Financial Analysis and Collective Action for HBCUs and Higher - - PowerPoint PPT Presentation

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Financial Analysis and Collective Action for HBCUs and Higher - - PowerPoint PPT Presentation

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Financial Analysis and Collective Action for HBCUs and Higher Education Institutions in Georgia Howard Bunsis Professor of Accounting, Eastern Michigan University Chair, AAUP Collective Bargaining Congress October 2016 1 Roadmap How

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SLIDE 1

Financial Analysis and Collective Action for HBCU’s and Higher Education Institutions in Georgia

Howard Bunsis Professor of Accounting, Eastern Michigan University Chair, AAUP Collective Bargaining Congress October 2016

1

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SLIDE 2

Roadmap

  • How is the State doing financially?
  • Can we judge whether Georgia supports public higher

education?

  • What Data should you ask for and acquire to become better

informed about financial matters at your institution?

  • Examining State HBCUs, Compared to Other Institutions in GA
  • Financial Situation
  • Where the money comes from
  • How is the money spent?
  • Importance of HBCU’s
  • How Can We Act Collectively to make our institutions, state, and

country better?

2

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SLIDE 3

3

The State of Georgia

How is the state doing financially?

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SLIDE 4

State General Fund Tax Revenues, 2007 to 2017, in Billions Source: Georgia Department of Revenue

4

5 10 15 20 25 Other Taxes/Fees Vehicle Tax/Fees Corporate Tax Sales Individual Income

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SLIDE 5

Annual Percentage Changes in Total General Fund Taxes

5

  • 1.0%
  • 10.5%
  • 9.1%

7.8% 4.8% 5.9% 5.2% 6.4% 9.4% 3.6%

  • 12%
  • 10%
  • 8%
  • 6%
  • 4%
  • 2%

0% 2% 4% 6% 8% 10% 12%

2007 to 2008 2008 to 2009 2009 to 2010 2010 to 2011 2011 to 2012 2012 to 2013 2013 to 2014 2014 to 2015 2015 to 2016 2016 to 2017

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SLIDE 6

Comparison of GA Tax Rates with Bordering States

Source: Tax Foundation, 2016 6

  • Income tax is the highest personal income tax rate; FL has no state income

tax; TN has a tax on interest and dividends only

  • Sales tax is the average state plus local rate

0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% Income Sales Corporate

SC GA NC AL FL TN

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SLIDE 7

State and National Unemployment Rates

Source: Bureau of Labor Statistics 7

0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11%

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016

Georgia National

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SLIDE 8

Moody’s Bond Rating: Aaa on 7/15/2016

  • Georgia's Aaa General Obligation rating reflects its robust

economy -- which remains a regional outperformer - solid tax revenue trends, conservative fiscal management, and moderate debt and pension liabilities.

  • The outlook for Georgia is stable based on the state's

conservative fiscal management, the current strong trends in revenue growth, and manageable long-term liabilities.

  • Georgia is the 8th-largest state, with a population of 10.2
  • million. It had a gross domestic product of $474.7 billion in

2014, which ranks 10th in the US, and per capita personal income of $40,551.

  • Georgia has had a AAA S&P bond rating every year since at

least 2004

8

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SLIDE 9

State S&P Bond Ratings, 2016

Source: Pew Charitable Trust, 6/6/2016 9 AAA AA+ AA AA- A+ A A- AK ID AL CA KY NJ IL DE MA AZ MI FL MN AR PA GA NM CO IN NY CT IA OH HI MD OK KS MO OR LA NE SC ME NC TN MS ND VT MT SD WA NV TX NH UT RI VA WV WY WI

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SLIDE 10

2016 Higher Education Appropriation Per Capita

Source: Grapevine

10

100 200 300 400 500 600 700 800

Wyoming North Dakota Alaska New Mexico Hawaii Nebraska Illinois North Carolina Mississippi California Connecticut Arkansas Utah Alabama Maryland Georgia New York Minnesota Kansas Iowa Texas Indiana Kentucky West Virginia Oklahoma South Dakota Wisconsin Louisiana Idaho Tennessee Washington Delaware Montana New Jersey Virginia Massachusetts Florida Maine South Carolina Oregon Ohio Nevada Michigan Missouri Rhode Island Colorado Vermont Pennsylvania Arizona New Hampshire

2016 State Appropriaiton per Capita per Grapevine

2015 2016 GA $288 $295 US Average $270 $278 GA Rank (of 50) 16 15

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SLIDE 11

2015-16 In State Tuition and Fees by State

Source: College Board

11

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 $10,000 $11,000 $12,000 $13,000 $14,000 $15,000 $16,000

NH VT PA NJ IL MI SC VA DE MA CT RI MN AZ WA OH HI AL CO ME KY OR CA TN MD IN TX WI MO KS GA SD IA AR LA ND NY NE OK WV MS NC ID NV AK FL UT MT NM WY

Georiga $8,450 US Mean $9,410 GA Rank 31

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SLIDE 12

2016 Appropriation and In-State Tuition for Georgia vs. Border States:

Lower the appropriation, higher the tuition

12

$0 $100 $200 $300 $400 $500 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000

NC AL GA TN FL SC

In-State Tuition Per Capita Appropriation

  • Correlation between tuition and the appropriation for these 6 states = -0.37
  • Correlation for all 50 states = -0.52
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College Attainment: Percent of Adults With a Bachelor’s Degree or Higher

Source: US Census Bureau 13

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Massachusetts Colorado Maryland Connecticut New Jersey Virginia New Hampshire Vermont New York Minnesota Washington Illinois California Kansas Utah Hawaii Delaware Oregon Rhode Island Nebraska Maine Montana Georgia Pennsylvania North Carolina Wisconsin Alaska South Dakota Texas Iowa Arizona Missouri Michigan North Dakota Florida Ohio Wyoming New Mexico South Carolina Tennessee Idaho Indiana Oklahoma Alabama Nevada Louisiana Kentucky Arkansas Mississippi West Virginia

Georgia rank: 23rd highest Georgia: 29% U.S. Average: 28%

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SLIDE 14

14

The State of Georgia

  • Is the state committed

to public higher education?

