Higher Education - Budget Briefing FY 2011-12 · LSSU UMF UMD SVSU NMU MTU FSU OU GVSU EMU CMU WMU...

Background Briefing

HIGHER EDUCATION

Kyle I. Jen, Deputy Director

December 2011

The fiscal information in this background briefing is based on data through December 31, 2011.

House Fiscal Agency: December 2011 2

Higher Education

Article VIII of the State Constitution:

Section 4: Requires Legislature to appropriate funds to maintain Michigan’s 15 public universities.

Section 5: Provides for elected boards of control for University of Michigan, Michigan State, and Wayne State.

Section 6: Provides for appointed boards of control for remaining universities. Sections 5 and 6: Grants each university board control and direction of all

expenditures from institution’s funds.

Beginning in FY 2011-12, the Higher Education budget is included in the compiled School Aid Act, rather than a standard one-year budget bill.

Higher Education: Gross AppropriationsFY 2011-12 Higher Education appropriations are $480.7 million lowerthan they were in FY 2002-03 (26.1 percent, not adjusting for inflation).

Note: Delayed payments in 2004 and 2007 shown in original year funds

were appropriated.$1,845

$1,697 $1,680 $1,734 $1,749 $1,748 $1,754

$1,612 $1,578

$1,364

FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Mill

ions

Gross

GF/GP

3House Fiscal Agency: December 2011

Higher Education Share of State GF/GP

FY 2011-12 GF/GP Total = $8,626,998,900

Community Health$2,961,974,600

34.3%

Corrections$1,874,836,200

21.7%

Higher Education$1,065,632,500

12.4%

Community Colleges

$88,000,000 1.0%

Human Services$1,024,639,400

11.9%

Other$964,156,100

11.2%

Debt Service$382,284,100

4.4%

State Police$265,476,000

3.1%

Higher Education makes up 12.4% of the total state GF/GP budget


Higher Education Share of School Aid Fund

School Aid$10,887,098,700

96.5% Higher Education$200,019,500

1.8%

Community Colleges

$195,880,500 1.7%

House Fiscal Agency: December 2011 5

The Higher Education budget receives 1.8% of the total state School Aid Fund (SAF)

FY 2011-12 SAF Total = $11,282,998,700

SOURCES OF FUNDING

Higher Education Funding Sources

State Restricted$200,219,500

14.7%

State GF/GP$1,065,632,500

78.1%

Federal$98,326,400

7.2%

FY 2011-12 Higher Education Budget = $1,364,178,400

In FY 2011-12, School Aid Fund revenue is being utilized to replace$200.0 million in GF/GP funding for public universities. Federal TANF funds

have replaced state funds for major financial aid programs.


HIGHER EDUCATIONAPPROPRIATIONS

Higher Education Appropriations

The Higher Education budget contains:

• Operational support to the state’s 15 public universities

• Support for the Agricultural Experiment Station and Cooperative Extension Service operated by Michigan State University

• Funding for financial aid programs for students attending either public or private colleges/universities in Michigan

• Funding for various smaller higher education-related budget items

All but 7.5% of FY 2009-10 Higher Education funding is appropriated to the 15 public universities for operations or other purposes (Ag Experiment/Extension).


Higher Education Appropriations

FY 2011-12 Higher Education Budget = $1,364,178,400


University Operations$1,207,234,700

88.5%

Financial Aid$99,526,400

7.3% Ag Experiment/ Coop Extension

$52,625,800 3.9%

Other$2,891,500

0.2%

One-Time Funding$1,900,000

0.1%

MAJOR BUDGET ISSUES

Public Universities

University Abbreviation FoundedCentral Michigan University CMU 1892Eastern Michigan University EMU 1849Ferris State University FSU 1884Grand Valley State University GVSU 1960Lake Superior State University LSSU 1946Michigan State University MSU 1855Michigan Tech. University MTU 1885Northern Michigan University NMU 1899Oakland University OU 1957Saginaw Valley State University SVSU 1963University of Michigan – Ann Arbor UMAA 1817University of Michigan – Dearborn UMD 1959University of Michigan – Flint UMF 1956Wayne State University WSU 1868Western Michigan University WMU 1903


FY 2011-12 University Operations Grants

$10.8 $17.8 $21.0 $23.6$38.4 $40.7 $41.3 $43.1

$52.7$64.6 $68.1

$93.2

$182.0

$241.1

$268.8

LSSU UMF UMD SVSU NMU MTU FSU OU GVSU EMU CMU WMU WSU MSU UMAA

Mill

ions

Appropriations to Michigan State, UM-Ann Arbor,and Wayne State make up 57.3% of total stateoperational support to the 15 public universities.


