added value to the children by using the facility to expand research capacity, bring in additional grants, and to train potential early childhood teachers. She mentioned neighborhood development, more people with college degrees in the state, and community partnerships as sources of accountability. She also said all the women at the scholar house will be eligible for UofL's "Cardinal Covenant", which pays full tuition for anyone at 150 percent of poverty level or below.


Ms. Dykstra discussed funding and said "The Doorway to Hope Campaign" is a comprehensive campaign to build the Louisville Scholar House, including the early childhood model school, as well as to expand the programming to meet the growth in all Project Women programs and create endowment opportunities to provide support for educational costs, childcare, and facility maintenance. She said the Kentucky Housing Corporation (KHC) has provided significant support through the Scholar House award of $8 million in tax credits over a ten-year period. Project Women is very appreciative of federal HOME funds through the Louisville Metro Government that supported the purchase of the portion of the land that Project Women owns that will be used for Scholar House. She anticipates breaking ground for the new Louisville Scholar House facility in mid-October, with completion in the summer of 2008.


Ms. Jewell told her personal story of success in the Project Women program. Ms. Jewell, once homeless, graduated from the University of Louisville with her masters degree, and is currently working on her Ph.D.


Senator Borders said that Project Women was providing opportunity to participants with a GED and who possessed desire, but asked if there were places for participants who may need remedial classes prior to entering into college. He also asked if the program was limited to only 56 participants.

Ms. Dykstra said that Project Women provides the housing in the residential program, but said the pre-residential program is part of the full continuum of care. She said if participants are identified as having a high school diploma or GED, but need remedial courses, this can be accommodated by having students enroll in Jefferson Community and Technical College and then transferring to UofL after completion of 24 credit hours. She said the average age of Project Women participants is between 25 to 32 and many need support and remedial assistance after being out of school for several years.


Senator Borders said he appreciates the emphasis on childcare, as it gives piece of mind to participants knowing that their children are being adequately cared for as they study and attend classes.


Representative Rollins said Project Women is an exciting program because one of the greatest factors to determine whether or not people pursue higher education is the mother's educational attainment level. He asked if 29,000 single mother families and 6,000 single father families was data for the state of Kentucky or in Jefferson County only. Ms. Dykstra said those figures were for Jefferson County only.


Representative Rollins asked if there were other programs similar to Project Women throughout the state. Ms. Dykstra said there are three other projects in development through Scholar House and there is a program named "Virginia Place" in Lexington, Kentucky. He asked if the other programs in the state were as comprehensive as Project Women. Ms. Dykstra said that the collaboration with Project Women and UofL is truly unique with funding support and shared land, but would love to see other programs get the same depth of interaction.


Representative Rollins asked if Project Women serves participants outside of Jefferson County, and Ms. Dykstra said that they do. She explained that since participants are homeless, there are no addresses or zip codes, and anyone is accepted that calls in and participates in the pre-residential program. He asked what the capacity level was of the childcare center. Dr. Willihnganz said the capacity will be 180 children and UofL anticipates at least 56 of those children will be from the Scholar House, while the rest of the slots will be filled by UofL staff and students. He asked if Scholar House children will receive the first priority for childcare, and Dr. Willihnganz said they would.


Ms. Dykstra said that Cochran Elementary School is located right across the street from the Scholar House, which makes for easy transition for families, as well as creating longitudinal research opportunities moving from the early childhood model school to the elementary school. Representative Rollins asked if wrap-around programs would be provided for the children entering into elementary school. Dr. Willihnganz said that wrap around care would be provided, as well as summer care when the children are out of school.


Representative Marzian noted that many of the women participating in Project Women are victims of domestic violence. Ms. Dykstra said 100 percent of participants experienced domestic violence and 87 percent of the children of the participants have witnessed domestic violence. She said that Project Women works very closely with the Center for Women and Families to coordinate services and provide any wrap around services the family may need. She noted the number of women living in poverty is in direct correlation with violence in the homes.


Representative Embry commended Project Women for their efforts and their numerous successes. He asked how many successful and unsuccessful participants exit the program, and if successful participants were assisted in finding full-time employment. He also asked how long the participant receives on-going support after exiting the program.


