University Senate, November 9, 2015 October 26, 2015 Meeting Minutes Attachment B Power Point Slides and Notes: University Budget Explained: Reality and Priorities General Budget Overview I. Education & General Budget – What has changed ? II. Staffing, Faculty Compensation and Employee Benefits III. Reserves – How much and why ? IV. Questions V. 2 The presentation is primarily: Oxford Based Faculty Focused 6 22 of 49
University Senate, November 9, 2015 October 26, 2015 Meeting Minutes Attachment B Power Point Slides and Notes: University Budget Explained: Reality and Priorities Miami University - Oxford Campus Why are there three distinct budgets? Auxiliary $156.6M 22% Restricted E&G $48.3M Unrestricted 7% $491.4M 71% E&G includes unrestricted and designated funds. * Legislative, grantor, and donor limitations restrict movements across categories. 1) An example of an auxiliary is Housing and Dining • Generates own revenue • Operates within that budget 2) Restricted funds are sponsored funds, grants, gifts, endowments; these funds have stipulations on them. 3) E & G Unrestricted is the Education and General Budget • No stipulation by donor or external agencies 7 23 of 49
University Senate, November 9, 2015 October 26, 2015 Meeting Minutes Attachment B Power Point Slides and Notes: University Budget Explained: Reality and Priorities FY 2016 Oxford Total Expenditure Budget = $666,774,290 How is the budget allocated across the major university functions? Student Services, Institutional IT $23.0M Support, $50.3M $15.4M- 2% 3% 8% Other General Fee Transfers $13.4M- 2% Instruction and Other Academic Debt Service, Activities $48.1M- 7% $249.7M 38% Plant O&M, $31.,3M- 5% TOTAL ACADEMIC/STUDENT $368M 55% Auxiliaries, $139.8M 21% Scholarships & [ICA = 26.5M, Fellowships, 4% of total budget] $95.7M 14% Institutional Support (8% of expenditures): includes services that support the academic mission, but are not involved in the direct delivery of the mission, e.g. Accounting, Police, Human Resources, Provost’s central office Intercollegiate Athletics (ICA) Budget (4% of expenditures): Only 2% of expenditures for the sports programs are provided by the University because ICA supports the rest their expenditures. Other academic activities include the Library, Graduate School, center and institutes, International Program Office, MUDEC administration,etc. FY2016 Expenditure Budget Oxford Campus Auxiliary Operations How much is spent on Intercollegiate Sports? Millions $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 Armstrong Student Center Aviation Services General Fee Millett Hall-Student Facilities Scholarships and Student Support Services Funded by General Fee (advising, etc.) Marcum Conference Center Auxiliary Funded Activities Student Health Service Transportation Services Goggin Ice Center Recreational Sports Center Intercollegiate Athletics Shriver Center Residence & Dining Halls 7 8 24 of 49
University Senate, November 9, 2015 October 26, 2015 Meeting Minutes Attachment B Power Point Slides and Notes: University Budget Explained: Reality and Priorities FY2016 OXFORD E&G BUDGET BY EXPENSE CATEGORY (Excludes scholarships, fellowships waivers & general fee) How is the Unrestricted E&G budget spent? Debt & Other Transfers $14.6M 4% Support Costs $68.5M 21% *Greatest Expense Category is Personnel NB: Every 1% growth in salary = $2.5 Million What has Changed? 9 25 of 49
University Senate, November 9, 2015 October 26, 2015 Meeting Minutes Attachment B Power Point Slides and Notes: University Budget Explained: Reality and Priorities FY2016 E&G Unrestricted Revenue Budget A ppropriations $61.0M 12% Other Designated $15.5M 3% Tuition & Sales, Grants & Fees Contracts $402.3M $4.1M 82% 1% I nvestment, Endowment & Gifts $8.5M 2% *Unrestricted E&G includes designated funds. NB: All of “Tuition & Fees” and most of the Appropriations portion of the revenue budget is enrollment dependent. This results in 93% of MU’s revenue budget being enrollment dependent. **** MU is in the top 5 among public universities nationally that are dependent on enrollment and tuition for support. Trends in State Appropriations (SSI) (SSI not adjusted for inflation: SSI annual rate of growth 0.75%; CPI rate of growth 2.3%; HEPI rate of growth 3.2%) $120,000,000 HEPI $100,000,000 CPI $80,000,000 $60,000,000 $40,000,000 $20,000,000 $0 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 SSI SSI @ CPI SSI @ HEPI Over the last 25 years growth in state support (appropriations) has been almost nonexistent, while at the same time, price indices have continued to rise. CPI – Consumer Price Index HEPI – Higher Education Price Index 10 26 of 49
