Tennessee Board of Regents Financial Overview January 19, 2010
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TENNESSEE BOARD OF REGENTSFINANCIAL OVERVIEWJANUARY 19, 2010
Presentation to the Association of Government Accountants’ Winter Seminar
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Outline
TBR Financial Basics How Have Tennessee Higher Education Finances
Changed In Last Decade Current Fiscal Challenges Key Issues
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TBR Revenue FY 2009-10 (millions)
State; 600.3; 24%
ARRA/MOE; 142.9; 6%Student
Fees; 813.3; 33%Sales & Ser-
vices; 146.8; 6%
Auxiliary; 113; 5%
Restricted; 672; 27%
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TBR Revenues: 2 Year View2009-10 %
2008-09 Oct. Revised Total Amount %
State appropriationsOperating appropriation 694,442,900$ 600,269,100$ 24% (94,173,800)$ -16%ARRA & MOE 59,742,600 142,876,700$ 6% 83,134,100$ 53%
Subtotal 754,185,500 743,145,800 30% (11,039,700) -1%
Student feesMaintenance and tuition 621,910,200 697,259,900 28% 75,349,700$ 12%Mandatory fees 72,115,900 76,047,000 3% 3,931,100$ 5%Other fees 38,121,000 40,002,000 2% 1,881,000$ 5%
Subtotal 732,147,100 813,308,900 33% 81,161,800 11%
Sales/services/other 151,101,900 146,849,300 6% (4,252,600)$ -3%
Auxiliary 107,566,000 112,960,800 5% 5,394,800$ 5%
Restricted 605,725,200 672,023,900 27% 66,298,700$ 11%
Total 2,350,725,700 2,488,288,700 100% 137,563,000 6%
ChangeCategory
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FY 2009-10 Expenditures (By Function, Millions)
Instruction; 835.8678;
49%
Research; 46.4754; 3%
Public Service; 23.1281; 1%
Academic Support;
142.85; 8%
Student Services; 223.1036;
13%
Institutional Support;
208.8264; 12%
O&M; 155.9664; 9%
Scholarships & Fel-lowships; 60.1272; 4%
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Expenses by Function: 2 Year View2009-10 %
Category 2008-09 Revised Total Amount %
Instruction 797,354,300 835,867,800$ 49% 38,513,500$ 5%Research 40,081,600 46,475,400 3% 6,393,800$ 16%Public Service 24,177,100 23,128,100 1% (1,049,000)$ -4%Academic Support 132,385,300 142,850,000 8% 10,464,700$ 8%Student Services 218,269,900 223,103,600 13% 4,833,700$ 2%Institutional Support 199,920,300 208,826,400 12% 8,906,100$ 4%O&M 149,288,200 155,966,400 9% 6,678,200$ 4%Scholarships & Fellowships 51,747,500 60,127,200 4% 8,379,700$ 16%
Subtotal 1,613,224,200 1,696,344,900 100% 83,120,700 5%
Auxiliaries 73,622,500 75,633,900 2,011,400$ 3%Subtotal Unrestricted 1,686,846,700 1,771,978,800 85,132,100 5%
Restricted 597,604,600 661,919,700 64,315,100$ 11%Total 2,284,451,300 2,433,898,500 149,447,200 7%
Change
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FY 2009-10 Expenditures (By Object, Millions)
Salaries; 868.2024; 51%
Benefits; 299.9243; 18%
Travel; 26.0768; 2%
Operating; 471.6467;
28%
Capital Outlay; 30.4947; 2%
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Expenses by Object: 2 Year View2008-09 2009-10 %
Estimated Revised Total Difference %
Salaries 859,866,100 868,202,400 51% 8,336,300 1%Benefits 287,245,900 299,924,300 18% 12,678,400 4%Travel 28,054,500 26,076,800 2% (1,977,700) -7%Operating 409,757,700 471,646,700 28% 61,889,000 15%Capital Outlay 28,300,000 30,494,700 2% 2,194,700 8%
Subtotal 1,613,224,200$ 1,696,344,900$ 100% 83,120,700$ 5%
Auxiliaries 73,622,500 75,633,900 2,011,400 3%Subtotal Unrestricted 1,686,846,700 1,771,978,800 85,132,100 5%
Restricted 597,604,600 661,919,700 64,315,100 11%Total 2,284,451,300 2,433,898,500 149,447,200 7%
Change
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How Have Tennessee Higher Education Finances Changed In The Last Decade
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Tennessee Higher Education Commission