  • Is the state committed

to public HBCU’s in Georgia?

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SLIDE 15

State Appropriation to all of the University System

  • f Georgia (USG) in Billions

Source: http://www.usg.edu/fiscal_affairs/financial_reporting

15

1.81 1.70 1.74 1.88 1.94 2.02 2.09 0.00 0.50 1.00 1.50 2.00 2.50 2011 2012 2013 2014 2015 2016 2017

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SLIDE 16

Same Graph, Different Scale

16

1.81 1.70 1.74 1.88 1.94 2.02 2.09 1.60 1.70 1.80 1.90 2.00 2.10 2.20 2011 2012 2013 2014 2015 2016 2017

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SLIDE 17

Annual Percentage Changes in Appropriation and Total State Tax Revenues

17

  • 6%
  • 4%
  • 2%

0% 2% 4% 6% 8% 10%

2011 to 2012 2012 to 2013 2013 to 2014 2014 to 2015 2015 to 2016 2016 to 2017 % Change Appropriation % Change tax revenues

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SLIDE 18

2011 to 2017 Percentage Changes in State Appropriation to USG and State Tax Revenues

18

16% 41%

0% 10% 20% 30% 40% 50%

% Change Appropriation % Change tax revenues

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SLIDE 19

State Appropriation to USG as a Percentage of Total State Tax Revenue

Source: http://www.usg.edu/fiscal_affairs/financial_reporting

19

In Billions

2011 2012 2013 2014 2015 2016 2017

USG Appropriation

1.81 1.70 1.74 1.88 1.94 2.02 2.09

Total Tax Revenues

15.31 16.05 17.00 17.88 19.03 20.81 21.56

% of Tax Revenues

11.8% 10.6% 10.3% 10.5% 10.2% 9.7% 9.7%

8% 9% 10% 11% 12% 13% 14% 15% 16% 2011 2012 2013 2014 2015 2016 2017

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SLIDE 20

Per Student Appropriation to the University System of Georgia (USG)

Source: http://www.usg.edu/research/enrollment_reports

20

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

USG Appropriaiton in Billions

1.86 2.03 2.02 1.69 1.81 1.70 1.74 1.88 1.94 2.02

HC Enrollment USG

259,945 270,022 282,978 301,892 311,442 318,027 314,365 309,469 312,936 318,164

Appropriaiton per Student

$7,164 $7,536 $7,139 $5,608 $5,803 $5,351 $5,549 $6,077 $6,208 $6,338

$4,000 $4,500 $5,000 $5,500 $6,000 $6,500 $7,000 $7,500 $8,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Appropriaiton per Student

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SLIDE 21

Basic Setup of Higher Education Institutions in Georgia

  • University System of Georgia (USG)
  • Technical College System of Georgia (TCSG)
  • Independent Public Institution (GA Military)
  • Private Colleges and Universities
  • Where do HBCUs Fit in Georgia?
  • 3 are part of USG
  • 4 are private institutions

21

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SLIDE 22

Institutions Analyzed

22

HBCU Georgia Public Georgia Public Non HBCU

HBCU Georgia Private

Georgia Private non HBCU

Savannah State Augusta Morehouse Emory Fort Valley State Clayton State Spelman Mercer Albany State Columbus State Clark Atlanta Wesleyan Georgia College Paine Agnes Scott Georgia Tech Georgia Perimeter Georgia State Young Harris Kennesaw State

Savannah C Art & Design

U of West Georgia Berry College Valdosta State Oglethorpe U of Georgia

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Consolidations in the University of Georgia System

23 Georgia State University August State University merges with merges with Georgia Perimeter College

Georgia Health Sciences University

and becomes and becomes Georgia State University Georgia Regents University In 2015, changes name to: Augusta University Kennesaw State University merges with

Southern Polytechnic State University

and becomes Kennesaw State University

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SLIDE 24

2016 Enrollment and Racial Composition of Public HBCU’s and Other GA Publics

Sources: http://www.usg.edu/research/enrollment_reports and http://www.chronicle.com/section/Facts-Figures/58/

24

% Black % Hispanic Combined Enrollment 2015 State Appropriation Appropriation per Student

Fort Valley State

94.1% 1.2%

95.3% 2,594

23,309,344 $8,986

Savannah State

87.2% 2.5%

89.7% 4,915

19,458,854 $3,959

Albany State

88.2% 1.1%

89.3% 3,910

19,326,043 $4,943

Clayton State

61.3% 2.5%

63.8% 7,022

24,192,783

$3,445

Georgia State

41.2% 8.4%

49.6% 53,927

239,977,179

$4,450

State of Georgia

31.7% 9.4%

41.1%

Columbus State

35.7% 5.3%

41.0% 8,192

33,300,304

$4,065

U of West Georgia

35.1% 4.1%

39.2% 12,206

48,167,093

$3,946

Valdosta State

33.4% 4.2%

37.6% 11,563

49,347,815

$4,268

Augusta

21.1% 5.0%

26.1% 8,530

187,452,806

$21,976

Kennesaw State

18.8% 7.2%

26.0% 32,500

107,782,189

$3,316

U of Georgia

8.0% 4.7%

12.7% 35,197

400,083,488

$11,367

Georgia College

7.5% 4.9%

12.4% 6,772

29,636,189

$4,376

Georgia Tech

5.6% 5.6%

11.2% 23,108

227,216,008

$9,833

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SLIDE 25

Georgia Publics:

