1. 2 3 $79.3 81.6 83.4 84.2 86.7 101.2 120.4 139.7 110.9 ? 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010.

1

2

Total State Appropriations 2001-2010

$60

$80

$100

$120

$140

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

?

In Millions

3

$79.3 81.6 83.4 84.2 86.7 101.2 120.4 139.7 110.9 ?

2001200220032004200520062007200820092010

4

Initial Decrease from 2008 $17.8 million

Recent Proration 11.0

_____

Total 2009 Decrease $ 28.8 million

Down 20.6% from 1 year ago.

Current Year Appropriation

5

Division budgets compared to net state appropriation (in millions)

2008-09

Budget Approp.

O&M 163.9 69.2

College of Med. 97.3 30.0

Hospitals 317.0 9.6

6

Total Budget by Division - 2009

O&M29%

Auxiliaries3%

College of Medicine17%

MCI3%

Hospitals48%

7

State Appropriations by Division - 2009

O&M62%

MCI2%

Hospitals9%

College of Medicine27%

8

0%

10%

20%

30%

40%

50%

60%

2001 2009

Composition of Revenues - O&M2001 and 2009

State Appropriations Tuition and Fees Other

56%

39%

5%

45%47%

8%

9

Division budgets compared to net state appropriation (in millions)

2008-09

Budget Approp.

O&M 163.9 69.2

College of Med. 97.3 30.0

Hospitals 317.0 9.6

10

Operations and Maintenance Budget, 2008-09

11

Operations and Maintenance Net Cut in State Funds from 2008:

$16.4 million

Increased revenue (tuition, etc.):$5.7 million

Internal budget cuts: $1.9 million

Net shortfall: $8.8 million

12

COSTS:(“fixed” costs)

Benefits: $8.9 millionHealth insurance: 6.9 millionUtilities: 10.8 millionRetiree pension: 9.8 million

Peehip for retirees: 2.4 million Debt service: $9.9 million

TOTAL fixed costs: $48.7 million

13

Others: Supplies/travel/operating $16.6 million Other 1.3 million Scholarships 4.8 millionSubtotal: $22.7 million

Salaries: $92.5 million

TOTAL: $163.9 million

14

Fixed Costs: $48.7 million

Others: $22.7 million

Salaries: $92.5 million

TOTAL: $163.9 million

15

REVENUES:

State Appropriations: $69.2 millionTuition and Fees: 72.7 millionOther: 13.1 million

(Sales of educational services,

interest income, grants overhead,and misc.)

TOTAL: $155.1 million

16

Total Operations and Maintenance Budget Shortfall, 2008-09:

Costs: $163.9 millionRevenues: 155.1 million________________________Shortfall: $ 8.8 million

17

Budget Reduction Measures

18

1) Equipment & Personal Computers (2008 O&M total = $5 million)

2) Travel (2008 O&M total = $3 million)

3) Cell Phones ($350,000 saved)

4) No Across-Board Salary Increases

19

5) Staff Position Freeze

6) Staff Reclassification Freeze

7) Temporary Personnel

8) Overtime Pay

20

Revenue Measures

1) Increased enrollment

2) Increased tuition

3) Control personnel costs

21

USA compared to other organizations affected by the economic downturn:

1. Demand for USA’s products is going up, not down.

2. USA needs to retain employees to address this demand.

22

Cost/savings per 1 percent of payroll (University-wide): $3.1 million

(O&M only): $1 million

Revenue generated per 1 percent of tuition increase:

$573,000

23