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      "Angie Martin took us through a fairly thorough financial presentation on the
budget target that we have, and as a result of the tuition setting guidelines that we are
going to impose we have that presentation available for you if you didn't get it. I know
that some of the press attended some of the meetings last week. I won't be going through
the full documentation of that, but I will give you some slides and highlights of where we
are.

      "Before I do that I'd like to just make some general comments. We are asking
you to do something today that we'd rather not be asking you to do. And that is to have
another double digit tuition increase. I've had an opportunity to speak at several
legislative gatherings in Frankfort in the last month or so, and I felt compelled one day to
tell the Appropriations and Revenue Committee - 'we don't wake up every morning
wanting to raise tuition. That's not what we are here to do. We are here to provide a
quality education at as affordable rate as we possibly can and we work at that every day.'

      "However, the position we find ourselves in right now is that we have a
responsibility to our students to continue to maintain and enhance a quality educational
experience. We have a responsibility to our state to continue to focus on the lofty
expectation that was spelled out in House Bill 1. We have a responsibility to our faculty
and staff to provide them competitive salary and benefits and the resources that they need
to feel good about the professional task that we ask them to perform. I've said many
times that if Kentucky is to have a strong economy, it must have a strong system of
higher education. Especially in these days, it needs a very strong flagship university that
stands high for the things that have to be done to be competitive.

      "If you don't believe that higher education is important to an economy, you need
to look no further than California, Massachusetts, and North Carolina. Those are the
states that have had a vibrant economy. Even though California hit a dotcom pothole,
they will come back because they have the intellectual firepower to compete with
anybody in the world. However, before there was a Silicon Valley there was a Stanford
and a Berkeley. Before there was a Beltway around Boston that leads the bio-tech world,
there was an MIT and a Harvard, and before there was a Research Triangle Park there
were three great universities. This is no chicken-and-egg situation. In today's world,
higher education is the foundation upon which you build your economy, and we do not
need to let that slip.

      "If you look at the latest Milliken Report about venture investments, about the
kind of things that you need to do to generate a wholesome economy with development
engineers with Ph.D.s, Kentucky was 48th, only above Mississippi and Arkansas.
California and Massachusetts were number 2 and number 1. Massachusetts was 1
because they've got MIT. Personal commentary.'

      "Those are the kind of things, though, if you read that Milliken Report, that we
have to do. Some of that is being done, some of that data was about 2 years old, and I
think that with the New Economy Legislation, with some of the innovations that we are