University Operations Funding

No constitutional or statutory provisions exist to govern distribution of funding to public universities. Decisions made on a year-to-year basis by the Legislature.

Appropriations often calculated on a per-student basis to control for varying enrollments of universities. Calculation based on fiscal year equated students (FYES):– FYES = credit hours divided by 30 (at undergraduate level)– Calculation usually made using total FYES (undergraduates + graduates;

residents + nonresidents)

Methods used over last decade to determine funding changes have included:– Across-the-board adjustments– Per-FYES funding floor– Allocations based on various activity/outcome measures: enrollment, degree

completions, research funds, Pell Grant recipients

FY 2011-12 budget act includes language stating legislative intent to allocate university operations funding using a performance incentive formula (yet to be developed) beginning in FY 2012-13.


University Appropriations per Student

FY 2011-12 appropriations per FY 2010-11 FYES vary from $2,351 to $7,341.

$0

$1,500

$3,000

$4,500

$6,000

$7,500

GVSU SVSU UMF OU CMU UMD FSU EMU WMU NMU LSSU MSU MTU UMAA WSU


Historical University Appropriations per StudentTotal FY 2011-12 university appropriations per FYES are 33.4 percent lower than they were in FY 2000-01―or 48.6 percent lower on an inflation-adjusted basis.

$0

$2,000

$4,000

$6,000

$8,000

FY 1987

FY 1988

FY 1989

FY 1990

FY 1991

FY 1992

FY 1993

FY 1994

FY 1995

FY 1996

FY 1997

FY 1998

FY 1999

FY 2000

FY 2001

FY 2002

FY 2003

FY 2004

FY 2005

FY 2006

FY 2007

FY 2008

FY 2009

FY 2010

FY 2011

FY 2012

Nominal CPI-Adjusted


Tuition Restraint Incentive

FY 2011-12 budget adjustments for university operations:– 15.0% across-the-board reduction ($213.1 million)– From remaining amounts, between 5.1% and 9.8% of each

university’s appropriation (based on average tuition increase over previous 5 years) was made contingency on compliance with tuition restraint provisions ($83.0 million total)

Tuition restraint provisions (resident undergraduate rates only):– Universities could not raise tuition for FY 2010-11 after February

1, 2011– Universities had to limit tuition increases for FY 2011-12 to 7.1%

(statewide 5-year average)

State budget director determined that all 15 universities complied with requirements and will receive tuition restraint incentive funds. In two cases (MSU/WSU), tuition increases were calculated based on higher summer semester rates in FY 2010-11.


Ag Experiment and Extension

An appropriation of $52.6 million GF/GP is made to Michigan State University to operate two statewide programs:

Agricultural Experiment StationAgriculture research program operated by MSU at 14 facilities across state.

Cooperative Extension ServiceProgram jointly funded by counties to extend MSU’s public service mission across state in a variety of program areas:– Agriculture and Natural Resources– Children, Youth, and Family (including 4-H)– Community Economic Development

Additional funding is received by Michigan State for these programs from federal, private, and local sources.


Financial Aid Programs

Tuition GrantsNeed-based awards to students attending independent colleges ($1,512 maximum award for FY 2011-12; $3.0 million cap for Baker College and Davenport University).

State Competitive ScholarshipsAwards to students with both qualifying ACT score and financial need ($575 maximum award for FY 2011-12).

Tuition Incentive ProgramPayment of associate’s degree tuition costs and up to $2,000 for bachelor’s degree for students eligible for Medicaid in middle/high school.

Project GEAR UPFederally-funded awards targeted to students in urban school districts.

Robert C. Byrd Honors Scholarship ProgramFederally-funded awards to outstanding high school graduates.

Children of Veterans Tuition Grant and Officer’s Survivor Tuition ProgramsGrants to (1) children of deceased or disabled veterans and (2) children of police officers and firefighters killed in the line of duty.

In recent years, federal Temporary Assistance to Needy Families (TANF) funding has been used in place of state funding for financial aid as part of TANF maintenance-of-effort plan.