Enrollment and Minority Percentage Graphically

25 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 60,000 Enrollment % Black + Hispanic

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SLIDE 26

Correlations for Georgia Publics

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  • 0.56
  • 0.42
  • 0.27

0.74

  • 1.00
  • 0.75
  • 0.50
  • 0.25

0.00 0.25 0.50 0.75 1.00

Minority % and Appropriation Minority % and Enrollment Minority % and Per Student Appropriation Appropriation and Enrollment

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SLIDE 27

2015 Appropriation to Georgia Publics

Source: http://www.usg.edu/fiscal_affairs/financial_reporting 27

25,000,000 50,000,000 75,000,000 100,000,000 125,000,000 150,000,000 175,000,000 200,000,000 225,000,000 250,000,000 275,000,000 300,000,000 325,000,000 350,000,000 375,000,000 400,000,000 425,000,000

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SLIDE 28

2015 State Appropriation per Student

28

2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000 HBCU Average

$5,438

Non HBCU Average

$6,769

Non HBCU Median

$4,322

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SLIDE 29

Racial Data and Enrollment of Georgia Private Institutions

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Sources: http://www.usg.edu/research/enrollment_reports and http://www.chronicle.com/section/Facts-Figures/58/

% Black % Hispanic Combined Enrollment Endowment Morehouse 94.3% 0.6% 94.9% 2,109 $137,985,811 Paine 88.9% 1.7% 90.6% 848 $9,329,221 Spelman 86.9% 0.3% 87.2% 2,135 $367,036,697 Clark Atlanta 84.1% 0.4% 84.5% 3,485 $66,719,772 Agnes Scott 33.0% 8.9% 41.9% 873 $272,331,405 Wesleyan 31.9% 4.4% 36.3% 711 $63,251,978 Mercer 29.8% 3.9% 33.7% 8,552 $256,919,032 Oglethorpe 18.5% 10.3% 28.8% 1,094 $19,664,387

Savannah C Art & Design

11.2% 7.6% 18.8% 11,347 $18,629,324 Emory 10.0% 5.9% 15.9% 14,769 $6,981,307,921 Berry College 4.3% 6.2% 10.5% 2,177 $925,698,267 Young Harris 6.2% 4.0% 10.2% 1,218 $117,372,377

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Georgia Privates: Enrollment and Minority Percentage Graphically

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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000

Enrollment % Black + Hispanic

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SLIDE 31

Correlations: Private Institutions in Georgia

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  • 0.37
  • 0.32

0.69

  • 1.00
  • 0.80
  • 0.60
  • 0.40
  • 0.20

0.00 0.20 0.40 0.60 0.80 1.00

Minority % and enrollment Minority % and endowment Endowment and Enrollment

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SLIDE 32

Changes in Appropriation: 2011 to 2015 and 2015 to 2017

32

  • 10%
  • 5%

0% 5% 10% 15% 20% 25%

% Change in Appropriation 2011 to 2015 % Change in Budget Appropriation 2015 to 2017

  • 0.4%

8.3%

2011 to 2015 2015 to 2017 HBCU Avg 8.2% 8.7% Non-HBCU Avg 5.6% 9.6%

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SLIDE 33

Changes in Enrollment and Per Student Appropriation, 2011 to 2016

33

  • 12%

3% 25% 6%

  • 30%
  • 20%
  • 10%

0% 10% 20% 30% 40% 50%

SSU HBCU Total Albany State FVSU Georgia Tech Kennesaw West Georgia Clayton U of Georgia Non HBCU Total Georgia College Columbus Georgia State Valdosta Augusta

% Change in Enrollment % Change in Appropriation per Student

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SLIDE 34

34

Financial Analysis of HBCUs and Other Institutions in Georgia

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SLIDE 35

Data Needed and Where to Get It

35

Item Description Where Do You Find the Info? Audited Financial Statements

Report assets, liabilities, net assets; revenues, expenses; cash flows, all affirmed by an

  • utside, independent auditor; what actually

happened University website; bond website (emma.org); ask the administration

IRS 990

For private universities only: Reports financial information at a general level; number of contractors; revenues and expenses at broad level; salaries of top administrators www.guidestar.org; but only 2014 may be available now; ask the administration

IPEDS finance submission for 2015

IPEDS = Integrated Postsecondary Education Data System of the U.S. Dept. of Education; the finance submission tells us the cash spent

  • n salaries and benefits

All years up to 2014 are available on the IPEDS site; 2015 will not be publicly available until 2017, but the admin created and submitted this to the feds in April of 2016

IPEDS Human Resource submission for 2015-16

Information on the number of faculty, number of employees, breaking down faculty by tenure status, part time; salaries of faculty and non-instructional personnel All years up to 2014 are available on the IPEDS site; 2015 will not be publicly available until 2017, but the admin created and submitted this to the feds in April of 2016

Common Data Set

Data on enrollment, admissions, degrees conferred, graduation rates, retention rate, number of full time and part time faculty, class size Most private and public universities have these publicly available on the institutional research website

Budget for 2016-17 and prior years

Reports future revenues and expenditures; it always balances (revenues exactly equals expenditures); not audited by an outside party; the admin can include or exclude revenues or expenses as they like This is hit and miss; some institutions put some sort of budget on their website; but watch out for budgets that are General Fund

  • nly - they do not include all revenues and

expenditures

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SLIDE 36

Comparison of Data Sources

36

Audited financial statements are certified by an independent outside auditor, using standard accounting rules and principles

Bond ratings are determined by examining numerous standard ratios from audited financial statements, as well as other data such as enrollment, applications. This is all done by an outside, independent party. Budgets are created by university administrators, are not required to be audited or reviewed by an

  • utside party, and budgets

are not subject to standard accounting rules and principles.

