1

Board of Governors and University Board of Trustees

Budget Workshop

August 6, 2008

2

2008-09 State Budget is $6 Billion 2008-09 State Budget is $6 Billion Less than 1 Year AgoLess than 1 Year Ago

General Government,

$5.0

Natural Resources,

Environment, Transportation,

$12.0

Criminal Justice, $5.0

Judicial, $0.4

Education, $21.0

Health & Human

Services, $23.0

32%

$66.4 Billion

3

Nat.

Resources,

Environ,

Trans. $0.3

Criminal

Justice, $4.0

General

Government,

$1.0

Education,

$14.0

Judicial, $0.4Health

Services,

$7.0

State Universities,

$2.4

Community Colleges,

$1.1

Early Learning,

$0.4

Public Schools, $9.5

Other, $0.9

State Operating Budget - $26 B

Education Operating Budget - $14 B

54%

17%

Education Receives 54% of the Education Receives 54% of the State Operating BudgetState Operating Budget

2008-09 General Revenue & Lottery

4

$33,257$30,157

$26,808 $27,916$30,267

$32,453

200

6-07

200

7-08

200

8-09

200

9-10

201

0-11

201

1-12

* This does not include additional reductions that will occur in the current or future years.Source: GR & Lottery Estimating Conferences

$6.4 B less than 06-07

Billion

Revenue Projections are not Revenue Projections are not Meeting ExpectationsMeeting Expectations

*

5

• 2008-09 operating revenues could decrease by $1 B +.

• Amendment 5 could be a $11 billion impact to the State.

• No new revenue streams are currently planned.

Short-term OutlookShort-term Outlook

6

$250

$460

$660

$450

$250

$330$280$290

200

4-05

200

5-06

200

6-07

200

7-08

200

8-09

200

9-10

201

0-11

201

1-12

Millions

PECO Projections will Return to PECO Projections will Return to Normal Levels of FundingNormal Levels of Funding

Over 100 facility projects funded.

7

SUS Operating Budget Overview

8

53.8%

Education & General (State

Funds)33%

Auxiliary11%

Contracts & Grants19%

Local Funds20%

Faculty Practice

7%

Education & General (Tuition)

10%

60% of the Funds are Restricted to Contracts & Grants, Auxiliaries, Local Funds & Faculty Practice..

$8.5 Billion

SUS 2007-2008 Operating BudgetSUS 2007-2008 Operating Budget

*

* Financial aid, student activities, athletics, concessions

9

Students Contribute about 30% of Students Contribute about 30% of Education & General Funding Education & General Funding

$1.0

$1.5

$2.0

$2.5

$3.0

2004-05 2005-06 2006-07 2007-08 2008-09

Billion

s

State Funds Tuition

30%

70%

33%

67%

Bright Futures pays a portion of tuition, thus the State share becomes 80%.

10

Education & General Education & General Expenditures by Activity, Expenditures by Activity,

2006-20072006-2007

Institutes & Centers, $98

Museums/Radio/TV, $23 Clinics, $18

Extension, $42Admin. & Support, $338

Student Svcs., $177

PO&M, $307

Libraries, $125

Inst. & Research., $1,920

Millions

11

$10,000

$11,000

$12,000

$13,000

$14,000

$15,000

$16,000

$17,0001

989-

90

199

1-92

199

3-94

199

5-96

199

7-98

199

9-00

200

1-02

200

3-04

200

5-06

200

7-08

200

8-09

E&G Funding Per FTE StudentE&G Funding Per FTE Student

E&G includes state funds and tuition. Adjusted by the Higher Education Price Index.

10% decline since 2006-07.

