Board of Trustees Public Meeting April 25, 2017 0 Statement of - - PowerPoint PPT Presentation

April 25, 2017 Board of Trustees Public Meeting

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Statement of Principles: Tuition and Fees

Introduction

• P.L. 18A:64-1 et seq., the Higher Education Restructuring Act of 1994, gave

significant new responsibilities to Boards of Trustees. Among them are: ⁻ To set tuition and fees; however, prior to the date of the adoption of a tuition or fee schedule or an overall institutional budget, and with reasonable notice thereof, the governing board shall conduct a public hearing at such times and places as will provide those members of the college community who wish to testify with an opportunity to be heard. ⁻ The hearing will be held at The College of New Jersey, and will be open to the general public. ⁻ Mindful of their statutory responsibility, the Trustees offer the following statement to be circulated as part of the notice of the annual hearing and to be read at the beginning of each hearing. February 23, 1995

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Statement of Principles: Tuition and Fees

Principles

• The cost of delivering a quality, cost effective undergraduate education at The College
• f New Jersey is the central issue in establishing tuition and fees. That cost is defined

annually.

• The rationale for use of public funds in support of higher education is that higher

education exists primarily to serve the public good.

• The Trustees have the responsibility to provide vigorous advocacy for state support

and to rigorously review institutional expenditures so that they may certify the cost- effective implementation of the college’s mission in service to the citizens of New Jersey.

• Students are required to share in the cost of higher education because it confers a

personal benefit. However, the Trustees recognize that the public good is not served if the cost of attending The College of New Jersey bars access, and pledge that state and federal financial aid, combined with institutional resources, will be managed to ensure access. February 23, 1995

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Statement of Principles: Tuition and Fees

Conclusion

• Thus, when determining tuition and fees, the Trustees strike a balance between

what students pay, and what the state and federal governments pay. That balance must take into account the finite costs of a quality education and that concomitantly, when, after rigorous internal cost control, state support decreases, tuition must increase if quality is to be preserved.

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CSPP Budget Decision-Making Principles & Process

The budget planning and development will be guided by the following Board of Trustees approved resource allocation principles in order of importance: 1. Preserve the health, safety and security of our students, faculty, staff and visitors. 2. Preserve the integrity and excellence of the educational programs and services through which the College realizes its mission. 3. Preserve the institutional integrity of the College, including our

• bligations to staff, faculty, and students (e.g., scholarships).

In implementing these principles, decisions will also be guided by the institutional strategic priorities, in particular, the need to preserve and enhance the College's long‐term financial well‐being. Updated April 9, 2008

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Governor’s FY2018 Higher Education Proposed Budget

 Governor Christie’s proposed budget includes level funding of $2.2 billion for higher education  The FY2018 budget provides overall funding in direct aid for the state’s senior public institutions of higher education at the same levels as FY2017 ($699.5 million). TCNJ’s base appropriations = $27.18 million.  However, the Senior Publics net fringe benefits funded by the State is projected to increase to $728.7 million, which represents a 5.1% or $35.1 million increase.  Operating aid to county colleges will also continue at the same levels ($134.1 million) as FY2017, but their fringe benefits will increase by $1.9 million or 3.7%.  The budget will provide $1.0 million under the Independent College and University Assistance Act similar to FY2017.

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Governor’s FY2018 Higher Education Proposed Budget

Student Aid Programs  Tuition Aid Grant (TAG) funding will be increased by $15.7 million over FY2017 level, to a total of $419.4 million.  The Educational Opportunity Fund will be reduce by $3.6 million or 8.4%, to a total of $38.8 million in FY2018 according to the Budget Summary Document. High School to College Programs  The Governor’s Urban Scholarship program will add a sixth class and will now support an estimated 600 scholars from targeted school districts.  Funding will continue for the College Readiness Now at $1 million in fiscal 2018 to help students prepare for college level course work before they graduate high school.