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SLIDE 37

Audited Financials for USG Institutions

  • http://www.usg.edu/fiscal_affairs/financial_reporting
  • Pictures on the first few pages
  • Official letters – notice the February date
  • Management Discussion and Analysis (MD&A)
  • Reserves on page 12/18 and pension issue
  • Pie chart of revenue (page 14/20)
  • Expense distribution on page 15/21
  • System-wide financial statements, pate 21/27
  • Statement of Net Position (Balance Sheet)
  • Statement of Revenues, Expenses, and Change in Net

Position (Income Statement)

  • Statement of Cash Flows

37

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Individual Institution Data in the USG Audited Financial Statements

  • Starts with Supplemental Information, page 87/93
  • Assets, Liabilities, Net Position pages 88-90/94-96
  • Revenue breakdown on pages 92-93/98-99
  • Difference between revenues and expenses: page 94/100
  • Very little individual expense data – we will need IPEDS for

that

  • The last 20 pages of the report are for the foundations and

affiliated organizations

38

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SLIDE 39

Data for Wesleyan College

  • Audited statements are not on the College’s website; nor is

there any budget data of any significance

  • The IRS 990 for 2015 is on www.guidestar.org
  • Top Salaries on page 7
  • Revenues on page 9
  • Expenses on page 10
  • Balance sheet on page 11
  • Endowment on page 22

39

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SLIDE 40

40

Revenue Distribution:

Publics: USG Audited Statements or IPEDS Privates: Audited Financials or IPEDS (Not IRS 990)

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SLIDE 41

2015 Revenue Distribution of GA Publics

Source: USG Audited Statements 41

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Other State Appropriation Grants & Contracts Auxiliaries Tuition & Fees, Net

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SLIDE 42

2015 Revenue Distribution: All HBCUs and Non-HBCUs

42

0% 5% 10% 15% 20% 25% 30% 35% 40% Tuition & Fees, Net Auxiliaries Grants & Contracts State Appropriation Other

HBCU Non-HBCU

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SLIDE 43

Undergraduate In-State Tuition and Mandatory Fees

Source: http://www.usg.edu/fiscal_affairs/tuition_and_fees

43

$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000

HBCU Average = $6,547 Non HBCU Average = $9,011

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SLIDE 44

Discount Rate Applied to Tuition and Fees

Source: IPEDS

44

0% 10% 20% 30% 40% 50% 60%

HBCU Average = 43% Non HBCU Average = 19%

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SLIDE 45

Publics: % of Students Receiving Pell Grants

Source: IPEDS 45 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% HBCU Average = 74% Non HBCU Average = 40%

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SLIDE 46

2016 Private University Tuition and Fees

Source: IPEDS 46

$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000

HBCU Average = $22,325 Non HBCU Average = $33,384

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SLIDE 47

Private University Pell Rate per IPEDS

47

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

HBCU Average = 63% Non HBCU Average = 34%

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SLIDE 48

48

Expense Analysis: Is the Administration Committed to the Core Academic Mission

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SLIDE 49

2015 Expense Distribution for all of USG

Source: USG Audited Financial Statements; Hospital costs of GSU taken out

49

26%

17% 5% 8% 5%

15%

10% 4% 11% Instruction Research Public Service Academic Support Student Services Institutional Support Plant Scholarships Auxiliary

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SLIDE 50

Expense Category Definitions

50

Instruction

Salaries.of.those.who.teach;.academic.admins.are.out

Academic.Support

Deans.and.Libraries;.Advising

Auxiliaries

Housing,.dining,.bookstore,.parking,.athletics

Institutional.Support

Upper.level.administration

Scholarships/Student.Aid Direct.aid.to.students

Plant

Buildings.and.grounds

Student.Services

Admissions;.student.orgs Research Includes.external.grants.and.internal.spending

Depreciation

Estimated.decline.in.value.of.buildings

Public.Service

Conferences.and.institutes

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SLIDE 51

Publics: Instruction and Research Expenses as % of Total Expenses per IPEDS, 2014

51

Institution Instruction % Research % Combined

Georgia Tech 21.8% 53.3% 75.1% Georgia State 35.8% 20.2% 56.0% U of Georgia 23.8% 28.4% 52.2% Augusta 38.5% 11.6% 50.1% Columbus 43.7% 0.1% 43.8% Kennesaw 39.7% 0.4% 40.1% West Georgia 39.0% 1.0% 40.0% Albany 36.1% 2.7% 38.8% Valdosta 37.4% 0.2% 37.6% Clayton 36.8% 0.1% 36.9% Georgia College 34.1% 0.5% 34.6% FVSU 20.8% 8.6% 29.5% SSU 24.0% 1.6% 25.6% Non-HBCU Average 35.1% 11.6% 46.6% HBCU Average 27.0% 4.3% 31.3%

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SLIDE 52

Institutional Support as a % of Total Expenses

52

Public Institution Inst Support % Private Institution Inst Support % Albany 18.5% Spelman 26.7% Augusta 17.1% Paine College 25.2% FVSU 16.6% Clark Atlanta 24.6% Valdosta 13.0% Morehouse 24.1% Columbus 12.8% SCAD 22.6% Kennesaw 11.7% Berry 19.6% West Georgia 11.7% Agnes Scott 19.3% Georgia College 11.5% Wesleyan 18.7% SSU 11.4% Young Harris 17.3% Clayton 11.4% Emory 11.2% U of Georgia 6.3% Oglethorpe 10.2% Georgia State 6.2% Mercer 9.6% Georgia Tech 5.8% HBCU Average 15.5% HBCU Average 25.2% Non HBCU Average 10.7% Non HBCU Average 16.1%

