Finance, Revenue and Bonding Committee Public Hearing ...

Finance, Revenue and Bonding Committee

Public Hearing

Testimony

By

Tom Katsouleas

President

April 20, 2021

Chairs, Ranking Members and members of the Committee, my name is Tom Katsouleas and I am

President of the University of Connecticut. Thank you for giving me the opportunity to support SB 1099,

An Act Authorizing Bonds Of The State For A Research Faculty Recruitment And Hiring Program By The

University Of Connecticut To Encourage The Creation Of New Business Ventures, which would expand

UConn¡¯s role in the creation of new companies in the state. The bill will provide us with the necessary

resources to hire 10 new faculty who will turn their research discoveries into new technologies,

products and companies. Today, I will focus on why these new faculty hires are critical and then hand it

over to our Provost, Carl Lejuez, to outline the specifics of our faculty hiring plan.

State investments have been instrumental in the dramatic growth of UConn and are largely responsible

for UConn¡¯s meteoric rise to its place among the top 25 public universities in the nation as evidenced by

the U.S. News & World Report rankings.

UConn is a very attractive option for students interested in obtaining a four year college degree. Today

UConn offers a broad range of academic choices, and students learn from outstanding faculty who are

widely recognized for their cutting-edge research and expertise. More than 38,000 students applied to

UConn last year for 6,000 spots and the University welcomed its most diverse freshman class ever,

including 175 valedictorians and salutatorians. The University is proud that nearly 73% of our in-state

graduates and 22% of our out-of-state students stay in Connecticut after graduation, where they go on

to live, work and contribute to their local communities. In fact, 149,000 UConn alumni are currently

working in Connecticut.

UConn is currently home to 51 new startups and 132 companies have been part of our Technology

Incubation Program (TIP) since 2003. Last year our start-ups raised over $463 million in private equity

and created 208 jobs last year. In 2020, our faculty also filed 102 invention disclosures and were issued

25 patents. Our incredible successes are a direct result of a series of landmark state infrastructure

investments including UConn 2000, 21st Century UConn, Bioscience Connecticut, and Next Generation

Connecticut.

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While UConn has made extraordinary progress, the University is committed to doing even more to

expand and grow Connecticut¡¯s economy through research, discovery, and innovation. With your

support we can do more.

We believe the path to a more robust UConn and a brighter economic future for our state can be found

by looking at the connectivity between industry and research and development in the major regional

economies of Boston, North Carolina Research Triangle, and San Francisco Bay Area. These regional

economies thrive due to the presence of public and private research universities that have developed

human capital for an increasingly modern workforce and sparked innovation through research for

decades. The remarkably simple formula is FACULTY + RESEARCH = JOBS, one that we need to expand

greatly here in Connecticut for long-term, sustained economic growth. The good news is we have strong

evidence this formula works.

If you look at the below chart, you will see that some of the top regional economies in the US are also

home to some of the top research institutions. The National Science Foundation¡¯s (NSF)¡¯s Higher

Education Research and Development (HERD) Survey data that tracks research spending by universities

reveals that these regional economies benefited from $2.5 to $3.2 billion in research activity in 2018 by

the major institutions listed. By comparison, our regional corridor from New Haven, CT to Amherst, MA

with three major research universities only produced $1.5 billion in research activity in 2018.

Table 1. NSF HERD data on research expenditures (in millions)

Institution (Regional Economy)

2016

2017

2018

881,765

265,522

214,576

951,084

267,647

210,416

990,399

269,685

211,140

$1,077,253

$1,123,160

$1,173,371

$946,159

$395,921

$952,017

$421,360

$964,336

$484,205

$1,055,778

$1,126,924

$1,167,611

$1,045,338

$1,102,063

$1,136,158

$489,918

$500,445

$509,841

California-San Francisco

$1,294,261

$1,409,398

$1,595,732

California-Berkeley

Stanford

$774,255

$1,066,269

$770,822

$1,109,708

$796,505

$1,157,597

New Haven-Hartford-Springfield-Amherst

Yale

UConn

Massachusetts-Amherst

Boston

Harvard

Massachusetts Institute of Technology

Boston University

Raleigh-Durham-Chapel-Hill

Duke

North Carolina-Chapel Hill

North Carolina State

San Francisco-Oakland-San Jose

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Currently, UConn¡¯s $286 million in research expenditures in FY20 is estimated to have provided over

$485 million of total economic impact. For every research dollar that UConn attracts in externally

sponsored research and spends within the state, 80 cents in economic output is generated elsewhere in

the state economy. As research spending grows, the impact of that spending will grow as well.