Financial Aid Funding

Other$4,200,000

4.2%Tuition Incentive

Program$43,800,000

44.0%

Tuition Grants$31,664,700

31.8%

State Competitive Scholarships$19,861,700

20.0%

FY 2011-12 Total = $99,526,400


Changes in State-Funded Financial Aid by Category

$0

$50

$100

$150

$200

$250

$300

FY 1

997

FY 1

998

FY 1

999

FY 2

000

FY 2

001

FY 2

002

FY 2

003

FY 2

004

FY 2

005

FY 2

006

FY 2

007

FY 2

008

FY 2

009

FY 2

010

FY 2

011

FY 2

012

Millions Merit-Based Need-Based

Note: Excludes federally-funded programs


Tuition Incentive Program (TIP)

Established in FY 1986-87 as incentive for low-income students to complete high school and enroll in college. Student’s family must be Medicaid eligible for 24 months in a 36-month period to enroll in program.

Program has two phases:– Phase I: Associate’s degree tuition costs (limited to average community college

tuition rate for students at private institutions)– Phase II: Up to $2,000 total toward completion of bachelor’s degree

Large potential pool of participants: Department of Treasury sends out nearly 200,000 letters to eligible students each year.

Over 75% of Phase I students enrolled at community colleges. Number of students claiming Phase II awards much smaller.

Because of increasing participation rates, program costs have increased from $5.0 million in FY 2000-01 to $43.8 million in FY 2011-12. Currently, over 16,000 students are receiving TIP assistance.


TIP Participation/Expenditure Growth

$0

$10

$20

$30

$40

0

5,000

10,000

15,000

20,000

FY 2001

FY 2002

FY 2003

FY 2004

FY 2005

FY 2006

FY 2007

FY 2008

FY 2009

FY 2010

FY 2011

FY 2012 (Approp)

Mill

ions

$

Participants (Left Axis)

Total Payments (Right Axis)


Other Higher Education Programs

King-Chavez-Parks: $2.7 million GF/GPGrant programs to increase participation of academically or economically disadvantaged students in postsecondary education. Additional funds allocated from public university base appropriations.

Higher Education Database: $105,000 GF/GPMaintenance of Higher Education Institutional Data Inventory (HEIDI), to which public universities submit enrollment/finance data annually.

Midwestern Higher Education Compact: $95,000 GF/GPDues for interstate compact to realize economies of scale and provide other higher education-related assistance.


One-Time Appropriations

Three appropriations totaling $1.9 million GF/GP are included in FY 2011-12 boilerplate language on a “one-time basis only”:

$500,000 GF/GP for the Autism Collaborative Center at Eastern Michigan University

$1.2 million for the Facility for Rare Isotope Beams at Michigan State University

$200,000 GF/GP for economic development and commercialization at Western Michigan University


PUBLIC UNIVERSITY DATA

Key Data Definitions

Pursuant to statutory and budget act requirements, the 15 public universities annually submit enrollment, finance, and other institutional data to the state’s Higher Education Institutional Data Inventory (HEIDI).

Enrollment definitions:

– Student Headcount: Number of individual students enrolled for at least one class at a university.

– Fiscal Year Equated Students (FYES): Calculated equivalent of the number of full-time students enrolled at a university.

Finance definitions:

– Current Fund: All revenue/expenditures for current operations―including auxiliary operations, such as hospitals and dormitories, and operations funded from restricted sources, such as research grants.

– General Fund: Subset of current fund revenue/expenditures for instruction and related activities; nearly all general fund revenue received through state appropriations and student tuition/fees.


FY 2010-11 Public University Enrollments

0

10,000

20,000

30,000

40,000

50,000

CMU EMU FSU GVSU LSSU MSU MTU NMU OU SVSU UMAA UMD UMF WSU WMU

Headcount FYES


Public University Enrollment History

0

25,000

50,000

75,000

100,000

125,000

150,000

175,000

200,000

225,000FY

197

7

FY 1

979

FY 1

981

FY 1

983

FY 1

985

FY 1

987

FY 1

989

FY 1

991

FY 1

993

FY 1

995

FY 1

997

FY 1

999

FY 2

001

FY 2

003

FY 2

005

FY 2

007

FY 2

009

FY 2

011

Undergraduate FYES

Graduate FYES


University Enrollment GrowthFY 2000-01 to FY 2010-11

(20.0)

0.0

20.0

40.0

LSSU

WM

U

EMU

WSU

MSU

UM

-D

CM

U

MTU

UM

-AA

NM

U

FSU

UM

-F OU

SVSU

GVS

U

% C

hang

e

Note: Changes based on total Fiscal Year Equated Students (FYES)


