2015-17 Postsecondary Budget Recommendation December 18, 2014 1.

1

2015-17 Postsecondary Budget Recommendation

December 18, 2014

2

Operating$1,261,170,333

65%

Student Financial Aid$311,211,260

16%

Capital Projects (Debt)154,822,110

8%

Capital Projects (Cash)$107,675,000

6%

Institution Line Items$66,038,418

3%

Repair and Rehabilitation$28,492,947

1%Other Higher Education Line Items$14,220,052

<1%

FY 15 Higher Education Appropriations

OperatingStudent Financial AidDebt ServiceCapital Projects (Cash)Institution Line ItemsRepair and RehabilitationOther Higher Education Line Items

Higher Education Budget

3

Overview

• Operating• Line items• Capital Projects• Repair & Rehabilitation• Tuition & Mandatory Fees

4

Operating

5

CPI-Urb

an

CPI (Less

Food/En

ergy)

CPI (Educati

on & Communica

tion)

CPI (Midwest

)HEC

AHEP

I

Averag

e

IN Per Cap

ita In

come (

Inflation Adj.)

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

3.56%

3.91%

3.36%3.46%

3.59%

3.29%

2 Year % Change

Average 2 Year % Change = 3.53%

2 Year % Change (2011 Base Year)

6

Full-Time Equivalent vs. Headcount

• FTE: standardized way of measuring credit production

# credit hours attempted during FY30 (24 for graduate)

• Headcount: count of students attending an institution

• Examples: – Shelley attends college part time at 8 credits per semester.

(.5FTE; 1 headcount) – Keith attends college full time at 15 credits per semester.

(1 FTE; 1 Headcount)

FTE=

7

2009 2010 2011 2012 20130

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

55,000

60,000

65,000

70,000

75,000

USI

BSU

ISU

Vincennes

Ivy Tech

IU BloomPurdue WL

IU Regional

PU Regional

Resident FTE (UG and Grad)

USI BSU ISU Vincennes Ivy TechIU Bloom Purdue WL IU Regional IUPUI GA PU Regional

IUPUI GA

Resident FTE flat / Declining

8

Budget Recommendation – Guiding Principles

• Maintain commitment to student financial aid

• Maintain state’s support for higher education

• Use inflation indices (e.g., CPI, HECA) to inform recommended higher education funding

• Align recommendation to Reaching Higher, Achieving More strategic plan– Student-centered, mission-driven, workforce-aligned– Completion, productivity/affordability, quality

9

Recommendation - Operating

• FY16: Increase performance funding pool to 7% in FY16 with 4% reallocation ($46.4M) and 3.23% ($37.4M) Total FY16 Performance Funding: $83.8M

• FY17: Increase performance funding pool to 8% in FY17 with 5% ($58M) reallocation and 3.26% ($37.8M) Total FY17 Performance Funding: $95.8M

• Performance funding = 4.4% of total annual higher education funding

10

Line Items

11

Recommendation - Line Items • Fund previously existing line items (excluding USI $2M, BSU $4.087M and IPFW

$2M which were rolled into FY15 base funding)

• No newly requested line items recommended • If previously existing line item increases requested were in excess of the operating

increase, increases were reduced to max operating increase

• Fund Dual-Credit at current $50 per credit hour (a 77.5% increase from previous biennium; $6,398,600 increase in dollars)

• BIF Dedicated funds included in submissions funded at requested levels as no request exceeded operating increase (excluding MHEC contract)

12

Capital Projects

13

Higher Education Capital Projects

• Focus on:– Priority one projects – Deferred maintenance of buildings – Projects that improve academic space needs for campuses

• Consider the impact on student fees and state support for capital projects (debt service)

• Maintain overall debt levels near 10% of operating funds

14

Capital Projects Recommended

• Capital Projects Requested:– 31 Projects– $761,700,000

• Capital Projects Recommended: – 7 Projects– $285,000,000

• Debt Service per year: $22M

15

• Ball State STEM & Health Professionals Facility Renovation & Expansion Project, Phase I: $62.5M

• Indiana State College of Nursing, Health, and Human Services Project: $64M

• Ivy Tech Muncie New Construction & Renovation: $25.0M

• IU Bloomington Old Crescent Renovation Phase II: $48.5M

• PU West Lafayette Agriculture & Life Sciences Facility Phase I: $30.0M

• USI Classroom Renovation/Expansion Health Professionals Center: $8.0M

• VU Center of Science, Engineering and Mathematics: $20.0M

Capital Projects Recommended

16

Repair & Rehabilitation

17

Repair & Rehabilitation Support

• Focus on investment allocation target to support maintenance and upkeep on academic/administrative buildings– 1.0% per year of current facility and infrastructure value

• Recommend repair and rehabilitation funding as partnership between state and institutions

• Recommend state support of investment goal at 0.50% each biennium - $31.7M from state in 2016 and 2017 (11.5% increase in overall funding)

• Total deferred maintenance as of 2012: $1.8B

18

Percent increase in SFA if 21st Century Scholars is held flat

Overall Higher Education Budget

19

Funding Per FTE Past 5 Years

20

• Tuition Targets: Commission sets nonbinding targets for tuition and mandatory fee increases after each budget session– Last biennium: limit to CPI or no more than 2%

• Tuition Structures: This biennium, Commission also looking at tuition structure as a tactic for student success– Do students pay by the credit hour or a flat rate?– How does that influence on-time completion?

Looking Ahead

21

Summary

Bottom line: Increased investment in higher education means:

– Additional financial support per resident FTE– Continued support for state financial aid programs– Increased state support for capital investment

and maintenance of facilities– Targeted funding for returning adults

Ultimate Outcome:Enhanced ability to meet the goals and initiatives of Reaching Higher, Achieving More