STRONGER BY DEGREES Presentation to the Council of Senate Faculty - - PowerPoint PPT Presentation

Presentation to the Council of Senate Faculty Leaders (COSFL) By Scott Boelscher and Shaun McKiernan March 7, 2014

Making Kentucky

STRONGER BY DEGREES

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Historical Overview

Postsecondary Education Budget

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Declining Share of State Budgets

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15.3% 15.6% 15.0% 15.8% 15.6% 15.8% 15.4% 15.3% 14.8% 14.7% 13.8% 13.6% 14.0% 13.1% 12.4% 12.0% 11.5% 11.7% 10% 11% 12% 13% 14% 15% 16% 17% 18% FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

Kentucky Budget of the Commonwealth Postsecondary Education's S hare of Total S tate General Fund Budget

Fiscal Years 1999 - 2016

P ercent

Source: Kentucky Enacted and Proposed Budgetsof the Commonwealth.

Governor's Proposed Budget (HB 235)

Historical Overview, Postsecondary Education Budget

General Fund Reductions

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$8,513 $8,258 $7,630 $7,096 $6,707 $6,299 $6,054 $5,990 $5,801 $5,709 $255 $883 $1,417 $1,806 $2,214 $2,459 $2,523 $2,712 $2,804 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000

FY08 Enacted FY08 Final FY09 Final FY10 Final FY11 Final FY12 Final FY13 Final FY14 Enacted FY15 Proposed FY16 Proposed

Net General Fund Appropriations per FTE Student Loss per Student FY08 to FY16

Kentucky Public Postsecondary System Inflation-Adjusted Net General Fund Appropriations per FTE Student

Fiscal Years 2008 - 2016 proposed

Dollars

(per

Constant FY16 Dollars (est)

Sources: Kentucky Budget of the Commonwealth; CPE Comprehensive Database; Commonfund Institute, Higher Education Price Index

Additional $443 M Needed to Maintain FY08 Funding Level

Assumes flat enrollment growth for FY15 and FY16 and 1.6% inflation for FY14, FY15, and FY16

Historical Overview, Postsecondary Education Budget

Tuition Increases Have Slowed

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6-Year AAGR 6-Year AAGR 2002 - 2008 2008 - 2014 Research Sector 10.6% 6.1% Comprehensive Sector 12.9% 5.2% Two-Year College Sector 15.5% 3.8% Postsecondary System 12.4% 5.4%

AAGR - Average Annual Growth Rate. Source: Council on Postsecondary Education, Comprehensive Database.

Kentucky Public Postsecondary Sectors and System Average Yearly Increases in Resident Undergraduate Tuition and Fees Academic Years 2002 - 2008 and 2008 - 2014

56% Decrease in Average Yearly Increases FY08 - FY14

Historical Overview, Postsecondary Education Budget

Fixed Costs Exceed Tuition

6 Historical Overview, Postsecondary Education Budget

$23.1 $44.2 $32.3 $14.7 $8.4 $14.7 $15.5 $9.7 $18.7

$63.5 M Shortfall

(@ 3% Increase)

Kentucky Public Postsecondary System Potential Budgetary Impact of Proposed General Fund Reduction and Fixed Cost Increases

Fiscal Year 2014-15

* Estimated increase in gross billable tuition and fee revenue at assumed 3%, 4%, and 5% rate increases across all categories of students (i.e., every academic level, residency, and full-time/part-time status).

$107.7 Fixed Cost Increases & Proposed Budget Reduction Increase in Gross Tuition & Fee Revenue @ Various Rate Increases *

Institutional Financial Aid KERS Rate Increases Health Insurance Maintenance & Operations Other Fixed Costs Proposed 2.5% GF Reduction

Source: Public postsecondary institution, chief budget officer estimates.

