Advanced manufacturing funding included in Purdue's budget request

September 29, 2006

Advanced manufacturing funding included in Purdue's budget request

HAMMOND, Ind. — The Purdue board of trustees, in its meeting Friday (Sept. 29) at Purdue Calumet, approved the university's 2007-09 biennium legislative request for operating appropriations, which includes funds for projects to spur economic development.

The university's New Manufacturing Economy initiative seeks $5 million in fiscal year 2008 to help position the state in the advanced manufacturing economy of the future through the discovery of new technology, rapid deployment of new products into the marketplace and work force education.

"Funds for competitive faculty salaries and support for growth in research initiatives remain our top priorities," said President Martin C. Jischke. "However, Purdue is committed to playing a leading role as an economic development partner and business incubator for the state. Funding for Indiana's New Manufacturing Economy would help us harness the talents of our faculty in service to the state's economic development.

"Manufacturing will continue to be one of the pillars of Indiana's economy, but we must create and apply new technologies in order to make manufacturing processes as efficient as possible. Purdue's advanced manufacturing initiative is focused on making our state more competitive, building the economy and creating jobs for Hoosiers."

State support for the initiative would help fund the growth of these components of the New Manufacturing Economy plan:

• Manufacturing liquid fuels for energy independence by processing cellulose and other plant-based raw materials, as well as development of coal-to-fuel processes.

• Conducting pharmaceutical product research.

• Discovering technologies and techniques to enhance the competitiveness of Indiana manufacturers.

• Researching new products, processes and market development for value-added agricultural enterprises.

• Working to develop a state transportation, distribution and logistics sector that is more efficient and more secure.

• Utilizing Purdue statewide campuses as strategic partners. All campuses would be involved in each element of the initiative, while emphasizing priorities unique to the regions they occupy.

A second initiative in the biennial budget request seeks $1.2 million in new funding for Purdue's Technical Assistance Program, known as TAP. The program connects Indiana businesses, local governments and health-care organizations with Purdue resources. TAP's current state appropriation of $1.1 million has remained essentially unchanged since 1996, said Morgan R. Olsen, executive vice president and treasurer.

Since its founding in 1986, TAP is credited with creating or saving 4,400 jobs, along with adding $340 million in increased sales, $71 million in new capital investments and $32 million in cost reductions.

In 2005-06, more than 500 manufacturers, hospitals, high-tech firms, startups and not-for-profits were served by TAP.

Three percent increases for student aid, salary and benefits, and supplies and expenses for the Purdue system are included in the request. The increase is based on projected rates of inflation and reflects the importance of providing faculty and staff with competitive salaries and benefits, Olsen said.

"The goals of this legislative request are to maintain the quality of a Purdue education, to stay the course with our strategic plans and to continue offering top educational opportunities for our students while, at the same time, holding the line on costs," Jischke said.

Purdue resident undergraduate tuition and fees rank eighth this year among Big Ten public institutions, excluding Northwestern. Non-resident undergraduate tuition and fees rank fifth among Big Ten public institutions.

The West Lafayette campus is requesting a total of about $10.5 million to support research for 2007-08, funds that cover a variety of expenses associated with research, such as cost sharing in order to secure grants from external sources, laboratory upgrades and support for shared-use facilities.

"Research support funding is intended to enhance the university's ability to compete globally for sponsored program contracts with granting agencies and industry partners," Olsen said. "This, in turn, brings jobs and economic development to our state."

For the West Lafayette campus, $1.2 million is sought in fiscal year 2008 and $396,000 in fiscal year 2009 for utility costs and operating expenses - referred to as plant expansion - for new facilities. These include Neil Armstrong Hall of Engineering, Gerald D. and Edna E. Mann Hall, Discovery Learning Center, Beck Agricultural Center, and other infrastructure and utilities improvements. The amounts are apportioned based on the buildings' date of occupancy. Much of the funding for these new facilities was provided by gift funds and other non-state appropriation funding sources. Additionally, $536,000 is being requested in fiscal year 2008 for utilities and operation and maintenance expenses for the music building at Indiana University-Purdue University Fort Wayne.

Other Purdue campuses are scheduled to receive state funding increases for enrollment growth, based on $3,500 for each additional full-time-equivalent student. Based on this formula, the Calumet campus would receive $304,500, Indiana University-Purdue University Fort Wayne's increase would be $28,000, and Purdue North Central's increase would be $318,500. The West Lafayette campus is considered a "mature" campus in terms of enrollment and doesn't receive additional funds for increased enrollment.

The request also seeks increased support for repair and rehabilitation of facilities and infrastructure. Deferred maintenance projects totaling $120 million at West Lafayette will be addressed in the next several years, partly through issuing as much as $60 million in bonds to fund the work. Purdue will fund the debt service on the bonds under its new repair and rehabilitation strategy and seeks $30 million in new state funding in the next biennium to match proceeds from the bond issue.

"Purdue and the state of Indiana enjoy a national reputation for responsible stewardship of our physical facilities, but that hard-won reputation is at risk," Olsen said. "We are asking the state to join with us to solve this problem now."

The request also seeks $400,000 in fiscal year 2008 and $500,000 for fiscal year 2009 for the seven College of Technology Statewide campuses throughout Indiana. The increases will fund new academic degree programs to be instituted in fiscal years 2008 and 2009.

The total budget for Purdue's four campuses and seven College of Technology Statewide locations for 2006-07 is $1.73 billion. State general operating budget appropriations total $314 million, or 18 percent of the total Purdue budget. Student fees account for $515 million, or 30 percent. Other funds come from federal grants, gifts from alumni and corporations, student aid, auxiliary enterprises, indirect cost reimbursement payments on sponsored research, and earnings on the university's endowment.

Requested increases in the Purdue systemwide operating appropriation are 8.6 percent in fiscal year 2008 and 3.2 percent in fiscal year 2009.

The Purdue budget request had been submitted to the Indiana Commission for Higher Education, contingent on approval by the board of trustees. The commission will forward Purdue's and other state university requests to the General Assembly for consideration in its 2007 session.

Writer: Jay Cooperider, (765) 494-2077, jcoop@purdue.edu

Sources: Martin C. Jischke, (765) 494-9708

Morgan R. Olsen, (765) 494-9705

James David, (765)494-7124, jkdavid@purdue.edu

Purdue News Service: (765) 494-2096; purduenews@purdue.edu

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