The second graphic in my testimony is a screen-shot of UConn¡¯s Grant Trails website

(granttrails.uconn.edu/CT) that interactively shows where UConn research grant spending creates

economic impact in our state.

Figure 1. UConn¡¯s Grant Trails interactively shows you where research grants that are awarded to UConn faculty are spent in CT

The more research faculty a university has, the more research it can conduct with sponsored funding.

More sponsored research leads to more new discoveries, new technologies, and growth in Connecticut¡¯s

economy.

National benchmarking reveals that UConn¡¯s current faculty is research productive, but our faculty

numbers are substantially smaller compared to our peers, so a focused faculty hiring plan is essential. In

fact, National Science Foundation (NSF) data indicate that the smallest top 20 research institutions

average just 293 more faculty than UConn and are able to generate $515 million more on average in

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federal research funding. This is why SBXXX is so critical to UConn¡¯s and Connecticut¡¯s future.

Increasing faculty, particularly entrepreneurial faculty, will allow us to create even more startups and

new business ventures.

We thank the Committee for raising this bill and for its long-standing support of the University. We look

forward to making the hiring plan a reality.

Please know that UConn also supports SB 1094, An Act Authorizing Bonds Of The State For CTNext And

the Innovation Place Program. This bill provides resources to CTNEXT for the Innovation Place program

and grants to higher education geared at building a state-wide entrepreneurial ecosystem. UConn has

been participating in the Hartford, Stamford and Groton IP grants and has received $2.3 million in higher

education grants that have been used to support our faculty and student entrepreneurs.

I am happy to answer any questions now or after our Provost gives you more specifics about the plan ¨C

whichever way makes more sense for the Committee.

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Office of the President

Thomas C. Katsouleas

President

To:

Members of the Higher Education & Employment Advancement Committee

Members of the Finance, Revenue & Bonding Committee

From:

Thomas Katsouleas

President

Date:

March 31, 2020

Subject:

PA 19-154 - Faculty Hiring Plan Report

Pursuant to Public Act 19-154, I am forwarding a copy of the University¡¯s Faculty Hiring Plan which was

approved by UConn¡¯s Board of Trustees on February 26, 2020. As you may be aware, PA 19-154

required the University to create a blueprint for hiring faculty interested in research that meets societal

needs or the commercialization of discoveries, innovations or technologies with the ultimate goal of

generating long-term economic growth for our state.

It is important to note that the attached plan was developed prior to the onset of the COVID-19

pandemic and the resulting financial challenges. The University is now facing unprecedented

revenue losses and emergency expenditures that threaten its core financial stability. While we had

hoped to begin working on implementing this plan in FY21, our ability to do so in the midst of this

current budgetary situation may be limited. However, hiring excellent research faculty and

doubling research in the next decade continue to be my top priorities and UConn will move

forward as best it can in targeted ways to get started.

While the full scope of the financial impact due to COVID-19 is still evolving, we are estimating current

revenue losses for FY20 totaling $135.2 million at UConn and UConn Health and expect these losses may

increase. Estimates for FY21 currently exceed $140 million and may grow further. For the Storrs and

Regional Campuses, FY20 & FY21 costs include lost revenue from refunds of room and board fees at our

Storrs and Stamford campuses ($29 million) and other revenue losses. Additionally, if the COVID-19

crisis extends into the fall as most models predict, we are anticipating a significant international student

enrollment loss due to restricted travel that could total $70 million.

For UConn Health, we have redeployed clinical resources to COVID-19 emergency response. Since the

first two weeks of this crisis, we have spent almost $1 million on equipment and supplies, and had a $15

million loss in clinical revenues. We anticipate a total impact of about $103 million in FY20, and another

$72 million through December 30 th. The total impact to the institution will only grow as we incur

additional costs to fight the pandemic and continue to forego elective surgeries and other non-critical

medical care. Since the institution already faces a $52.3 million funding gap for FY21, due to the state¡¯s

unfunded legacy costs charged to it, UConn Health¡¯s financial situation is even more precarious. With

these costs unaddressed, the institution would go cash negative in August 2020.

As always, thank you for your continued support of the University of Connecticut.

352 MANSFIELD ROAD, UNIT 1048

STORRS, CT 06269-1048

PHONE 860.486.2337

FAX 860.486.2627

uconn.edu

An Equal Opportunity Employer

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