Annual Percent Change in State Appropriations
1993
-94
1994
-95
1995
-96
1996
-97
1997
-98
1998
-99
1999
-00
2000
-01
2001
-02
2002
-03
2003
-04
2004
-05
2005
-06
2006
-07
2007
-08
2008
-09
2009
-10
2010
-11
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
8.0%10.1%
2.6% 2.0%
-1.4%
6.4%
1.9% 3.1% 2.5% 2.6%
-1.5%
3.1% 3.7%
7.5% 6.4%
-7.6%
-15.0%
-6.0%
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Tennessee Higher Education Commission
Tuition and Fees
5 Yr. 10 Yr. 1998-99 2003-04 2008-09 Change Change
APSU 2,452 4,004 5,526 38.0% 125.4%ETSU 2,384 3,839 5,201 35.5% 118.2%MTSU 2,376 3,990 5,700 42.9% 139.9%TSU 2,288 3,788 5,102 34.7% 123.0%TTU 2,306 3,750 5,244 39.8% 127.4%UM 2,630 4,234 6,128 44.7% 133.0%UTC 2,464 3,852 5,310 37.9% 115.5%UTK 2,744 4,450 6,250 40.4% 127.8%UTM 2,342 3,830 5,255 37.2% 124.4%CC Avg 1,240 2,065 2,773 34.3% 123.6%TTC 932 1,548 2,285 47.6% 145.2%
Resident Undergraduate StudentTotal Annual Tuition and Fees
Median TN Family Income Growth, 2002-2007: 13% or $6,100.12
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Tennessee Higher Education Commission
Higher Education Revenues
$12,707 $13,252
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
$11,000
$12,000
$13,000
$14,000
$15,000
1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
Total Revenue per FTE -UniversitiesInflation Adjusted
StAppr StFees Total
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Tennessee Higher Education Commission
Higher Education Revenues
$7,529 $7,939
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
Total Revenue per FTE - Community CollegesInflation Adjusted
StAppr StFees Total
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Tennessee Higher Education Commission
Shifting Revenue StreamsINFLATION ADJUSTED TO 2008-09 DOLLARS
1998-99 2008-09 % ChangeUniversitiesState Approp. 734,506,000 630,593,000 -14.1%Tuition & Fees 483,210,000 807,049,000 67.0%FTE 95,834 108,484 13.2%Avg. Student Support 12,707 13,252 4.3%Student Share 39.7% 56.1%
Two-Year Inst.State Approp. 242,063,000 218,003,000 -9.9%Tuition & Fees 109,038,000 189,725,000 74.0%FTE 46,635 51,360 10.1%Avg. Student Support 7,529 7,939 5.4%Student Share 31.1% 46.5%
Sources: System Operating Budget Reports and THEC Enrollment DataTuition & Fees include maintenance fees, out of state tuition and all required fees.
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Tennessee Higher Education Commission
Shifting Revenue StreamsINFLATION ADJUSTED TO 2008-09 DOLLARS
1998-99 2008-09 % ChangeUniversitiesState Approp. 734,506,000 630,593,000 -14.1%Tuition & Fees 483,210,000 807,049,000 67.0%FTE 95,834 108,484 13.2%Avg. Student Support 12,707 13,252 4.3%Student Share 39.7% 56.1%
Two-Year Inst.State Approp. 242,063,000 218,003,000 -9.9%Tuition & Fees 109,038,000 189,725,000 74.0%FTE 46,635 51,360 10.1%Avg. Student Support 7,529 7,939 5.4%Student Share 31.1% 46.5%
Sources: System Operating Budget Reports and THEC Enrollment DataTuition & Fees include maintenance fees, out of state tuition and all required fees.
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Tennessee Higher Education Commission
Shifting Revenue StreamsINFLATION ADJUSTED TO 2008-09 DOLLARS
1998-99 2008-09 % ChangeUniversitiesState Approp. 734,506,000 630,593,000 -14.1%Tuition & Fees 483,210,000 807,049,000 67.0%FTE 95,834 108,484 13.2%Avg. Student Support 12,707 13,252 4.3%Student Share 39.7% 56.1%
Two-Year Inst.State Approp. 242,063,000 218,003,000 -9.9%Tuition & Fees 109,038,000 189,725,000 74.0%FTE 46,635 51,360 10.1%Avg. Student Support 7,529 7,939 5.4%Student Share 31.1% 46.5%
Sources: System Operating Budget Reports and THEC Enrollment DataTuition & Fees include maintenance fees, out of state tuition and all required fees.
