[PPT] - South Dakota Board of Regents Fiscal Year 2020 Budget Hearing Joint PowerPoint Presentation

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South Dakota Board of Regents

Fiscal Year 2020 Budget Hearing Joint Appropriations Committee

January 28-29, 2019

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Stewardship of Public Higher Education

in South Dakota

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John W. Bastian Vice President Jim Thares David Mickelson Jim Morgan Secretary Lucas Lund Pam Roberts Joan Wink Kevin Schieffer President Randy Schaefer

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Mission Statement

The South Dakota Board of Regents’ mission is to provide

an excellent, efficient, accessible, equitable, and affordable public university and special schools system

that improves South Dakota’s overall educational

attainment and research productivity,

while enriching the intellectual, economic, civic,

social, and cultural life of the state, its residents, and its communities.

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Organizational Structure

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Looking Ahead

Improve student financial aid support
Develop and secure funding for needs-based program such as Dakota’s Promise
Tailor academic programs to workforce development and business/industry

needs:

Certificates
Minors
Degrees
Foster educational environments that

reflect a broad array of perspectives, which support debate, argument, dissent, and affirmation of differing and diverse opinions, viewpoints, and beliefs.

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65 Percent by 2025

Goal is based on projections that roughly 65 percent of all jobs in South Dakota will

require some level of postsecondary education by 2020.

Data from Georgetown University Public Policy Institute’s Center on Education and the Workforce.
65% goal was adopted by Board of Regents, Department of Education, and the South

Dakota Workforce Development Council.

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Higher Education in South Dakota

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Higher Education in South Dakota

Attracts and generates income
Draws new and expanded business
Enhances individual wealth

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Attracts and Generates Income

$270 million in federal money in FY18
Compares to $211 million from state’s General Fund

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Source: SDBOR Fact Book 2019

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2016 Study: Economic Impact of the South Dakota Public University System

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$2.66 billion in annual economic impact

generated by South Dakota public universities.

From state’s investment of $197 million (FY16)
$162 million in sales and property tax.
5,628 full-time jobs at SD public universities.
21,950 jobs created in support of SD public

universities.

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Draws New and Expanded Business

New Industries & High Paying

Jobs

Educated Workforce
Supports Strong Families
Business Expertise
Research Partnerships

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Enhances Individual Wealth

Source: Measuring the Value of Education, US Bureau of Labor Statistics (2018). Retrieved from https://www.bls.gov/careeroutlook/2018/data-on-display/education-pays.htm. Note: Salary wage calculations based on median weekly earning data multiplied by 52 weeks, rounded to nearest thousand. Source: A.P. Carnevale, J. Strohl, and N. Ridley, Georgetown University Center on Education and the Workforce, Good Jobs that Pay Without a BA: A State-by-State Analysis (2017). Retrieved from https://goodjobsdata.org/wp-content/uploads/Good-Jobs-States.pdf.

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$27,000 $37,000 $40,000 $43,000 $61,000 $23,000 $29,000 $30,000 $35,000 $42,000

$0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 Less than HS Diploma HS Diploma, No College Some College, No Degree Associate Degree Bachelor's Degree

Median Annual Earnings By Education Level

National Median Annual Income State Median Annual Earnings Linear (National Median Annual Income) Linear (State Median Annual Earnings)

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Strengthening South Dakota:

Economic, Social, and Human Capital

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Source: Association of Public & Land-Grant Universities, How Do College Graduates Benefit Society at Large? (2016), available online from http://www.aplu.org/projects-and- initiatives/college-costs-tuition-and-financial-aid/publicuvalues/publicuvalues-resources/q4/GradsSociety.pdf. Philip Trostel, Lumina Foundation, It's Not Just the Money: the Benefits of College Education to Individuals and to Society (2015), available online from https://www.luminafoundation.org/files/resources/its-not-just-the-money.pdf.

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Board of Regents’ Goals

Student Success
Increase degree production

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Programs Fostering On-Time Completion

Reduce credit-hour graduation requirement from 128

to 120

‘15-to-Finish’ or ‘Finish in Four’ models
Exploratory Studies  reduce ‘catalog wandering’
Co-requisite remediation models
Redesign general education and transfer framework

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Dual Credit Enrollments

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855 1,510 1,743 2,408 2,625 1,203 1,514 1,945 2,599 255 283 325 346

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1,000 1,500 2,000 2,500 3,000 2014 2015 2016 2017 2018 Fall Headcount Spring Headcount Summer Headcount

HSDC Enrollments by Semester Type

Source: BOR Fact Book FY19

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Improving System Completion

5,599 5,858 6,355 6,174 6,354 6,617 6,487 6,664 5,000 5,200 5,400 5,600 5,800 6,000 6,200 6,400 6,600 6,800 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18

19% Increase in Total Graduates Since FY11

Total Graduates

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Source: BOR Fact Book FY19

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Source: Peace Bransberger and Demarée K. Michelau. Knocking at the College Door: Projections of High School Graduates, 9th

Edition. Boulder, CO: Western Interstate Commission for Higher Education, 2016.