Ms. Dykstra said the average length of time a participant is enrolled in Project Women is 17 months. She said the primary reason for leaving the program is attributed to participants receiving Section 8 housing. They can move from an apartment into a home for exactly the same cost, which is 30 percent of their earned income, and Project Women supports this. She said Project Women participants can continue through post-program support and this is for an unlimited period of time. All participants are encouraged to come back to the program if they hit a speed bump in the road or need additional assistance. She also noted that the majority of families, around 70 percent, exit the program into stable employment and stay on the right path requiring very little additional assistance. Case managers work with participants on writing resumes, polishing interview skills, and providing contacts to key employers in the community.


Representative DeCesare said Project Women is a model program for the entire state and he is excited that a Scholar House is coming to Bowling Green. Ms. Dykstra said Project Women has received interest from several other cities around the country including: Milwaukee, Wisconsin; Indianapolis, Indiana; Houston, Texas; and Anarundel, Maryland, all of whom are looking at this model because of the collaboration component with UofL, and examining how to provide the same type of program in their own communities that offers the same level of support to single parents.


Representative DeCesare asked how the KHC is involved. Ms. Dykstra said that KHC has been a wonderful partner and has contributed $8 million in tax credits over ten years.

Representative Riner asked if a woman who is homeless, but with a husband who is dysfunctional and drug addicted, would be eligible for a similar type program. Ms. Dykstra said the vast majority of calls she receives are from single parents, but for that type of family, she would recommend the pre-residential program to help find stable housing. She also said this family would be a great candidate for the Safe Havens Program, which Project Women is a referral source.


Representative Marzian said she is pleased with the collaborative efforts and research opportunities for UofL and the childcare facility for faculty and staff on campus. She would like to see this program replicated statewide.


Representative Marzian introduced Mr. Brad Cowgill, Interim President, CPE, and Dr. Allyson Handley, Senior Advisor for Economic Initiatives, Council on Postsecondary Education (CPE), to present a ten year status report on the Research Challenge Trust Fund. Mr. Cowgill said the CPE is in the process of conducting a comprehensive study of the "Bucks for Brains" program   as the ten year anniversary of postsecondary education reform is approaching.


Mr. Cowgill said three terms that members need to recognize are "trusts", "programs", and "guidelines." He said six trusts were created in House Bill 1 in 1997 and are embedded in permanent law of the state of Kentucky and awaiting action by the General Assembly in the form of a budget. He said if a budget places money into one of the trusts then it becomes the responsibility of the CPE to ensure that the money is used in accordance with the terms of the trust.


Mr. Cowgill said programs are aligned with trusts, but a program may involve more than one trust, and a trust may involve more than one program. He said "Bucks for Brains" is a program and involves more than one trust, one of which is the Research Challenge Trust that applies to the University of Kentucky (UK) and UofL, and the other is the Regional University Excellence Trust, which applies to the comprehensive institutions. The program draws from each trust and creates an endowment match program.


Mr. Cowgill said the guidelines are the province of the CPE and are a way of giving an indication to the universities as to the general parameters for donors when seeking a match. The universities look for matching opportunities in the private sector and then ask the CPE for approval. He said if the CPE approves the donor, the money is then transferred into the endowment from both the donor and the budget office.


Mr. Cowgill said there are three advantages to using this type of program and one is continuity. He said the unique thing about the money is that the principal is not spent, only the income that is generated by the investment of the principal. This is a tremendous advantage and makes this program attractive to donors across the country.


Mr. Cowgill said the second advantage is that the money is truly a match. He said initiatives are funded by putting up half the money and then the market is tested.


Mr. Cowgill said the third advantage is the continuity of administration. He said these appropriations are made to the CPE in its capacity as the financial steward. It is the CPE's responsibility to obtain the appropriate information from the universities to ensure that the original objectives of the program, and the guidelines that were adopted for each program, are in compliance.


Mr. Cowgill said in the original education reform act the legislature only created the receptacles for "Bucks for Brains" and did not place any money into these receptacles to fund the program. He said the 1998 budget did appropriate some money into the program, but since the amount of money to run the program was in question at that time, the program was funded through the surplus expenditure plan. He said CPE has administered over $350 million of public funds into the endowment match program and all of those funds have been matched to date through private donors.