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Tennessee Higher Education Commission
Total Student Support
2006-07Avg. Support per
FTE*Avg. Support per
FTE - Peers*Percent of Peer
Avg.APSU 9,115 11,338 80.4%ETSU 10,728 12,157 88.2%MTSU 9,721 11,351 85.6%TSU 12,622 12,275 102.8%TTU 11,216 11,551 97.1%UM 12,932 13,297 97.3%UTC 10,461 11,717 89.3%UTK 14,438 16,200 89.1%UTM 9,843 10,885 90.4%Average $11,231 $12,308 91.2%*Includes state appropriations and tuition and fee revenueSource: SREB Data Exchange
Student Support Analysis Compared to Peers
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Compound Annual Growth Rate: Adjusted TN Tax Collections, (1998-2007)
4.0%
7.1%
4.2%4.9%
3.2%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
Gen Sales Corporate Total Individual Income
Higher Ed Approp.
Com
poun
d An
nual
Gro
wth
Personal Income
Growth = 4.9%
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Current Fiscal Challenges
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Overview of State Appropriations (millions)
2007-08 2008-09 2009-10 $500.0
$550.0
$600.0
$650.0
$700.0
$750.0
$800.0
$757.1 $707.5
$614.2
$38.7
$104.2
State MOE ARRA
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Overview of State Appropriations (millions)
2007-08 2008-09 2009-10 2010-11 (est)
$500.0
$550.0
$600.0
$650.0
$700.0
$750.0
$800.0
$757.1 $707.5
$614.2 $577.4
$38.7 $75.5
$104.2 $104.2
State MOE ARRA
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Overview of State Appropriations (millions)
2007-08 2008-09 2009-10 2010-11 (est)
2011-12 (est)
$500.0
$550.0
$600.0
$650.0
$700.0
$750.0
$800.0
$757.1 $707.5
$614.2 $577.4 $577.4
$38.7 $75.5
$104.2 $104.2
State MOE ARRA
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Use of ARRA Funds (millions)
Salaries / Benefits;
100.7; 39%
Facilities; 93.9; 37%
Financial Aid; 23.2; 9%
Other; 38.4; 15%
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Summary of Funding Challenge (millions)
State Fund-ing Reduc-tion; 146.9;
56%
Scholarships; 18.9; 7%
Inflation; 13.3; 5%
FTE Growth; 11.7; 4%
Other; 70.7; 27%
Note: excludes assumed FY 2011 state funding reduction
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Summary of Solution (millions)
Assumed Tu-ition; 104.7;
40%
Budget Re-duction; 89;
34%
FTE Growth; 55.2; 21%
Other Revenue; 12.6; 5%
Note: excludes assumed FY 2011 state funding reduction
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Budget Reduction Summary (millions)
Voluntary Buyouts /Eliminate Positions; 35.7; 40%
Restructure / Reorga-nize Personnel; 6.9; 8%
Operating Reduc-tions; 36.4; 41%
Eliminate Aca-demic Programs;
2.4; 3%
Other; 7.6; 9%
Note: excludes assumed FY 2011 state funding reduction
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Key Challenges For Administrators
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Educational AttainmentIf our State goal is to reach the U.S. average in
educational attainment by 2025, then we must increase the number of
college graduates by 3.5% annually
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Economic Importance Of Educational Attainment
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Growing Occupations In Tennessee Pay More Than Twice That Of Declining Occupations
None of the top 10 declining occupations require any post- secondary education.
In contrast, eight of the top 10 fastest growing occupations require some post- secondary education.
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Trends In Higher Education Funding
1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 -
1,000
2,000
3,000
4,000
5,000
6,000
Tuition Appropriations Total Support
Inflation Adjusted Appropriations per FTE vs. Tuition1986-87 to 2008-09
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Tuition & Fees Per FTE As % Of Peer Institutions
% or Peers Rank
Austin Peay State Univeristy 101.4% 5
East Tennessee State University 110.3% 2
Middle Tennessee State University 102.6% 4
Tennessee State University 128.4% 1
Tennessee Technological University 104.8% 3
The University of Memphis 86.2% 6
University Average 97.1%
Community College Average 123.9%
Fees
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Conclusions
Need to create a more educated populous Declining levels of state financial support
Increased levels of tuition & fees needed to - Partially offset lost state funds Fund cost of servicing increased enrollments Fund inflationary costs
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Future ChallengeState’s Future Prosperity Depends on an Educated Populous
Current low educational attainment levels represent a threat to Tennessee’s future economic vitality
Need for higher enrollments combined with increased levels of degree and certificate completions are the cure
Must Be Accomplished In the Face Of - - Stagnant or Decreasing State Support
Limitations on Ability of Students to Finance Education
Need for Increased Educational Productivity Doing more with the same (or less)
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Questions