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Projected Growth in High School Graduates 2019-2032

4% 1% 9% 59% 4% 13% 17% 0% 10% 20% 30% 40% 50% 60% 70% Iowa Minnesota Montana North Dakota Nebraska Wyoming South Dakota

Estimated SD HS Grads 2019: 8,522 SD HS Grads 2032: 10,000

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Math Pathways Project

Eliminate College Algebra as the default

general education math course.

Create a new general education course

in Quantitative Literacy for majors that do not require Algebra or Calculus.

Move students needing remediation into

corequisite courses – courses for credit with additional student support.

Failure to pass College Algebra is

ne of the top barriers to student completion.

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Board of Regents’ Goals

Academic Quality and Performance
Document that academic programs are of the highest quality.

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Responsive Academic Programming

Rigorous approval process for new programs
Initial Intent-to-Plan request
Formal program approval

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Campus Review

(Faculty, Departments, Committees, Industry Representatives)

Board Review & Approval System Review

(Board Staff, System Provosts/Presidents, Consultants)

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New and Terminated Programs

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Last 3 Years Added Terminated

Minors 32 8 Associate Degrees 12 8 Bachelor’s Degrees 22 22 Graduate Degrees 10 7

Examples of New Majors: Precision Agriculture, Data Science, Cyber Leadership & Intelligence, Biomedical Engineering

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Board of Regents’ Goals

Research and Economic Development
Increase annual research and contract expenditures

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Advance knowledge
Enhance technology transfer and

commercialization

Catalyze economic development

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Filling the Workforce Pipeline

Preparing South Dakotans for tomorrow’s workforce

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Source: BOR Fact Book 2018

1,733 1,088 1,279 567 537 581 458 369 269 FY 2018 Degrees from SD Public Universities

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Source: Regents’ Information Systems

958 1,030 1,036 1,086 1,100 1,279

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400 600 800 1,000 1,200 1,400

FY13 FY14 FY15 FY16 FY17 FY18

Undergraduate STEM Degrees

33% increase in STEM degrees since FY13

Filling the Workforce Pipeline: STEM Graduates

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Academic Programming for Workforce Development

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100 200 300 400 500 600 700

Agriculture & Related Business Management & Related Education & Teaching Nursing Engineering Accounting Computer & Information Systems Health Professions

Undergraduate Degrees in High Demand Fields

FY18 FY13

62% of all bachelor degrees were awarded in these fields in FY18

(an increase of more than 9% since FY13)

Source: Regents’ Information Systems

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Workforce Development: Where Do Graduates Go? 31% from out-of-state

remain in state 

71% from SD

remain in state

Top SD industries for graduates include:

Health Care and Social Assistance (29%)
Education (21%)
Finance & Insurance (6%)
Professional & Scientific Services (6%)

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Research is Job Development

FY18 job creation – Faculty research efforts (FTE): 655.9
Research innovations – FY07-FY18
Invention disclosures – 625
Patent and intellectual property protections filed – 292
Patents/licenses issued – 184

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Source: BOR system office

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Governor Research Centers

A Snapshot of Success

Centers funded: 17 Funding leverage: 6:1 Students trained: 1,149 Innovations disclosed: 176 Patent filings: 71 Patents issued: 17 License agreements: 25 30

$156,107,582 $96,980,153 $48,108,567 $21,625,239

Research Funding: $322,821,541

Federal Private RCC Other State

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Governor Research Centers and Economic Development

22 start-up companies affiliated with research centers have:
Created 208 jobs in South Dakota
Received 31 federal small business research (SBIR) awards, totaling

$8,129,759

Raised in excess of $23 million in private equity

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Broader Impacts of the Governor Research Centers on University Research

Baseline (FY05) FY18

$55.5M $107.6M

Research Awards in Millions of Dollars

44 26 12 21 11 3

10 20 30 40 50

Disclosures Patent Filings Licenses

Technology Transfer

FY18 Baseline (FY07)

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Research, Education and Economic Development Network (REED)

REED is a public, private

partnership

Last year, BOR requested

$3 million for north/south path upgrade of REED Network to 100G

Connects USD, SDSU, University

Center-SF, NSU, and DSU

Critical for research and to be part
f national 100G grid
No monies provided, but

appropriators supported need

Critical need required creative

funding from six sources:

$500,000 – GOED
$500,000 – Great Plains Foundation
$500,000 – BOR Research and

Development Innovation Grants Fund

$500,000 – USD, SDSU, and DSU

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Upgrading REED Network to 100G

100G connections are now

complete

BIT connection Pierre to Sioux

Falls

Aberdeen to Kansas City Great

Plains Network

Aberdeen to Omaha-Network

Nebraska

DSU, SDSU, and USD/Sioux

Falls

Work still to be completed
USD to be connected soon
100G links to Minnesota

(University of Minnesota)

100G from Minnesota (U of

Minn.) to Fargo

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Board of Regents’ Goals

Affordability and Accountability
Reduce tuition and fee ranking to regional average
Create and capitalize on efficiencies

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Focus on Efficiencies

Central electronic transcript processing center
System-wide student management system
Centralized management reports
System-wide electronic library system, with improved functionality
Continued focus on shared services:
Enterprise Resource Planning systems for students, human resources, finance & budget,

learning management

Centralized: Payroll, Accounts Payable, Purchasing, International Employment Office,

Export Controls 36

A continued focus on efficiency and effectiveness

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Funding Per Student Lowest in Region

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Source: SHEEO State Higher Education Finance (SHEF) Report, 2017

(Note: SHEF data adjusted for enrollment mix and cost of living, so numbers will differ from BOR Fact Book.)

Iowa Minnesota Montana Nebraska North Dakota South Dakota Wyoming Total Funding per FTE $18,950 $17,133 $15,281 $18,242 $16,872 $14,404 $26,837 Funding Per FTE - State $7,835 $7,871 $6,543 $8,959 $9,235 $6,364 $21,649 Funding Per FTE - Tuition $11,115 $9,262 $8,738 $9,283 $7,637 $8,040 $5,188 $18,950 $17,133 $15,281 $18,242 $16,872 $14,404 $26,837 $0 $2,500 $5,000 $7,500 $10,000 $12,500 $15,000 $17,500 $20,000 $22,500 $25,000 $27,500

FY17 Public Postsecondary Education Educational Appropriations and Net Tuition Revenue Per FTE

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State Support Impacts Affordability

FY15 and FY17 tuition freezes, supported by the Governor and

Legislature, improved affordability for South Dakota students.

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Source: BOR Fact Book FY 2019

State support of South Dakota public higher education increased from 41% to 44% over the past five years.

55% 52% 51% 47% 44% 41% 41% 43% 44% 44% 46% 44% 45% 48% 49% 53% 56% 59% 59% 57% 56% 56% 54% 56% 30% 35% 40% 45% 50% 55% 60% 65% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

General Student

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Measuring Our Progress

Ensuring Accountability and Transparency

Board of Regents’ Fact Book
www.sdbor.edu/mediapubs/factbook/index.htm
BOR Interactive Dashboards
www.sdbor.edu/dashboards
BOR Strategic Plan – 17 System Metrics
www.sdbor.edu/theboard/StrategicPlan
Presidential Evaluations

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Student Affordability – #1 Priority

Thank you for supporting tuition freezes in FY15 & FY17!

Tuition and Mandatory Fees Dollar Change Percent Change FY13* $7,675.62

$45.43
0.6%

FY14 $8,038.50 $362.88 4.7% FY15 $8,038.50 $0.00 0.0% FY16 $8,475.00 $436.50 5.4% FY17 $8,503.75 $28.75 0.3% FY18 $8,811.25 $307.50 3.6% FY19 $9,018.01 $206.76 2.3% *Net change, including reduction from 128 to 120 credit hours 40

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Affordability Measures Pay Off

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+ $1,987

Reduction from 128 to 120 credits

+ $1,490

Two fewer courses/ Exploratory Studies

+ $1,800

Three high school dual credit courses

Potential Savings of $5,277

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South Dakota Advantage

Non-resident students have many options for college.
South Dakota competes against resident rates in other states.
SD Advantage will help grow our revenues with

additional students enrolled.

An FY18 program for Iowa students, with

with rates equivalent to resident tuition rates in Iowa, has been very successful.

Implemented at four schools.

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South Dakota Advantage

Dec. 2018: BOR approved equivalent of in-state, undergraduate tuition rates at

public universities for new freshmen and new transfer students from:

Montana
North Dakota
Wyoming
Nebraska
Iowa
Colorado
In FY19, there were 154 freshmen and

new transfer students from these states.

Minnesota not part of this; SD already

has reciprocity agreement with that state.