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SLIDE 53

HBCU Institutional Support Dollars Above Average: Extra Dollars Spent on Upper-Level Administration

53

HBCU Savings if Admin Costs Were Average Albany $5,317,264 FVSU $4,166,296 SSU $627,154 Spelman $9,160,829 Clark Atlanta $7,310,316 Morehouse $7,015,190 Paine $2,224,618

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SLIDE 54

Instruction Salaries and Benefits in Context for Publics per IPEDS

54

Institution Name Instruction and Research Salaries + Benefits as % of Total Expenses Instruction and Research Salaries + Benefits as % of Total Salaries & Benefits Georgia Tech 45.4% 75.3% Georgia State 39.7% 65.3% U of Georgia 36.1% 53.8% Augusta 35.1% 50.3% Kennesaw 31.6% 53.7% Columbus 31.3% 55.3% Albany 29.6% 50.5% Valdosta 28.9% 52.9% Clayton 28.3% 47.8% West Georgia 28.0% 51.1% Georgia College 24.2% 47.9% FVSU 23.1% 41.4% SSU 19.0% 42.1% HBCU Average 23.9% 44.7% Non HBCU Average 32.8% 55.4%

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SLIDE 55

Instruction Salaries and Benefits in Context for Privates per IPEDS

55

Institution Name Instruction and Research Salaries + Benefits as % of Total Expenses Instruction and Research Salaries + Benefits as % of Total Expenses Mercer 38.0% 61.3% Clark Atlanta 28.5% 53.2% Paine 26.8% 54.1% Wesleyan 25.3% 45.4% Spelman 24.2% 44.9% Morehouse 22.2% 50.4% SCAD 21.9% 49.1% Berry 21.4% 45.9% Young Harris 20.3% 44.6% Agnes Scott 19.1% 40.3% Emory 18.1% 29.5% Oglethorpe 14.1% 48.0% HBCU Average 25.4% 50.6% Non HBCU Average 22.3% 45.5%

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SLIDE 56

Instructional Class Coverage Distribution 2015 per IPEDS for Public Institutions

56

27% 11% 11% 33% 17%

Tenured Tenure Track Full Time NTT Part Time Grad Teaching

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SLIDE 57

Change in Instructional Staff for Georgia Publics From 2011 to 2015 per IPEDS: Huge Increase in Part Time Faculty

57

2011 2015 # Change % Change Tenured 3,876 3,806 (70)

  • 2%

Tenure Track 1,948 1,587 (361)

  • 19%

Full Time NTT 1,680 1,577 (103)

  • 6%

Part Time 1,356 4,658 3,302 244% Grad Teaching 1,817 2,301 484 27% TOTAL 10,677 13,929 3,252 30%

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SLIDE 58

Changes at FVSU

58

Fort Valley 2011 2015 # Change % Change Full 46 25 (21)

  • 46%

Associate 26 28 2 8% Assistant 66 18 (48)

  • 73%

Instructor/Lecturer/Other

6 15 9 Total 144 86 (58)

  • 40%

Tenured 65 65 0% Tenure Track 51 8 (43)

  • 84%

Non Tenure Track 28 13 (15)

  • 54%

Total Full Time 144 86 (58)

  • 40%

Part Time 80 8 (72)

  • 90%

Grad Teaching Enrollment 3,728 2,594 (1,134)

  • 30%
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SLIDE 59

Deeper Examination at FVSU Salaries: As Enrollment Dropped: Faculty Salaries Went Down Administration Went Salaries Up

59

2010 2014 # Change % Change

Instruction salaries + Benefits

$14,390,435 $12,928,439 ($1,461,996)

  • 10%

Institutional support salaries + benefits

$7,108,103 $8,779,910 $1,671,807

24% Total Salaries + Benefits (All employees)

$40,823,684 $39,615,145 ($1,208,539)

  • 3%

Total Expenses

$76,558,683 $70,766,831 ($5,791,852)

  • 8%
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SLIDE 60

2015 GA Public Faculty Salaries per AAUP Survey

HBCU Salaries are 12% to 31% Below Non HBCU Salaries

60

$0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 Mean HBCU Mean Non HBCU Median Non HBCU

Full Associate Assistant

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SLIDE 61

2015 Campus Specific Salaries for Publics

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HBCUs Full Associate Assistant Albany $72,708 $59,967 $54,092 SSU $68,445 $58,914 $51,399 FVSU $63,801 $52,965 $48,357 Mean $68,318 $57,282 $51,283 Median $68,445 $58,914 $51,399 Non HBCUs Full Associate Assistant Georgia Tech $151,673 $103,310 $96,921 Georgia State $124,582 $83,421 $81,508 U of Georgia $116,358 $85,531 $81,613 Augusta $112,519 $80,081 $72,501 Kennesaw $87,035 $69,247 $58,391 Clayton $80,916 $62,460 $57,349 West Georgia $79,876 $61,271 $56,253 Georgia College $79,364 $67,179 $56,787 Valdosta $77,786 $62,452 $58,047 Columbus $74,240 $65,740 $55,465 Mean $98,435 $74,069 $67,483 Median $83,976 $68,213 $58,219

% Mean Difference

  • 31%
  • 23%
  • 24%

% Median Difference

  • 18%
  • 14%
  • 12%
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SLIDE 62