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State Appropriations per FTE Student

$6,350 $6,550 $6,750 $6,950 $7,150 $7,350 $7,550 $7,750 $7,950 FY 2013 FY 2014 FY 2015 FY 2016 $7,841 $7,691 $7,754 $7,538

Column1 FY 2013 FY 2014 FY 2015 FY 2016 Base Appropriation 29,317,000 $ 29,317,000 $ 29,317,000 $ 27,177,000 $ Fringe Appropriation 23,994,000 23,762,000 24,530,000 25,262,000 Total State Appropriations 53,311,000 $ 53,079,000 $ 53,847,000 $ 52,439,000 $ Total FTE Enrollment 6,799 6,901 6,944 6,957 State Appropriations per FTE 7,841 $ 7,691 $ 7,754 $ 7,538 $

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State Appropriations and Tuition & Fees

The following graph illustrates state appropriations and tuition & fees as a percentage of the College’s education & general operating budget: *Other includes investment income and TCNJ Foundation support.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% FY 2013 FY 2014 FY2015 FY 2016 FY2017 Budget $29,317 17.4% $29,317 17.0% $29,317 16.6% $27,177 15.3% $27,177 14.3% $23,994 14.2% $23,762 13.8% $24,530 13.9% $25,262 14.2% $32,732 17.3% $109,455 64.8% $112,141 65.1% $115,813 65.5% $118,656 66.7% $122,247 64.5% $6,067 3.6% $7,075 4.1% $7,186 2.5% $6,836 3.8% $7,308 3.9% Base Appropriation Fringe Appropriation Tuition & Fees Other

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Fiscal Year 2018 Key Budget Challenges

Below are some of the key budget challenges that TCNJ will need to address for Fiscal Year 2018:  Implement a comprehensive plan to address the negative enrollment trend in the graduate programs.  Price sensitivity and the potential cap on tuition increase by New Jersey will pose an even greater challenge to TCNJ’s Strategic Plan priority of achieving a Sustainable Financial Model.  The State’s operating support to TCNJ has been flat or declined over the past few years and with its continuing fiscal challenges as evidenced by its bond ratings downgrades, this trend is likely to persist in the coming years.  Significant increase in maintenance operating costs of $1.5M due to the new STEM building and Brower Student Center renovation.  The need to allocate additional resources of $1M to implement the College’s Strategic Plan.  Additional project requests of approximately $4.3M for IT and Facilities remain unfunded.  Limited funding available ($0.47M) to support requests totaling $0.76M for academic and Fitness Center equipment.  Growth by Substitution: Develop a comprehensive plan to reallocate budgets to institutional priorities that will strengthen the College’s overall revenue base over time.

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Budget Planning Strategies

• 1. Implement a comprehensive plan for departments to grow enrollment in targeted

graduate and undergraduate programs.

• 2. Address the continued demand for additional investment in information technology,

facilities and academic equipment.

• 3. Allocate additional funding to address the significant increase in facilities operating

costs due to the new STEM building and BSC renovation.

• 4. Identify sustainable revenue enhancements and cost-containment initiatives.
• 5. Budget tuition and fee revenues at 99.5% of the projected total to provide budgetary

flexibility in case the enrollment goals are not achieved.

• 6. Develop contingency plans for the potential cap on tuition and fees increase (2% or

the change in Consumer Price Index (CPI), whichever is less based on the State of New Jersey Assembly Bill No. 4680, that was introduced on March 16, 2017. Note: As of June 2016, the change in CPI was 1.0% for the New York-Northern New Jersey as reported by the Bureau of Labor Statistics, U.S. Department of Labor.

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Linkage to the College’s Strategic Plan – Priority V

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Budget Planning Assumptions

The following assumptions are set forth to guide TCNJ’s multi-year budget planning and development processes. The fall 2017 enrollment goal of 7,082, includes 1,490 freshmen, 240 transfers and 50 provisional students. Note: As of 6/30/2016, the Consumer Price Index (CPI) was 1.0%.