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South Dakota Opportunity Scholarship

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2018-19 academic year: 4,062 recipients funded
Total of 17,298 recipients over the program’s lifetime

500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 Est 1,217 1,220 1,239 1,252 1,300 1,309 1,268 1319 2,432 2,533 2,606 2,577 2,575 1,960 2,794 2,825 New Recipients Continuing Recipients

3,649 3,753 3,845 3,829 4,062 3,269 3,875 4,144

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Post-Secondary Scholarship

Combined the Critical Teaching Needs Scholarship endowment and the Needs Based Scholarship

endowment to create one endowment addressing the tuition needs of students.

Scholarships available for Public, Private, and Technical institutions.
Endowment funds = $5 million
Scholarship funding available in FY19: $284,865
FY18 Scholarship Funds distributed $287,967

for Critical Teaching Needs and Needs Based scholarship support.

Critical Teaching Needs
Public Universities: $66,650
Private Universities: $17,200
Needs Based
Public Universities: $123,073
Private Universities: $24,730
Technical Institutes: $42,778
Tribal Colleges: $13,536

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Overview: BOR FY20 Budget Priorities

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Budget Priority: Salary Competitiveness

Faculty salaries in South Dakota trend below regional market.
Estimated $11.7 million needed to reach median faculty salaries in the region (College and

University Professional Association for Human Resources)

Lower compensation levels impact turnover and faculty recruitment.
149 faculty members, age 62 and above, currently eligible for full retirement.
Average time to fill faculty

appointments = 121 days.

Salary competitiveness request

(for faculty members only) equals 1.5 percent, or $3.1 million, to supplement the state’s regular salary package.

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LRC Budget Brief, page 13

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$17 $27 $562 $863 $1,081 $1,263 $2,109 $2,620 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 South Dakota Montana Nebraska Iowa North Dakota Colorado Minnesota Wyoming

In the Region: Need-Based Funding per Pell Recipient

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Budget Priority: Dakota’s Promise

SD stuck near bottom in need-based

scholarship support: only $229,000 available to award

Long-term strategy needed to support

students most at risk

Shared Responsibility framework factors

in financial contributions, then funds remaining unmet need

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Source: WICHE: States in the Drivers Seat

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Funding New Facilities and Major Renovations

HEFF and other student funds = $765 million
Grants and private fundraising

by presidents and foundations = $460 million

State funding = $80 million

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Summary of investment since 1997

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Funding University Maintenance & Repair: Academic Facilities

M&R investment goal is 2% of replacement values annually = $34.1 million

per year.

Higher Education Facilities Fund (HEFF) represents 11.5% of all tuition

dollars collected.

$15.8 million allocated to M&R for FY20
M&R fee of $3.34 per on-campus credit hour

generates $1.9 million.

General Funds M&R = $8,596,636
Currently at 1.76% of replacement value.

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Funding University Maintenance & Repair: Revenue Facilities

Includes all student unions,

wellness centers, and residence facilities.

Board of Regents requires

revenues cover 2% of M&R investment.

No commitment of state

dollars on these projects.

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Board Action since Last Year

n Maintenance and Repair
Each new building now required

to have funded M&R plan

Capital dollars will be returned to

campuses to fund new buildings

r M&R
Review replacement values with

Office of Risk Management

Revenues now considered part of

the HEFF allocation formula

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Overview: BOR System Request & Office of the Executive Director

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FY20 System Budget Adjustments

Utility funding
Decrease of $223,892
South Dakota Opportunity Scholarship
Increase of $41,839
Post-Secondary Scholarship
Increase of approximately $12,000; exact amount TBD
General Fund M&R
Increase of $3,746,133
Educational facility lease payment
Decrease of $4,873
Federal and Other Fund authority
Increase of $2,997,030
Research grants and contracts Federal and Other Fund authority
Increase of $1,350,000

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LRC Budget Brief, page 3-4

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System FTE Utilization

2097.5 2099.1 2141.3 2165.6 5,184.2 5,209.7 2387.8 2403.0 2417.3 2427.6 308.5 316.3 345.2 338.7 348.6 344.0 235.7 223.3 1000 2000 3000 4000 5000

FY15 FY16 FY17 FY18 FY19 Budgeted FY20 Requested

General Fund FTE Other Fund FTE Federal Fund FTE Unutilized FTE

Total FTE Utilized 4,793.8 Total FTE Utilized 4,818.4

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LRC Budget Brief, page 1

Total FTE Utilized 4,903.8 Total FTE Utilized 4,931.9

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Office of the Executive Director - Budget Detail