2015 Campus Specific Salaries for GA Privates

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HBCUs Full Associate Assistant Spelman $91,656 $69,651 $62,487 Morehouse $83,772 $67,430 $55,216 Clark Atlanta $71,978 $61,744 $53,922 Paine $47,502 $48,348 $43,569 HBCU Average $73,727 $61,793 $53,798 HBCU Median $77,875 $64,587 $54,569 Non HBCUs Full Associate Assistant Emory $160,121 $110,434 $93,086 Agnes Scott $92,925 $73,156 $62,963 Mercer $88,985 $69,926 $65,945 Berry College $87,650 $66,757 $57,513 SCAD $75,861 Oglethorpe $74,146 $58,662 $51,671 Young Harris $73,098 $51,588 $54,605 Wesleyan $64,934 $52,165 $49,992 Non HBCU Average $89,715 $68,955 $62,254 Non HBCU Median $81,756 $66,757 $57,513 % Mean Difference

  • 18%
  • 10%
  • 14%

% Median Difference

  • 5%
  • 3%
  • 5%
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SLIDE 63

63

Bond Ratings and Overall Financial Analysis

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SLIDE 64

Fichtenbaum-Bunsis Ratio Scores

64

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SLIDE 65

Bond Ratings of Georgia Institutions

Source: Moodys.com 65

Aa2 Aa3 A 1,2,3 Ba1, 2 Baa1, 2 No Rating

University

  • f

Georgia

Georgia Tech Augusta Morehouse (Ba1) Savannah Art Savannah State U of Georgia Georgia State Columbus State Clark Atlanta (Ba2) Mercer Albany State Emory Georgia Perimeter Georgia College Clayton State Kennesaw State Paine U of West Georgia Wesleyan Valdosta State Bainbridge Spellman (A1) Young Harris Fort Valley State (A2) Berry College Agnes Scott (A3) Oglethorpe

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SLIDE 66

Moody’s Bond Ratings in Higher Education 2015 Public Sector

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8 12 41 46 69 22 19 8 2 3 10 20 30 40 50 60 70 80 Aaa Aa1 Aa2 Aa3 A1 A2 A3 Baa1 Baa2 Baa3 SG

US Public University Ratings

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SLIDE 67

Moody’s Bond Ratings in Higher Education 2015 Private Sector

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S-T 15 11 20 25 33 38 40 33 26 21 12 5 10 15 20 25 30 35 40 45 Aaa Aa1 Aa2 Aa3 A1 A2 A3 Baa1 Baa2 Baa3 SG S-T

US Private University Ratings

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SLIDE 68

Moody’s on USG: October 3, 2016

  • Strengths
  • The wealth of the system with healthy reserves
  • USG is the dominant provider of public higher education in

the Aaa-rated State of Georgia.

  • The system's favorable tuition pricing, enrollment growth,

and diverse revenue sources will continue to support sound debt service coverage.

  • While financial leverage for some colleges is high, overall

financial leverage is manageable and USG's future borrowing plans are limited.

  • Challenges
  • Thin unrestricted liquidity relative to a large expense base,

growing retirement benefit obligations, and ongoing capital needs.

  • The rating also incorporates the annual renewal and

abatement risk associated with the lease obligation supporting the bonds.

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SLIDE 69

Fort Valley State Moody’s Bond Rating

  • Moody's upgrades Univ Sys of GA's (Fort Valley State

University Foundation Property, LLC Project) to A2;

  • Outlook stable 10/15/2014
  • The upgrade for the Student Housing Facilities Revenue

Bonds (Fort Valley State University Foundation Property, LLC Project), Series 2006 acknowledges the extraordinary support the University System of Georgia (USG) has now demonstrated it will provide to Fort Valley State University, as well as other member campuses.

  • Fort Valley will be permitted to use centralized reserves to

fund PPV debt service in fiscal year (FY) 2015 and the system has increased the allotment of state appropriations to the university for FY 2015.

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SLIDE 70

Strengths and Challenges for FVSU

  • STRENGTHS
  • An annually renewable lease with the Board of Regents of the University of

Georgia System (USG) underpins the credit of the Series 2006 project at Fort

  • Valley. USG is a large, diverse system with good operating cash flow

performance and over $1.2 billion of unrestricted monthly liquidity.

  • The Board has implemented greater oversight and control of the system,

including new policies and procedures governing use of the PPV program.

  • Fort Valley State University will be able to access a centralized reserve for

required debt service payments on the 2006 project in FY 2015. The system is actively working with Fort Valley to implement turnaround strategies.

  • The system has, in recent years, more concretely demonstrated support for
  • ther struggling campuses.
  • USG receives significant direct financial and capital support from the Aaa-

rated State of Georgia, although operating funding on a per student basis has declined since 2009. The state offers significant student financial aid programs supporting state-wide student demand.

  • CHALLENGES
  • Fort Valley will continue to be financially challenged for multiple years due to

a steep Fall 2014 enrollment decline.

  • Oversight of the system is complex, with over 30 campuses
  • USG has large pension and other post-retirement benefit liabilities that will

also require increased funding.

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SLIDE 71

Clark Atlanta Moody’s Rating October 5, 2016

  • Moody's Affirms Clark Atlanta University, GA's Ba2;

Outlook Stable

  • The Ba2 rating reflects a highly vulnerable and volatile

student market position stemming from a narrow and price sensitive enrollment base.

  • The rating also incorporates heavy dependence on

student-related revenue sources, variable operating performance, and modest liquidity.

  • The rating favorably reflects improving operating

performance, an emerging trend of enrollment and revenue growth, and a manageable debt burden.

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SLIDE 72

Morehouse Bond Rating Moody's Downgrades Morehouse College, GA to Ba1; Outlook Negative

August 2016

  • While acknowledging some improvement in stabilizing enrollment and
  • perating performance, the downgrade to Ba1 reflects an expectation
  • f continued weak revenue growth, combined with limited financial

flexibility.

