January 15, 2009 Kyle R. Carter Provost and Senior Vice Chancellor.

Academic Forum: How to Survive Manage the Reversion Anticipated

Budget ReductionJanuary 15, 2009

Kyle R. CarterProvost and Senior Vice Chancellor

Budget 101The Budget ShortfallActions to DateWCU’s Unique ProblemCorrective ActionsQuestions and Discussion

Outline of Today’s Forum

The University’s E&G (Education and General) budget ◦ Funds that pay for core personnel and operations related

to the university’s mission◦ Sources

State appropriations Tuition

Capital budget◦ Funds specifically earmarked for construction

Auxiliary and fee budgets◦ Self-supporting budgets that exist on revenues generated

◦ Outside the E&G budget

Examples: Book Store, Housing, Athletics, University Center operations

Budget 101: Types of Budgets

Component Percent Source

State Appropriation

80% Legislature: Enrollment (SCH)

Tuition 20% Students

Budget 101: The E & G Budget

See Handout 1: SCH – Enrollment Change Funding Model

Budget 101: Enrollment Funding

State revenue shortfall expected to be 10% or more of 2008-09 budget

Reductions to E & G budget◦ Reversion for 2008-09◦ Anticipated permanent reductions for next year

Budget Shortfall

Budget Reductions: Essential Points

Applies only to state appropriation WCU’s state appropriation is approximately

$95.5 million Every 1% equates to approximately

$955,000

Budget Shortfall

What is a reversion?◦ State sends a lesser amount than promised ◦ One-time cut

Effect on 2008-09 WCU’s E&G budget◦ 5% less than expected◦ Institution $4.8 million◦ Provost Division $3.5 million

Handled centrally—So far Held back 20 new faculty positions Academic support dollars Reserve funds

Budget Shortfall: The Reversion

Scenarios Reductions in Millions of Dollars

3% 5% 7% 8%

Institution $2.9 $4.8 $6.7 $7.6

Provost $2.1 $3.5 $4.9 $5.6

Budget Shortfall: Planning for Reductions to 2009-10 E&G Budget

Identified criteria to guide decisions Brainstorming session to identify possible

cost savings strategies All Deans and Directors (and VCs from other

areas) have prepared 8% scenarios that are under review

See Handout 2

Actions to Date

Institutional Criteria◦ Strategic initiatives including UNC-T

QEP Millennial Campus Quality students

◦ Infrastructure◦ Retention and graduation

Provost Division◦ Production of distinguished graduates◦ Quality relationships that support core mission◦ Core programs, services and talent◦ Long-term productivity trumps short-term gains

Actions to Date: Criteria to Guide Decisions

SCH production not aligned with budget

WCU’s Unique Problem

Understanding the Problem New faculty positions are earned

separately ◦SCH through distance education◦SCH through resident instruction

WCU’s Unique Problem

Over budgeted by 25 to 30 faculty lines Over budgeted in support dollars that

accompany faculty lines in areas like◦ Academics◦ Library◦ IT◦ Finance◦ Development

WCU’s Unique Problem

WCU’s Unique Problem: The Student/Faculty Ratio

Student/Faculty Ratio

WCU 13 to 1

ASU 17 to 1

UNC-W 17 to 1

Number of faculty Class size Size of curriculum Class scheduling Concentration in major Faculty load

WCU’s Unique Problem: Some Variables Associated with Student/Faculty Ratio

WCU’s Average Instructional Salary = $73,983

Institution Amount Above WCU

Pembroke $1,100

App. State $1,540

UNC-A $3,308

UNC-W $3,613

Question: What would happen to future budgets if WCU increased its AIS?

WCU’s Unique Problem:Average Instructional Salary Ranks 11th in the System

Reduce current instructional FTE (582.25) by at least 30 FTE

Increase S/F ratio to 17 to 1 Increase average instructional salary

Cautions Move toward 3/3 faculty load Focus on quality

Corrective Actions: Getting Back in Balance

FALL CLASS SCHEDULEis due January 29th

See Handout 3: Strategies for Fall Semester 2009

Corrective Actions: The Most Pressing Problem

Size of the major Size and flexibility of Liberal Studies

See Handout 4: Actions

Corrective Actions: More Long-term Issues

More efficient curriculum◦Better retention◦Better graduation rates

Higher future levels of funding Increased faculty salaries More appropriate faculty loads Increased quality in academic programs

Corrective Actions: Anticipated Results