Central Office
Regents Library Consortium (RLC)
Regents Information Systems (RIS)
Enrollment Services Center (ESC)
Maintenance & Repair (M&R)
Scholarships
Grants

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Office of the Executive Director - Budgeted Fund Sources

Central Office $4,571,494 Enrollment Services Center $525,317 RIS $3,758,400 M&R $8,596,636 Scholarships $7,362,814 Grants $2,437,152

General Fund Operating Budget $27,251,813

Central Office $3,510,098 RIS $5,420,910 Regents Library Consortium $797,199 M&R $30,703,117 Scholarships $1,465,882 Grants $7,588,080

Other Fund Operating Budget $49,485,286

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Office of the Executive Director

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The Central Office provides system support in

these areas:

Academic Affairs
Audit
Finance and Administration
General Counsel
Government Relations
Human Resources
Institutional Research
Student Preparation
System Projects
Current vacancies
2 General Funded vacancies
Vacancy savings used for payouts
1 Other Funded vacancy
Funds will be redirected to institutional priorities
FTE Utilization
FY18 Budgeted FTE – 29.5; FY17 Budgeted FTE – 29.5
FY18 Utilized FTE - 27.2; FY17 Utilized FTE – 27.2
FY20 Budget Recommendation
Annual adjustment to Critical Deferred

Maintenance lease payment of ($4,873)

LRC Budget Brief, page 6-9

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Office of the Executive Director

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The Regents Library Consortium (RLC), formerly known as South Dakota

Library Network (SDLN), provides system-wide management of a hosted electronic library.

These services provide public universities, private universities, and technical

institutes access to electronic materials and the ability to borrow materials from other libraries.

RLC’s Other Fund budget is supported by member dues.
FTE Utilization
FY18 Budgeted FTE – 6.5; FY17 Budgeted FTE – 6.5
FY18 Utilized FTE – 1.75; FY17 Utilized FTE – 1.75
5.0 FTE reduction in Other Funded FTE requested in FY20

LRC Budget Brief, page 6-9

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Regents Information Systems (RIS)

RIS provides support to the universities and Central Office for all shared software and

hardware.

A portion of the RIS general fund budget is allocated to bandwidth and REED payments to the

Bureau of Information and Telecommunications; the remaining is used for personnel expenses.

The RIS Other Fund budget is funded from university technology fees and is used for system

software updates and licensing, maintenance, equipment, and personnel expenses.

Current Vacancies
1 General Funded Vacancy
Chief Network & Security Officer – recent retirement
1 Other Funded Vacancy
Security Officer – held opening due to restructuring of office
General and Other Fund vacancy savings used to support

additional staffing needs for the Student Banner Project.

FTE Utilization
FY18 Budgeted FTE – 27.0; FY17 Budgeted FTE – 27.0
FY18 Utilized FTE – 24.89; FY17 Utilized FTE – 24.89

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LRC Budget Brief, page 6-9

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Enrollment Services Center (ESC)

Enrollment Services Center processes all student applications

and financial aid verifications; provides other support work as requested by campuses.

FTE Utilization
FY18 Budgeted FTE – 7.3

FY17 Budgeted FTE 7.3

FY18 Utilized FTE – 6.99

FY17 Utilized FTE – 6.99

LRC Budget Brief, page 6-9

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Maintenance and Repair (M&R)

M&R funds protect $1.7 billion worth of facilities and a significant

infrastructure investment.

FY20 budget recommendation - $3,746,133
Funds 1.76 percent of replacement

value.

63 Fiscal Year Replacement Value M&R Allocated

% of Replacement Values FY14 $1,193,278,983 $18,590,650 1.6% FY15 $1,240,562,259 $20,068,760 1.6% FY16 $1,295,827,545 $22,808,604 1.8% FY17 $1,327,777,181 $26,543,348 2.0% FY18 $1,383,744,066 $26,023,707 1.9% FY19 $1,504,651,468 $26,491,071 1.76% FY20 $1,706,480,618 $30,237,204* 1.76%

* With $3,746,133 increase included.

LRC Budget Brief, page 6-9

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Scholarships and Grants

Scholarships

South Dakota Opportunity Scholarship – General

Funded

Post-Secondary Scholarship - Endowment
Veterinary Student Scholarship – General Funded
Jump Start Scholarship – Private Funds
Haines Scholarship – Private Funds
Bjustad Scholarship – Private Funds
Dakota Corps Scholarship – Private Funds

Grants

Competitive Research Grants
Research & Development Grants
Research Park Grants

FY20 Budget Recommendations

South Dakota Opportunity Scholarship – $41,839
Post-Secondary Scholarship – TBD, estimated +$12,000

LRC Budget Brief, page 12-14