12

Florida’s Per FTE Student Funding Florida’s Per FTE Student Funding Ranks 10Ranks 10thth Among Southeastern Among Southeastern

StatesStates

$0

$5,000

$10,000

$15,000

$20,000

$25,000D

elaw

are

Mar

ylan

d

S. C

arol

ina

N. C

arol

ina

Ken

tuck

y

Mis

siss

ippi

Vir

gini

a

Ala

bam

a

Texa

s

Flor

ida

Ark

ansa

s

Tenn

esse

e

Geo

rgia

Okl

ahom

a

W. V

irgi

nia

Loui

sian

a

State Funds Tuition

SREB 2006-07 data.

13

Florida’s Per FTE Student Funding Florida’s Per FTE Student Funding Ranks 40Ranks 40thth Nationally Nationally

$0

$5,000

$10,000

$15,000

$20,000

$25,000

Appropriations TuitionIPEDS 2006-07 data

14

Florida Graduation Rates are High Florida Graduation Rates are High Compared to FundingCompared to Funding

Graduation Rate %, (00-

06)Delaware 68.8Virginia 66.5Maryland 63.1South Carolina 59.4

Florida 59.1North Carolina 59.1Texas 49.9Mississippi 49.7Georgia 48.1Alabama 47.7Tennessee 45.0Oklahoma 43.6West Virginia 41.6Kentucky 40.6Arkansas 39.2Louisiana 37.2SREB states 51.1US Avg 51.2

Notes:

Data from the National Center of Education Statistics graduation rate survey, bachelor's or equivalent degree/certificate-seeking subcohort (4-year institutions), adjusted cohort, completers of bachelor's or equivalent degrees in 4 years or less, in 5 years, and in 6 years.

15

Educated States Have Higher Educated States Have Higher IncomeIncome

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

10% 15% 20% 25% 30% 35% 40% 45%

Percentage of 18+ Population with a Bachelor's Degree or Higher

Per

Cap

ita

Inco

me

MS

WV

MA

CT

MDNJ

CO

VANH

NY

VT

MT

MN

WA

AR

RI

CA

IL

HI

ID NM

IN NEME

GA

M

NCOHSDTXMOIA

KSWY MI

AZNV

LA

ORPA

WI

UT

AK

FLDE

SCTN

KY

ALOK

DC

Income and Educational Attainment Are Highly Correlated

16

Strategic Plan – Focused on Strategic Plan – Focused on Increasing Degree ProductionIncreasing Degree Production

Actual 2006-07

2012-13 Original

Strategic Plan Goal

06-07 to 12-13 Annual

Growth Rate to Reach Goal

Bachelor 47,326 57,638 3.4%

Masters 13,786 17,514 3.3%

Professional 1,841 2,167 5.2%

17

2009-10 Budget

18

Budget TimelineBudget Timeline

• August - Board approves operating budget

• September – Board approves fixed capital outlay budget

• October – Budgets submitted to Governor & Legislature

• February – Governor’s budget released

• March – Legislative session begins

19

“The outlook we anticipate for the next budget year, the ’09 session, is expected to look very similar to the ’08 session. We’ll have to make more reductions in certain places and look at new ways to fund our priorities.”

Rep. Ray Sansom (May 12, 2008; Tallahassee

Democrat)

• 2007-08 Reductions - $114 M

• 2008-09 Initial Reductions - $60 M

• 2008-09 Potential Add’l Reductions (4%) - $96 M

State Funding ReductionsState Funding Reductions

20

Increase in the Core E&G Budget of 5.27%Increase in the Core E&G Budget of 5.27%

2008-09 Budget $2,984,104,675

Student Success $91,396,527

Shared Resources $7,622,500

Campus Infrastructure

$78,164,711

Total 2009-10 Budget $3,141,475,904

% Increase 5.27%

21

• Student Safety

• Student Access

• A Quality Faculty Cohort

3 Keys to Student Success3 Keys to Student Success

22

Student Safety - $14.6 MStudent Safety - $14.6 M

• Emergency Notification Systems– Sirens, speakers, signage

• Police Staffing – Improve student /

police ratio

23

• Preserve 2 + 2 system.

• 27,000 CC students enroll

each year.

