The Regions

States Capitalize on the Energy Boom to Expand Training and Research

By INGRID NORTON

When Larry Swanson arrived at the University of Montana in 1988, he thought he had made a mistake. The state had recently gone through the oil and gas bust and was knee-deep in a farming and ranching crisis. Education budgets had been slashed. Mr. Swanson, a newly hired economist, walked past poorly maintained buildings and cracked sidewalks. He wondered if he had been right to leave the University of Nebraska for the Rocky Mountains.

The memory is a far cry from how the Montana campus looks today. Now, as he walks from the O'Connor Center for the Rocky Mountain West, where he is director, Mr. Swanson passes the 59,000-square-foot addition to the pharmacy school and the construction site for a new law-school building.

To Mr. Swanson, the contrast is indicative of a larger regional change. For much of his tenure at the university, he says, state businesses and legislators viewed higher education as a cost to be minimized. Now they increasingly see it as an investment, essential to the region's economic future. In 2007 the Legislature increased spending on higher education by 14 percent for the 2007-9 biennium. "It's almost a 180-degree shift," he says.

Throughout the eight states of the Mountain West, college officials have reported receiving greater attention and more money from their lawmakers. State officials, higher-education leaders in the region say, have begun to put more emphasis on bolstering the work-force development role of community colleges and research efforts at universities.

Even states that cut back on appropriations for higher education this year trimmed less than they had during past economic downturns. Cash-strapped Nevada was an exception, as the state's governor recently asked for a 14-percent cut in higher-education spending for the 2009 fiscal year.

David A. Longanecker, president of the Western Interstate Commission for Higher Education, says that the key to the future of higher education in the region will be balancing the business community's thirst for research with the demands of educating a strong base of future workers.

"Right now we don't have enough capacity to prepare regular folks for the work force of the future," he said. "The principal need is just going to be human-resource development."

On that count, he said, there is still a long way for the West to go to make up for years of fiscal neglect of higher education even as states begin to treat college budgets more favorably.

High-Paying Jobs

The area the U.S. Census designates as the Mountain West is a diverse region, encompassing the remote, snow-capped peaks of the Teton Range in Wyoming and arid, sprawling cities like Phoenix and Las Vegas. The region's colleges, likewise, face different pressures. In Wyoming the number of high-school graduates is projected to shrink by 10 percent over the next six years, prompting state officials to devise policies to entice more people to stay in state for college. Arizona and Nevada, meanwhile, are two of the fastest-growing states in the nation, with Arizona's population expected to grow by 85.8 percent and Nevada's by 93.3 percent by 2025. Lawmakers in both states are working to allocate money to colleges to allow them to construct facilities to accommodate the growth.

Public higher education dominates the region, and community colleges play an especially prominent role in many of the states. Most states have more community-college attendees in relation to their populations than other regions do. After California, the states with the greatest shares of their populations enrolled in community colleges are Wyoming, Arizona, and New Mexico, according to the State University of New York's Rockefeller Institute of Government.

The Mountain West, as a whole, is also experiencing tremendous economic growth and doing better on many financial measures than the rest of the country. Most states in the region enjoyed lower unemployment rates than other regions, such as the Pacific West and the Midwest, according to the Bureau of Labor Statistics. The two states that are exceptions to the general trend are Nevada and Arizona. In Nevada the housing crisis and the state's heavy reliance on gaming revenue have caused the formerly booming economy to take a sharp downturn over the past year. In Arizona the housing crisis has also hit hard, leading many families to lose home-equity lines of credit or to face foreclosure.

Most of the other Mountain West states, though, retain relatively robust economies, despite the nationwide economic downturn. In "America's Top States for Business," a CNBC poll released in July that ranked states on factors including tax burden, business-friendliness, and quality of life, five of the top 15 states were in the Mountain West: Utah, Idaho, Colorado, Arizona, and Wyoming.

Most of the Mountain West states also share a tradition of fiscal conservatism, which has often extended to decisions about financing higher education. That is beginning to change.

"People see the connection between higher education and higher-paying jobs," says Alan Stephens, president of Western Progress, a policy institute with locations in Arizona, Colorado, and Montana. States, he says, are now aggressively pouring resources into colleges and universities that could form the bedrock of the region's new industrial centers.

In Colorado the budget for the 2009 fiscal year includes a 9-percent spending increase for higher education, and the governor was expected to propose a severance tax on oil and gas later in the year to pay for scholarships that would nearly double the amount of financial aid available to Colorado students.

Wyoming, which is in the midst of an energy boom, continued its recent trend of using the state's riches to bolster higher-education priorities. For the next two years, legislators appropriated $244-million for community colleges, a 28-percent increase, $79.8-million for construction at colleges, a 10-percent increase, and $455-million, a 9-percent increase, for the University of Wyoming, the state's only four-year university.

And even though Arizona's institutions received budget cuts, the state's universities are also set to benefit from new funds for construction and maintenance. As state officials worked to plug an estimated $1.2-billion hole in the budget, they cut $5.5-million from community colleges' operating budgets and $20-million in capital funds, a total loss of 15.3 percent. The state's universities were set to lose a total of $50-million, a 4.6-percent reduction. But at the same time, Gov. Janet Napolitano, a Democrat, pressed a $1-billion bond package to finance construction and maintenance of buildings at state universities, which will be financed by the state lottery.