Dr. Handley said in 1998, institutional fundraising functions and staff were limited at most of the Kentucky public institutions. Beginning in 1999-2000, public universities began to rapidly ramp up their respective fundraising activities and staff to serve the "Bucks for Brains" matching requirement. She said considering the infrastructure in place and procedural elements that needed to be developed by the CPE and the institutions, it is more accurate to assert that the "Bucks for Brains" program has actually been functioning for five years rather than ten. She noted that five years is a very short time to realize any significant commercialization events resulting from the "Bucks for Brains" faculty research.


Dr. Handley said federal support for research has declined during the past ten years. She also said industry research and development investment has also declined during the same period due to intense entrepreneurial activity on America's east and west coasts. Kentucky must be thoughtful and strategic when investing in "niche" commercialization events generated from university developed intellectual capital and educational and economic development strategies must be aligned more closely to leverage investment.


Dr. Handley explained the term "endowment match program." She said it is a program that matches state dollars with private donations to encourage higher education research activities. The program encourages private giving because donors "double their contributions" to public universities by having them matched dollar-for-dollar by the state. She said endowment proceeds fund chairs, professorships, research scholars, research staff, fellowships, scholarships, infrastructure, and mission support.


Dr. Handley discussed short and long-term goals for the program. She said short-term goals include: growing university endowments; increasing the number of chairs and professorships; and generating increases in externally sponsored research. Long-term goals include: stimulating business development; job creation; and facilitating Kentucky's transition to a knowledge-based economy.


Dr. Handley discussed the areas of concentration. She said at the research institutions, 70 percent of program funds must support Research Challenge programs or disciplines in five new economy priority areas such as human health and development; biosciences; materials science and advanced manufacturing; information technologies and communications; and environmental and energy technologies.


Dr. Handley explained the application process and how the program is administered. She also discussed the kind of funding mechanisms used. She said the Strategic Investment and Incentive Trust Funds are the Research Challenge Trust Fund and the Regional University Excellence Trust Fund. These trust funds are the endowment match program, or the "Bucks for Brains" program. She said appropriated funds housed in a trust fund must adhere to statutory allocation requirements, do not lapse at the end of the fiscal year, and earn interest pending distribution.


Dr. Handley explained the matching requirements. They include: 1) gifts and pledges must be newly generated; 2) gifts and pledges must be from external sources; 3) general fund appropriations and tuition and fee revenue are not eligible for match; 4) the minimum allowable request amount is $50,000; 5) all funds, state and private, must be endowed; and pledges must be in writing and paid in five years.


Dr. Handley said between 1998 and 2004, the General Assembly appropriated $350 million to the program. Of that amount, $300 million was allocated to the state's two research universities and $50 million was allocated to six comprehensive universities. When matched with private giving, this represents $700 million that will be added to the endowments of the state's public universities. She explained the endowment match program and the allocation of appropriated funds to institutions as well as the state investment in the "Bucks for Brains" program. These charts are located in the meeting folder in the Legislative Research Commission (LRC) library.


Dr. Handley gave a brief explanation of the outcomes that have been achieved. They are: 1) between 1997 and 2006, the annual philanthropic support at Kentucky's research universities grew from $88 million to $129 million, or by 47 percent; 2) as of June 30, 2006, a total of $302 million in dispersed state funds had been matched with $282 million in private cash gifts; 3) between 1997 and 2006, the market value of research university endowments grew from $454 million to $1.5 billion, or by 230 percent; 4) the number of endowed chairs at all universities increased from 55 to 211, or by 284 percent; 5) the number of endowed professorships at all universities increased from 53 to 312, or by 489 percent; 6) between 1997 and 2006, federal research and development expenditures at the research universities increased from $76 to $222 million, or by 192 percent; and 7) between 1997 and 2006, extramural research and development expenditures increased from $105 to $327 million, or by 211 percent.