  • The rating incorporates a fiercely competitive student market,

exacerbated by a narrow niche.

  • Morehouse is revising its business model to focus more heavily on

increasing philanthropy to support a sustainable financial model.

  • The Ba1 rating expresses some demonstrated history of fundraising

prowess, yet the ability to sustainably shift to a higher level of unrestricted giving and expand its donor base is uncertain.

  • Morehouse's operating performance and liquidity profile are modest,

notably given the significant headwinds the college is facing.

  • The Ba1 rating favorably reflects an expectation that cost reduction

efforts will continue to gain traction while the debt burden remains manageable.

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SLIDE 73

73

The Importance

  • f HBCU’s in the

United States

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SLIDE 74

University System of GA Board of Regents 2015

74

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SLIDE 75

University System of GA Presidents 2015

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SLIDE 76

6 Reasons Why HBCUs Are More Important Than Ever

  • Dr. Michael Lomax, CEO and president of UNCF

July 16, 2016

  • 1. Outsized Impact, Low-Cost = “Best Buy” in

Education

  • Today, the nation’s 106 HBCUs make up just 3 percent of

America’s colleges and universities, yet they produce almost 20 percent of all African American graduates and 25 percent of African American graduates in the STEM fields

  • f science, technology, engineering and mathematics — the

critical industries of the future.

  • And HBCU tuition rates are on average almost 30 percent

less than at comparable institutions — that’s why they’re

  • ften referred to as the best buy in education.

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SLIDE 77
  • 2. Meeting the Needs of Low-income, First-

generation Students

  • HBCUs provide a stable and nurturing environment for

those most at risk of not entering or completing college: low-income, first-generation college students. Many of these students are academically underprepared for college, yet they’re precisely the students that the country most needs to obtain college degrees.

  • On average, more than 300,000 students attend HBCUs

each year, and 80 percent of them are African Americans. It’s also worth noting that HBCUs are serving those who need it the most — more than 70 percent of all students at HBCUs qualify for federal Pell Grants and 80 percent of HBCU students receive federal loans.

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SLIDE 78
  • 3. Lower Costs Narrow the Racial Wealth Gap
  • 43 million Americans across the racial and socioeconomic

spectrum have nearly $1.3 trillion in college loans, black households are far more likely to have student debt at all income levels.

  • About 54 percent of African Americans between the ages
  • f 25 and 40 have student loans, compared with 39

percent of white Americans in that age group.

  • By providing a best value in education, HBCUs help to

eliminate or reduce student debt for low- to middle- income families

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SLIDE 79
  • 4. Campus Climate Fosters Success
  • Students of color feel more at home and perform better in

schools where they feel supported and safe. The student environment fit is very important for student success. A recent report reaffirmed just how important campus climate is to student outcomes.

  • The Gallup-Purdue poll noted that black graduates of

HBCUs are significantly more likely to have felt supported while in college and to be thriving afterward than their black peers who graduated from predominantly white institutions.

  • For more than 150 years, HBCUs have been providing

diverse learning environments — from students to faculty to administration — ensuring that every student has a chance to succeed.

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SLIDE 80
  • 5. Addresses the Nation’s Under- and

Unemployment Crisis

  • The nation needs HBCUs now more than ever. By early

2015, the underemployment rate for recent college graduates had reached 44 percent. For African American college graduates, that rate was even higher — 56 percent.

  • At the same time, the unemployment rate for African

American college graduates between ages 22 and 27 is roughly 12.4 percent, more than twice the rate of their white counterparts.

  • Given their proven track record of influencing the

academic success of African Americans, now more than ever greater investment is needed in HBCUs.

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SLIDE 81
  • 6. HBCUs Offer a True Value/Values

Proposition

  • HBCUs are rooted in faith, community and service. Black

churches have long been pillars of the black community and the history and life of black colleges are closely intertwined with faith, values and service to others.

  • HBCUs offer a true value/values proposition: not only are

they are a great value to their students, but they also produce students with great values.

  • For more than 100 years, HBCUs have been educating

minorities, giving them economic opportunities and instilling great values. Not only have they consistently produced leaders in their communities and across the nation, but HBCUs today are consistently and affordably producing the leaders of the future.

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SLIDE 82

Georgia Historically Black College Fights For Accreditation

Atlanta Journal Constitution, 9/19/2016

  • Paine College in Augusta is in a fight to regain accreditation

after the Southern Association of College and Schools Commission on Colleges (SACSCOC) denied Paine’s appeal

  • f it’s earlier loss of status
  • SACSCOC removed Paine last summer for failing to meet

standards for financial resources and stability and control

  • f sponsored research and external funds.
  • The 133-year-old historic black college has instructed its

attorneys to file a lawsuit in the United States District Court seeking an order to delay the action and compelling the accrediting agency to restore its accreditation.

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SLIDE 83

AAUP Members Can Stand With Students and Faculty and Community Members to Support the Historic Role and Mission of HBCU’s

  • HBCU Students Stand In Solidarity With American

University Amidst Racist Events; September 26, 2016 www.hbcubuzz.com

  • 34 HBCU Leaders Come Together In Support Of

#BlackLivesMatter Movement; July 21, 2016

  • The presidents of Spellman, Morehouse, and Fort

Valley State have signed the letter

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SLIDE 84

84

AAUP Activism and Collective Action in the State of Georgia

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SLIDE 85

November-December Issue of Academe: Race on Campus

  • Campus Activism and Competing Racial Narratives How student

activism reinforces academic freedom. By Peter Halewood

  • From Punitive Pedagogies to Liberated Learning Employing

critical pedagogies to further social justice. By Janell Hobson

  • Campus Activism, Academic Freedom, and the AAUP What the

AAUP can do to support student activists. By Emily M. S. Houh

  • Teaching Palestine The importance of bringing the Israel-

Palestine conflict into the mainstream. By Rana Jaleel

  • Why Standardized Tests Have Standardized Postracial Ideology

Putting “race-neutral” admissions standards on trial By Ibram X. Kendi

  • Eight Actions to Reduce Racism in College Classrooms When

professors are part of the problem. By Shaun R. Harper and Charles H. F. Davis III