Mr. Swanson, of the University of Montana, says that the region still retains its fiscal conservatism; its form is simply manifesting itself differently. When states put money into higher education, he says, they expect economic results in return, demanding a better-educated work force that can fill jobs in key industries and university research that helps create new business. "It's not a blank check," he says.

The Colorado Paradox

For years, legislators and higher-education officials in Colorado have spoken of "the Colorado Paradox." More than one-third of the state's residents have earned at least a bachelor's degree, ranking the state third in the nation on that measure. The state's strong performance on that front is fueled by people moving from out of state to cities like Boulder and Denver, where many people are retiring and information-technology jobs are plentiful. At the same time, Colorado ranks in the bottom half of the nation at graduating its own residents from college.

The discordance has begun to dominate policy discussions in the state as baby boomers start to retire, says Matt Gianneschi, Gov. Bill Ritter Jr.'s education-policy adviser. The fact that the state needs to better educate more of its residents to be able to maintain key industries is no longer up for debate, Mr. Gianneschi says: "It's more an issue of, how do we respond to it?"

He says that the governor's creation of a P-20 council last year, similar to Arizona's, which studies ways to help more people successfully negotiate transitions among all levels of education, from preschool through graduate school, is an important part of that response.

Elsewhere in the Mountain West, the contrast between the education levels of the work force and the state's own youth is less dramatic than in Colorado because few states import as many college-educated residents. But "the Colorado Paradox" is indicative of a problem that affects the whole region.

"These states are behind the curve," says Dennis Jones, president of the National Center for Higher Education Management Systems, a national higher-education consultancy, pointing to the fact that most of the states lag national averages on college-going and completion rates.

And like Colorado, many states in the Mountain West are grappling with how to educate enough workers to meet the needs of the region's burgeoning high-technology economy and other key industries.

In New Mexico, Gov. Bill Richardson has started a program that uses state bonds to finance public-college programs considered vital to the state economy, such as degree programs in sustainability and digital media.

Finding ways to better use community colleges to prepare more people for the work force is an essential part of the conversation in many states. The University of Montana system expanded the responsibilities of its two-year-colleges commissioner and asked her to develop a strategic plan to make the state's two-year institutions function more cohesively and help them find new ways to appeal to Montana students, who often bypass college because they are lured by high-paying jobs in energy production straight out of high school.

Two-year and four-year institutions in many states, including Idaho and New Mexico, have been working to smooth articulation agreements among their campuses to help the growing number of students who begin their higher education at two-year institutions transition to four-year colleges.

However, plans for two-year institutions to take on more students were interrupted by budget limits in at least one state. Michael D. Richards, president of the College of Southern Nevada, a two-year college that is the largest higher-education institution in the state and located in a fast-growing region, had begun planning a year ago to hire more full-time faculty members, open a new campus in the underserved valley north of Las Vegas, and add more classrooms to the college's main campus.

But when the state economy began to decline, Mr. Richards had to reverse course. He is now preparing to shut down six learning centers by the end of 2009 and to turn away up to 8,000 students over the next three years, reducing the current enrollment of approximately 40,000. He has already eliminated 20 administrative jobs and 59 faculty and staff positions and plans to eliminate more over the next academic year.

Research From Boise to Boulder

Meanwhile, partnerships between universities and businesses in the Mountain West are becoming increasingly common, as state economies pivot to research-intensive fields like biotechnology and renewable energy.

For example, the Utah Science Technology and Research program, which was created in 2006 to help connect businesses with relevant university research and bolster science and technology programs at state colleges, has helped the state develop new economic strengths in fields such as energy and life sciences. Through the program, which receives $15-million per year from the state, researchers at the University of Utah have spun off 24 new businesses, including companies specializing in gene testing for certain cancers and in secure wireless communications.

Over the past three years, Boise State University has created doctoral programs in geosciences, electrical engineering, and computer science, in part to help meet the needs of businesses in its backyard, including large branches of the Hewlett-Packard Company and of Micron Technology, a semiconductor manufacturer, according to Robert W. Kustra, the university president.

Boise State also plans to take advantage of its location to open other new areas of research. For instance, next spring it is opening a university institute to study urbanization in the Mountain States. The university also received a $500,000 grant last year from the U.S. Department of Energy for wind-energy research, a field popular at institutions across the region.

Mr. Kustra says that the Mountain West is "uniquely suitable" for studying problems of energy conservation and the pressures of population growth. The region has immense natural resources, but given the wide-open nature of its geography and its recent, sprawling urban growth, it is also more dependent on cars than many other parts of the country. The growth has also exacerbated water shortages that states like Arizona and Nevada are grappling with, due to droughts along the Colorado River.

When it comes to the nation's environmental future, the West "is the canary in the coal mine," he says.

Patricia N. Limerick agrees. While in the past, Western universities were not always included in the regional economic discourse by lawmakers and business leaders, Ms. Limerick, director of the Center of the American West at the University of Colorado at Boulder, says the continuing energy crisis is spurring new collaborations. The crisis, she says, is adding urgency to the state's growing desire to bring the region's business leaders and professors together.

In July, Ms. Limerick went to a Colorado Oil & Gas Association conference. As she watched faculty members from her Boulder campus and the Colorado School of Mines sit beside oil-company executives, all listening to the Texas oil billionaire T. Boone Pickens's admonishments about energy dependence, she says, it felt like an unlikely couple were falling in love.