Growth Assumptions

FY2018 Scenario A FY2018 Scenario B FY2018 Scenario C FY2019 Projection FY2020 Projection FY2021 Projection

Operating Budget

Operating Revenues 2.00% 2.00% 2.00% 2.25% 2.50% 2.50% Student tuition and fees - tuition increase 1.00% 2.00% 2.50% 2.00% 2.00% 2.00% Student tuition and fees - % change in enrollment mix 0.60% 0.60% 0.60% 1.62% 1.92% 1.97% Net student revenue - change in enrollment mix 737 $ 737 $ 737 $ 1,365 $ 1,700 $ 1,813 $ Tuition discount - institutional scholarships & waivers 12.3% 12.2% 12.1% 12.0% 11.9% 11.8% Student housing @ 96% capacity - Room & Board 3.00% 3.00% 3.00% 3.00% 3.00% 3.50% Federal grants indirect cost recovery 1.50% 1.50% 1.50% 1.50% 1.50% 3.00% Other Sources 1.50% 1.50% 1.50% 1.50% 1.50% 2.50% Other Operating Expenses 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% Salaries & Fringe Benefits (plus new positions) 2.15% 2.15% 2.15% 2.15% 2.15% 2.15% Debt Service Savings - bond refunding ($ in 000's) (5,345) $ (5,345) $ (5,345) $ (4,070) $ (4,067) $ (4,045) $ Maintenance cost increase - STEM & BSC ($ in 000's) 1,484 $ 1,484 $ 1,484 $ 436 $

• $
• $

Nonoperating Revenues 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% State of New Jersey appropriations 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% State of New Jersey fringe appropriation 5.00% 5.00% 5.00% 0.00% 0.00% 0.00% Investment Income 9.50% 9.50% 9.50% 10.50% 12.50% 12.50% Capital Contribution ($ in 000's)

• $
• $
• $
• $
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Contract Food Service 3.50% 3.50% 3.50% 3.50% 3.50% 3.50%

Enrollment Projections*

Undergraduate Headcount 6,593 6,593 6,593 6,653 6,689 6,720 Graduate Headcount 489 489 489 545 598 637 Total Headcount 7,082 7,082 7,082 7,198 7,287 7,357 * Exclude non-traditional & summer programs - no growth projected

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Multi-Year Financial Planning Assumptions

FINANCIAL MODELING ASSUMPTIONS

Assumptions ($ in thousands) Projected Revenue 241,882 $ 243,074 $ 243,734 $ 249,618 $ Strategic Plan Funding Allocation (Base + One-time) (5,388) (5,388) (5,388) (5,388) Projected All Other Expenses (237,409) (237,409) (237,409) (242,865) Previous Year Projected Budget Surplus (Deficit) (915) $ 277 $ 937 $ 1,365 $ Budget Planning Assumptions: Operating Revenues Net student tuition and fees (plus enrollment growth) 1.00% 1,950 2.00% 3,166 2.50% 3,774 2.00% 4,518 Net student housing & fees (board plan + room rate increase) 3.00% 1,408 3.00% 1,408 3.00% 1,408 3.00% 1,450 Other sources 1.50% 365 1.50% 365 1.50% 365 1.50% 418 Operating Expenses New faculty and staff (Salary & Fringe) (752) (752) (752)

• Salary Program Funding

(2,156) (2,156) (2,156) (2,264) Projected increase in fringe benefits (1,807) (1,807) (1,807)

• Non-salary cost increase (STEM & BSC)

(1,107) (1,107) (1,107) (436) Institutional Scholarships & Waivers 248 224 275 (68) Increase in all other expense categories (2,311) (2,311) (2,311) (2,957) Nonoperating Revenues State of New Jersey appropriations (operating and fringe) 0.00%