• 25% of undergraduate students enrolled in SUS from CCs.

Student Access for Community College Student Access for Community College Transfers - $20 MTransfers - $20 M

24

A Quality Faculty Cohort

Adequacy:

• Worst Student/Faculty ratio in the nation.

• Low % of tenured/tenure-earning faculty compared to other states.

• A growing dependency on contingent faculty.

25

25

31.1

0

5

10

15

20

25

30

35

HI

WY

VT

NE IA NJ

CT

KY

SC

TN KS

MS

AK

NM RI

DE

NC

MT

MO

VA IL

MN MI

PA

OH ID ME

ND

WA

MA

WI

US

NY

MD

WV

AL

AR IN CO AZ

GA

SD

NH TX

OK

OR

UT

LA

NV

CA FL

Source: USDOE Integrated Postsecondary Education Data System, 2005-06 FTE Students per fall 2005 full-time tenured/tenure-track faculty member, four-year public baccalaureate and higher institutions

Florida – The Most Efficient or Florida – The Most Efficient or the Worst Student/Faculty Ratio the Worst Student/Faculty Ratio

in the U.S.? in the U.S.?

26

Enrollment in Large Classes Increased by Almost 50%

Enrollment Growth by Section Size, 2000-2007

23% 20%29%

49% 47%

28%

-9%

1-9 10-19 20-49 50-99 100-199 200+ Total

# of Students in Section

FTE E

nrol

lmen

t G

row

th, f

all 2

000-

2007

27

A Quality Faculty Cohort

Quality:

• Recruitment, development and retention of the best faculty.

• National Academy Members, faculty awards, and

national/international rankings of Florida’s universities.

• Continuing stagnancy or attrition will result in irretrievably lost opportunities, along with diminishing economic investment and growth.

28

Stemming the Faculty Brain Drain - $65.4 Stemming the Faculty Brain Drain - $65.4 M M

• The state has provided funding for 2 raises in the last 5 years.

• Out-of-state institutions raiding Florida faculty.

• $161,000 in total research per faculty; higher than most in the U.S.

“The cuts certainly made leaving Florida easier, and they are definitely going to diminish the competitiveness of Florida on the job market.” UF Faculty Quote

29

Stemming the Faculty Brain Drain Stemming the Faculty Brain Drain

Potential Solutions:

• Investing in human capital.

• Matching the competition.

• Rebuilding a culture of confidence regarding higher education in Florida.

30

Stimulating the Faculty Brain Gain Stimulating the Faculty Brain Gain

• The SUS will need to add 1,600 more faculty members just to reach the average student/faculty ratio.

• Without addressing both the faculty Brain Drain and Brain Gain now, we will witness a student brain drain, diminishing educational access and quality, declining retention and degree completion rates, along with an outflow of federal and private investment and diminishing economic growth.

31

Shared System ResourcesShared System Resources

• Florida Center for Library Automation - $5.9 Mo Purchase of scholarly resources.

• University Press of Florida - $.5 Mo Publishing scholarly books in arts, humanities, social sciences, etc.

• Florida Initiative on Global Education - $1.2 Mo Scholarships to study abroad for First Generation Students.

32

Other Budget InitiativesOther Budget Initiatives

• Utility Increases 20% +

• Medical Education• UCF / FIU Medical Schools

• Year 3 – Initial Class of Students

• UF / USF Medical Schools• Base Funding

• Public / Private Partnership - Major Gift Matching Program - $102 M

33

$10,000

$11,000

$12,000

$13,000

$14,000

$15,000

$16,000

$17,0001

989-

90

199

1-92

199

3-94

199

5-96

199

7-98

199

9-00

200

1-02

200

3-04

200

5-06

200

6-07

200

8-09

200

9-10

Total E&G Funding Per Total E&G Funding Per FTE Student will Increase SlightlyFTE Student will Increase Slightly

1.4% increase in funding per FTE Student.