Dr. Handley discussed the annual philanthropic support from 1997 through 2006 and the private funds leveraged through June 30, 2006. She also discussed the endowment market value, the endowed chairs and professors, federal research and development expenditures, and extramural research and development expenditures from 1997 through 2006. These charts are located in the meeting folder in the LRC library.


Representative Marzian asked if 2004 was the last year that money was put into the "Bucks for Brains" program and why is that. Dr. Handley said it had taken up until last year to complete the matching for the monies that were made available in 2004. She said "Bucks for Brains" professors have expressed concerns over the adequacy of the research space that is available and the legislature funded some research space improvements in the last biennial budget. She said the universities have also addressed the problem of research space by earmarking dollars for new building construction. Representative Marzian said those funds are separate from the "Bucks for Brains" monies because those dollars are not used for facility construction.


Representative Marzian said university presidents still wanted funding for the "Bucks for Brains" program after 2004 because now if the program is funded in 2008, it will take until 2013 to have the funding matched. She asked why there was no funding placed in the program after 2004 when university presidents were asking for funding and had matches for the funding in place.


Senator Shaughnessy said Governor Patton had a vision and pushed very hard for "Bucks for Brains" funding. He said momentum is lost now because the program was designed to be an on-going process and this is unfortunate that funding has not been available in the last couple years. He said it is not fair to blame the issue of not funding the program on the issue of space or not having donors to match the funding. He said Governor Patton gave universities more "Bucks for Brains" money when matches were not found in previous years.


Representative DeCesare asked about the regional universities' role in the "Bucks for Brains" program and the potential for increasing their funding for the program. Dr. Handley said the regional universities received substantially less money for the "Bucks for Brains" program and they had broader guidelines in terms of what they could use the money for, which included scholarships made available in targeted areas where they were able to attract $1 million or $2 million, but also created endowed chairs and endowed professorships. She said regional university presidents have indicated a need for greater flexibility and guidelines with the program and the CPE will be discussing this topic in upcoming meetings.


Representative DeCesare said Eastern Kentucky University, Western Kentucky University, and Murray State University have displayed the most interest and have received the most "Bucks for Brains" money outside of UK and UofL. He asked who determines how the money is divided between UK and UofL.


Mr. Tom Layzell, former President of the CPE, said two-thirds of the money from the Research Challenge Trust Fund goes to UK and one-third to UofL. He said the regional university excellence trust fund has a different method of dividing the funds as it is a FTE based allocation. He said the regional universities have not been identified as research universities and that is why the funds for "Bucks for Brains" are not focused at those universities, but may be considered for the 2008-2010 budget cycle.


Mr. Layzell said money was budgeted for the 2004-2006 budget cycle, but was cut during the legislative session. He said a small request was made again in 2006-2008 to keep the program alive, but $61 million of funds at that time were unmatched, and it did not survive the legislative process either. He said CPE plans to make another request in 2008-2010 to get the program back on track as it has been a very successful program. Representative Marzian would like to see funding for "Bucks for Brains" restored to the same levels as before or increased, in addition to the regional universities receiving a bigger share.


Representative Glenn asked the multiplier effect of research on economic activity. Dr. Handley responded that a 1.7 multiplier was not used, but up to a 4.5 multiplier can be used, which has tremendous implications for UK and UofL with their missions in medical research. She said a conservative figure would be 1.7, which is what economic analysts say is the impact of bringing federal research and development dollars.


Senator Borders said the intent of Governor Patton and the education reform act was to make UK a top 20 research institution and UofL a nationally recognized metropolitan research institution, and that is why the majority of funding went to those two institutions. He said the same mandate was not placed on regional universities throughout the state, nor should they have been. The regional universities and technical and community colleges do a good job, but the flagship universities such as UK and UofL, have to be positioned to be top research universities in the country.                                       


Dr. Handley said the reality is that the amount of funding for the regional universities was smaller and they were able to match those dollars more quickly because it was smaller amount. She said the CPE created the regional stewardship funds to give regional universities other designated funding to assist the universities with their missions. She said the regional stewardship funds have a little over a $4 million and was approved by the legislature and the Governor.


With no further business before the committee, the meeting was adjourned at 11:45 a.m.