• 0.00%
• 0.00%
• 0.00%
• State of New Jersey fringe appropriation

5.00% 1,637 5.00% 1,637 5.00% 1,637 0.00%

• Additional Investment Earnings

371 371 371 449 Net Transfers to Capital & Strategic Reserves 1,239 1,239 1,239 254 Projected Budget Surplus (Deficit) (915) $ 277 $ 937 $ 1,365 $ Surplus (deficit) as a percent of the total base expenditure plan

• 0.41%

0.12% 0.38% 0.60% * Annual increase in Consumer Price Index (CPI) as of 6/30/16 was 1.0%. FY2018 Scenario A* FY2019 Projection FY2018 Scenario B FY2018 Scenario C

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Strategic Plan Allocation – Fiscal Year 2018

FY2018 Strategic Funding Requests Recurring One-Time Total Priority I: Attract and retain talented students, faculty, and staff 400,000 $ 150,000 $ 550,000 $ Priority II: Enhance Signature Experiences 1,023,618 200,000 1,223,618 Priority III: Promote the College's distinctive identity 330,000 100,000 430,000 Priority IV: Physical and technological infrastructure 981,231 750,000 1,731,231 Priority V: Achieve a sustainable financial model 50,000 300,000 350,000 Total Strategic Investment Allocations 2,784,849 $ 1,500,000 $ 4,284,849 $ FY2018 Base Allocation + Strategic Reserve Funding 2,784,849 2,500,000 5,284,849 $ Balance to be Allocated

• $

1,000,000 $ 1,000,000 $ Amount

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Tuition, Room & Board Pricing

* In FY2016, the net state appropriation was reduced by $2.1 million, or 7.3%, to offset state- funded fringe benefits.

For every 1% increase in Student Charges* Undergraduate Tuition & Fees (In State) 158 $ Undergraduate Tuition & Fees (Out of State) 270 $ Room & Board 129 $ Amount per student

Mandatory Charges (Academic Year) FY 2013 FY 2014 FY 2015 FY 2016* FY 2017 Undergraduate Tuition & Fees (In State) 14,359 $ 14,709 $ 15,004 $ 15,446 $ 15,814 $ Undergraduate Tuition & Fees (Out of State) 24,510 $ 25,115 $ 25,617 $ 26,378 $ 26,991 $ Room & Board (Ala Carte 1 board plan) 10,998 $ 11,350 $ 12,226 $ 12,570 $ 12,881 $ Annual Tuition Increase 3.50% 2.50% 2.00% 3.00% 2.25% Annual Fees, Room & Board Increase 3.20% 2.90% 2.30% 2.80% 2.41% Overall Annual Increase 3.80% 2.30% 2.10% 2.90% 2.35%

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Strategies to Achieve Budget Equilibrium

Financial Flexibility 1. Hold vacant positions (faculty and staff) based on institutional priorities 2. Examine department budgets to reallocate resources to fund institutional strategic priorities (Growth by Substitution) 3. Reduced the budget for departments non-salary operating allocations based on multi-year trend analysis Revenue Enhancements & Cost Containment 1. Grow net tuition through enrollment and/or reduction in scholarships & waivers based on historical trends. 2. Engage the campus community to develop sustainable cost containment and revenue enhancement/incentive programs. 3. Strategically enhanced Summer School offerings to attract more students 4. Link new position (salary + fringe) to marginal revenue increase or expenditure reallocations identified by the requesting departments

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Communication

On Campus Communication

• Committee on Strategic Planning and Priorities
• Faculty Senate
• Staff Senate
• Student Government
• Union Leadership
• Deans Council

Presidential and Staff Meetings with Legislature

• Individual Meetings
• Assembly and Senate Hearings
• Participation with New Jersey Presidents Council

Advocacy Networks

• TCNJ Specific Advocacy through Website (SGA, Parent Listserv, Alumni Networks

and Other Constituency Groups)

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Questions?