Public University General Fund Revenue

FY 2009-10 Total = $5.4 Billion

Student Tuition/Fees

$3,591,738,300 66.0%

State Appropriations$1,420,344,900

26.1%

Other$426,942,181

7.8%


Public University General Fund Revenue Source History

% o

f Tot

al G

F R

even

ue

0%

25%

50%

75%FY

197

7FY

197

8FY

197

9FY

198

0FY

198

1FY

198

2FY

198

3FY

198

4FY

198

5FY

198

6FY

198

7FY

198

8FY

198

9FY

199

0FY

199

1FY

199

2FY

199

3FY

199

4FY

199

5FY

199

6FY

199

7FY

199

8FY

199

9FY

200

0FY

200

1FY

200

2FY

200

3FY

200

4FY

200

5FY

200

6FY

200

7FY

200

8FY

200

9FY

201

0FY

201

1FY

201

2

Other

State Appropriations

Tuition and Fees

Note: FY 2011-12 amounts are estimates


Public University General FundRevenue per FYES: FY 2010-11

$0

$10,000

$20,000

$30,000

CMU EMU FSU GVSU LSSU MSU MTU NMU OU SVSU UMAA UMD UMF WSU WMU

State Appropropriation Tuition Other


Average Resident UndergraduateTuition and Fee Rate

$0

$5,000

$10,000

$15,000FY

199

2

FY 1

993

FY 1

994

FY 1

995

FY 1

996

FY 1

997

FY 1

998

FY 1

999

FY 2

000

FY 2

001

FY 2

001

FY 2

003

FY 2

004

FY 2

005

FY 2

006

FY 2

007

FY 2

008

FY 2

009

FY 2

010

FY 2

011

FY 2

012

UM-Ann Arbor

Michigan State

Average:15 Universities

Saginaw Valley


Tuition Rates and State Funding

-15%

-10%

-5%

0%

5%

10%

15%FY

199

1

FY 1

992

FY 1

993

FY 1

994

FY 1

995

FY 1

996

FY 1

997

FY 1

998

FY 1

999

FY 2

000

FY 2

001

FY 2

001

FY 2

003

FY 2

004

FY 2

005

FY 2

006

FY 2

007

FY 2

008

FY 2

009

FY 2

010

FY 2

011

FY 2

012

% C

hang

e Fr

om P

rior Y

ear

Average Resident UndergraduateTuition/Fee Rate

State Funding/FYES

Note: FY 2011-12 basedon FY 2010-11 FYES


Public University GeneralFund Expenditures

0%

20%

40%

60%

80%

100%FY

199

5

FY 1

996

FY 1

997

FY 1

998

FY 1

999

FY 2

000

FY 2

001

FY 2

002

FY 2

003

FY 2

004

FY 2

005

FY 2

006

FY 2

007

FY 2

008

FY 2

009

FY 2

010

FY 2

011

% o

f Tot

al E

xpen

ditu

res Financial Aid

TransfersAux EnterprisesPlant Ops & MaintInst SupportPublic ServiceResearchStudent ServicesAcademic SupportInstruction


Total Public University General Fund Expenditures per FYES

$0

$5,000

$10,000

$15,000

$20,000FY

199

1

FY 1

992

FY 1

993

FY 1

994

FY 1

995

FY 1

996

FY 1

997

FY 1

998

FY 1

999

FY 2

000

FY 2

001

FY 2

001

FY 2

003

FY 2

004

FY 2

005

FY 2

006

FY 2

007

FY 2

008

FY 2

009

FY 2

010

FY 2

011

Expe

nditu

res/

FYES

Nominal Expends/FYES Adjusted for US CPI Adjusted for Higher Ed Price Index


Degree Completions at Public Universities

0

20,000

40,000

60,000

FY 1

990

FY 1

991

FY 1

992

FY 1

993

FY 1

994

FY 1

995

FY 1

996

FY 1

997

FY 1

998

FY 1

999

FY 2

000

FY 2

001

FY 2

001

FY 2

003

FY 2

004

FY 2

005

FY 2

006

FY 2

007

FY 2

008

FY 2

009

FY 2

010

FY 2

011

Professional

Doctoral

Master's

Bachelor's

Associate's


Major Public University Bachelor’s Degree Program Areas

0 2,000 4,000 6,000 8,000

English Language/Literature

Visual/Performing Arts

Biology/Biomedical

Communications/Journalism

Psychology

Engineering

Education

Social Sciences

Health Professions

Business/Management

FY 2003-04 Completions FY 2010-11 Completions

7-Year% Change

102.0

26.6

2.4

(15.3)

19.9

38.9

13.1

(7.7)

(33.5)

11.8


For more information about the Higher Education budget, contact:

Kyle I. [email protected]

(517) 373-8080

Higher Education - Budget Briefing FY 2011-12 · LSSU UMF UMD SVSU NMU MTU FSU OU GVSU EMU CMU WMU...

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