  • Austerity and Academic Freedo Questioning the commonplace
  • n the terrain of austerity By Anthony Paul Farley

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SLIDE 86

AAUP Unions at HBCU’s

  • Delaware State University (DE)
  • Edward Waters College (FL)
  • Lincoln University (PA)
  • Central State University (OH)
  • Wilberforce University (OH)

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SLIDE 87

Building up the AAUP Chapter

  • An effective faculty voice must be done collectively
  • Acting alone or as individuals will not be impactful
  • The AAUP stands for something:
  • Academic freedom
  • Shared governance
  • Faculty and workers have a voice in the process and a

seat at the table

  • Part of a historic national and state organization

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SLIDE 88

Faculty Have to Act Collectively

  • The full time faculty at private institutions are unlikely to unionize.

Legally, there are significant roadblocks:

  • Yeshiva (can be overcome in very unique circumstances)
  • Religious nature of some institutions
  • In Georgia, due to lack of “enabling” legislation for faculty in higher

education, it will be virtually impossible for faculty to unionize at public institutions in the state

  • But you can act like a union – act collectively
  • This does not mean storming the gates
  • It does mean coordinated actions
  • Wearing buttons
  • Wearing stickers
  • AAUP stickers on office doors
  • Handing out buttons at graduation
  • Standing united outside a Board meeting
  • Sending a letter to the administration signed by 30 AAUP

members, as well as students and others from campus and community

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SLIDE 89

What are the Goals?

  • To have a seat at the table and a voice in the process
  • To have a more effective voice – with the goal of making

the institution better. As faculty, you are deeply committed to the success of your students and the

  • university. If the administration listened and worked more

extensively with the faculty, the educational experience of the students would be enhanced

  • More interaction with Board
  • A real faculty voice on financial matters
  • Getting the audited financial statements in a timely

fashion

  • Getting the IRS 990 in a timely fashion
  • Recommend metrics related to the percent of

resources devoted to the core academic mission

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SLIDE 90

Collective Action: Kennesaw State

Marietta Daily Journal; October 10, 2016

  • Two days before a vote to install Attorney General Sam Olens as

Kennesaw State University’s next president, protests from faculty and students against the impending appointment continued Monday on the campus green.

  • An estimated 200 to 300 participants stand in silence with their backs

toward Kennesaw Hall, which houses the university president

  • Scott Ritchie, an associate professor of language and literary education

and one of the organizers of the protest, said “What the faculty are most concerned about is the lack of a national search for the new

  • president. The decision to appoint Sam Olens was made behind closed

doors,” Ritchie said. “They are also concerned with Olens’ political stance on things like transgender bathrooms, gay marriage and things like that that have the campus community concerned because we have a large LGBT population here and have been winning national diversity awards for the past two years.”

  • Online petition at:

http://www.thepetitionsite.com/201/634/352/keep-ksu-safe-for- lgbtq-students/

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SLIDE 91

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SLIDE 92

More from KSU – Letter from the National AAUP to Regents Chairman Kessel Stelling Jr.

  • “While the decision of the regents to forego a national

search may be permissible under the applicable University System of Georgia policies, the decision is at odds with widely observed principles of academic governance, as it deprives the faculty of its appropriate role in the process,” wrote Hans-Joerg Tide, an associate secretary of the AAUP.

  • “We urge the board of regents not to remove the faculty

from the process and instead to conduct a national search with full participation from the faculty.”

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SLIDE 93

Kennesaw State Names Controversial Politician as President Without National Search

Chronicle of Higher Education October 12, 2016

  • Sam Olens, Georgia’s attorney general, was named on Wednesday as

president of Kennesaw State University by the University System of Georgia’s Board of Regents, according to a university news release.

  • In a rare move, Mr. Olens was selected without a national search to fill

the position, a point of conflict for many faculty members who regarded his appointment as a threat to shared governance.

  • Students and faculty members attended Wednesday’s meeting of the

Board of Regents to protest Mr. Olens’s appointment

  • On Monday the American Association of University Professors asked

the college to conduct a national search and include faculty members in the hiring process.Hans-Joerg Tiede, the association’s senior program officer, on Wednesday called the appointment “an unwelcome development. “We continue to be concerned that this process pretty much excluded the faculty entirely,” he said. “We also have held for a long time that we believe that university presidents should have significant experience in educational matters and that is also, in this case, apparently lacking.”

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SLIDE 94

AAUP Statement on Presidential Searches November 3, 2015

  • The AAUP's November 3 Statement on Presidential Searches

calls upon colleges and universities to avoid closed, secretive searches and clarifies existing AAUP policies about presidential searches.

  • Contrary to the AAUP's principles of shared governance,

governing boards at several campuses around the country have conducted secretive searches in recent months without adequate faculty and public participation in the process.

  • While AAUP policies acknowledge the need for a confidential

phase in which a search committee may develop the initial candidate pool, such search committees should involve faculty members.

  • All searches should include an open phase, involving campus

visits and a public forum in which faculty, students, and others can share their opinions. The statement argues that the

  • bligations of public and private non-profit colleges and

universities to serve the public interest necessitate the protections of shared governance, including faculty engagement in all phases of the hiring process.

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SLIDE 95

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