$48.8 M Shortfall

(@ 4% Increase)

$34.1 M Shortfall

(@ 5% Increase)

Estimated Operating Budget Shortfall

(Dollars in Millions)

Public Funds Revenue Decline

7 $8,120 $7,877 $7,278 $6,769 $6,397 $6,009 $5,775 $7,882 $7,882 $8,290 $8,479 $8,671 $8,984 $9,515 45,904 54,159

• 10,000

20,000 30,000 40,000 50,000 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000

FY08 Enacted FY08 Final FY09 Final FY10 Final FY11 Final FY12 Final FY13 Final

Net General Fund per FTE Tuition Revenue per FTE Degrees & Completions Dollars Degrees

Kentucky Public Postsecondary System Inflation-Adjusted Net General Fund and Gross Tuition Revenue per FTE Student

Fiscal Years 2008 - 2013

$16,002 $15,290 (Constant 2013 Dollars) Historical Overview, Postsecondary Education Budget

Shared Benefits and Responsibility

67% 66% 66% 64% 61% 58% 54% 53% 51% 50% 47% 44% 43% 40% 38% 36% 34% 32% 30% 28% 26% 25% 33% 34% 34% 37% 39% 42% 46% 47% 49% 53% 56% 58% 60% 62% 65% 66% 68% 70% 72% 74% 75% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20

State Share of Total Public Funds Student Share of Total Public Funds

Kentucky Public Postsecondary System Change in State & Student Shares of Total Public Funds

Fiscal Years 1999 - 2020

Percent

Sources: Kentucky Budget of the Commonwealth; CPE

(Projected)

State Share = Net General Fund Appropriations ÷ Total Public Funds Student Share = Gross Tuition & Fee Revenue ÷ Total Public Funds

8 Historical Overview, Postsecondary Education Budget

2014-16 Budget

CPE Request vs. Governor’s Proposed

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Institutional Operating Funds

(Dollars in millions)

FY 15 FY 16 Funding Category CPE Req.

• Gov. Rec.

CPE Req.

• Gov. Rec.

College & Career Readiness

$19.2 $0.0 $19.2 $0.0

Research & Economic Development

12.0 0.0 12.0 0.0

Performance Funding

18.0 0.0 36.0 0.0

Land Grant Mission Funds

1.4 0.0 2.8 0.0

Kentucky Adult Learner Initiative

2.4 1.9 2.4 1.9

Total

$53.3 $1.9 $72.4 $1.9 Percent Change on FY14 ($916.0 M) base 5.8% 0.2% 7.9% 0.2%

10 2014-16 Budget, CPE Request vs. Governor’s Proposed

Institutional Operating Funds

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Governor’s Budget includes:

• Base Reduction of 2.5% in FY15 ($23.1M), with no

increase in FY16

• Funds 50% of the KERS Rate Increases, $8.4 M each year
• Funding for Gatton Academy at WKU, $2 M in FY16

2014-16 Budget, CPE Request vs. Governor’s Proposed

Strategic Investment Trust Funds

(Dollars in millions)

Funding Category/Institution CPE Request

• Gov. Rec.

Bucks for Brains University of Kentucky

$50.0 $33.3

University of Louisville

25.0 16.7

Comprehensive Universities

15.0 10.0

Workforce Development Match

KCTCS 5.0 0.0 Trust Fund Total $95.0 $60.0

12 2014-16 Budget, CPE Request vs. Governor’s Proposed

Capital

(Dollars in millions)

GF Bond Fund Projects CPE Req.

• Gov. Rec.

Asset Preservation $320.0 $274.7 New/Expanded Space 280.0 245.7 Information Technology 60.0 1.2 Total $660.0 $521.5 Agency Bond Authority* $814.7

*CPE did not endorse a specific level of Agency Bond Authority

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CPE advocated for Asset Preservation, New/Expanded Construction, and IT pools in its budget request. The Governor’s Recommended Budget lists specific projects. The IT funding is for one project, Commonwealth College Web Portal.

2014-16 Budget, CPE Request vs. Governor’s Proposed

Making Kentucky

STRONGER BY DEGREES

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Presentation to the Council of Senate Faculty Leaders (COSFL) By Scott Boelscher and Shaun McKiernan March 7, 2014