University Senate, November 9, 2015 October 26, 2015 Meeting Minutes Attachment B Power Point Slides and Notes: University Budget Explained: Reality and Priorities Undergraduate Resident Tuition Trend 16,000 18.7% increase from 2006-2016 14,233 Annualized rate of 1.76% 14,000 CPI was 1.79% 11,994 12,000 10,000 137.9% increase from 1996-2006 Annualized rate of 9.0% 8,000 CPI was 2.5%. 6,000 5,058 4,000 2,000 0 Fall 1996 Fall 2006 Fall 2016 Largest tuition increases occurred between 1996 and 2006 12 Significant growth in resident tuition once more than adequately replaced state support but not in the last decade. With increasing emphasis on affordability means our ability to raise tuition is more controlled and limited, e.g. the state has frozen tuition for 2015-16 and 2016-17. Fall 1996 – Fall 2006: 137.9% overall increase in tuition. Fall 2006 – Fall 2016: only 18.7% overall increase in tuition. Trends in Oxford 1st Time Enrollment by Residency 4,500 30.0 With Average ACT Score 29.0 4,000 28.0 3,500 Cohort Average ACT Score 27.0 3,000 Cohort Enrollment 26.0 2,500 25.0 2,000 24.0 1,500 23.0 1,000 22.0 500 21.0 - 20.0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Cohort Year OSU ACT In State Out of State ACE MU ACT pre 2006 MU ACT 2006 to present Enrollment growth has been the primary source of new revenue growth over the last five years but is this sustainable? Note: Blue portion of the bars represents the number of in-state students Orange section of the bars represents the number of out-of-state students 11 27 of 49
University Senate, November 9, 2015 October 26, 2015 Meeting Minutes Attachment B Power Point Slides and Notes: University Budget Explained: Reality and Priorities Green portion of the bars represents the number of students in the ACE (American Culture and English) Program. Trends in Undergraduate Financial Aid Budget (Not adjusted for inflation) 80,000,000 Financial Aid increased by ~400% 70,000,000 while tuition rose by less than 19% 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 - FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 14 Complex financial aid strategies are enabling more academically talented students to be enrolled but at a much larger share of the budget. Trends in Undergraduate Financial Aid Budget (Not adjusted for inflation) 80,000,000 $ 1.59B Financial Aid increased by ~400% 70,000,000 while tuition rose by less than 19% 60,000,000 Endowment needed to offset the cost of financial aid 50,000,000 $ 613M 40,000,000 30,000,000 20,000,000 $ 352M 10,000,000 - FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 15 Distribution from endowments is about 4.5%. Therefore, it would require a $1.5 Billion endowment to distribute $70 Million in financial aid. 12 28 of 49
University Senate, November 9, 2015 October 26, 2015 Meeting Minutes Attachment B Power Point Slides and Notes: University Budget Explained: Reality and Priorities Trend in Allocation of E&G Budget (Net of Scholarships) $400,000,000 $350,000,000 $300,000,000 $135.1M $210.2M $250,000,000 $202.2M 40.5 % 57.6 % 57.7 % $200,000,000 $150,000,000 $198.6M $100,000,000 $154.5M $148.5M 59.5 % 42.4 % $50,000,000 42.3 % $- FY2007 FY2015 FY2016 Other Divisions and Unallocated Revenues Academic Colleges and Schools 16 RCM is leading to more resources being assigned to colleges and schools. However, the colleges and schools face greater volatility in funding as well as added funding responsibilities for classroom and building projects. Long Range Budget Forecast (Revenue Net of Scholarships) Assumptions $440,000,000 • Classes of 3650, 44% non-resident $420,000,000 • 300 American Culture and English Program • Resident tuition frozen through $400,000,000 FY17, then 1.75 inflationary increases $380,000,000 • SSI grows 4% in FY16 & FY17, no growth in FY18, then 0.75% increases $360,000,000 • Financial aid at FY16 discount rate with added investment for $340,000,000 diversity thought FY19 • 3% Salary increment pool • Benefits grow no more than $320,000,000 salaries • Increases for new faculty lines, per credit hour rate, and market $300,000,000 adjustment FY16 FY18 FY20 FY22 FY24 FY26 Revenue Expense While revenues are exceeding expenses today, this quickly evaporates once the growth in enrollment ends. The assumptions that are made in our long range budget forecast are as listed. 13 29 of 49
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