Deans, Chairs & Directors Meeting

April 30, 2009

Budget Update

Governor’s Budget Reduction Order

FY 08 Base Appropriation $124,392,100

Reduction: (June 2008) 6.1% $7,605,300

FY 09 Base Appropriation $116,786,800

Reversion: (October 2008)(became a base cut in Jan. ’09)

3.24% 4,034,800

FY 09 Revised Appropriation $112,752,000

Reduction: (July 2009) 12.74% 15,851,500

FY 10 Base Appropriation $ 96,900,500

Appropriation Reductions

Note: Total reductions from FY 08 Appropriation equal 22.1% ($27,491,600)

FY09 Revenues – All Sources

If the General Assembly approves the Governor’s budget, the University ‘s appropriation will be restored in the current year to it’s original level.

• Total Estimated Revenues $408.1 million with Federal Restoration- preliminary

• “E&G” is the Unrestricted Educational & General Budget, funded primarily by State Appropriations & Student Tuition & Fees

University Budget FY2009

The three main components of the University’s Budget:• Educational & General (E&G) -- primarily state & tuition/fee funded• Auxiliaries & Athletics – Revenue supported activities including student housing, bookstore, food

services, & vending; intercollegiate athletics• Restricted – Federal & State Grants, Sponsored Research, Private Gifts, Lottery, Pell, and Other

Financial Aid Programs

Total FY09 Budget (in millions) Original

Preliminary Spring (with restored funds)

Estimated + ARRA

Educational & General 260.8 271.3

Auxiliaries/Athletics 46.4 48.6

Restricted 87.7 88.2

Total 394.9 408.1

Student Fees – Current Year

Program Total Out-of-State Total

Maintenance Fees In-State Tuition Out-of-State

Undergraduate 4,978 1,150 6,128 11,586 17,714

Graduate 6,242 1,156 7,398 11,586 18,984

Law 11,168 1,616 12,784 21,872 34,656

FY09 Tuition - annual amount

• FY10 planning assumptions project a 5% increase in fees overall, factoring in both rates & cap phase-out

• On average, 5% equates to approximately $250 annually, or $125 per semester for full-time

• Phased implementation of the cap elimination over 3-5 years is under review by TBR • Per hour costs above the full-time cap are expected to be at reduced rates• The 5% projection represents the tuition estimate and the effects of the cap phase out

How UOM Compares To The Peers, 2008-2009

University of South Florida University of Houston, University Park University of AlabamaGeorgia State University University of Oklahoma, Norman University of LouisvilleVirginia Commonwealth University George Mason University Florida International Univ.University of Arkansas, Fayetteville University of South Carolina, Columbia Texas Tech University

FL FL GA UOM AR AL Avg VA TX OK VA KY TX SC -

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

3,906 3,975

6,056 6,128 6,399 6,400

6,650 6,779 6,783

7,423 7,512 7,564

8,167

8,838 Maintenance and Mandatory Fees

Source: TBR March 2009 Board Meeting

How UOM Compares To The Peers, 2007-2008

FL FL AR GA VA TN VA OK AVG TX TX AL KY SC -

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

3,5

70

3,3

45

5,2

89

4,6

71

7,6

96

6,1

74

7,6

81

7,2

16

7,1

59

8,0

27

8,2

84

8,2

96

9,3

40

12

,49

6

7,0

92

8,6

03

7,2

89

8,6

23

5,7

76

7,7

30

6,2

69

6,7

50

7,2

44

6,7

72

7,0

03

7,9

82

8,2

79

6,4

86

UOM vs. Peer Total Support per FTE Student (2007-08)

Fees Appropriations

($461) or -3.2% under peer average

Source: TBR March 2009 Board Meeting

University of South Florida University of Houston, University Park University of AlabamaGeorgia State University University of Oklahoma, Norman University of LouisvilleVirginia Commonwealth University George Mason University Florida International Univ.University of Arkansas, Fayetteville University of South Carolina, Columbia Texas Tech University

State Appropriation & Federal Stimulus Funds

$50.0

$70.0

$90.0

$110.0

$130.0

2007-08 2008-09 2009-10 20010-11 2011-12

$124.4$116.8

$96.9 $96.9 $96.9

$20.3 $20.3

$8.2 $8.2$7.3

$4.0

Reversion

Restoration

Moe

Stimulus

State

Current Year

Stimulus + MOE

Current Year Expected to be Restored with Federal Funds; MOE = Maintenance of Effort-State matching

Source: Governor’s Budget & TBR Guidelines; All figures are preliminary and subject to Legislative Revision

Beginning July 1, 2011

o Enrollment, Recruitment, and Retention

o Growth enrollment areas such as: Nursing, Public Health, & Distance Learning

o Minimize impact on students (timely graduation)

o Maximize external research funding

o Meet research contract requirements

o Target investments offering best potential for growing external research funding support

Priorities for this budget cycle

– Develop TBR Budget for FY10

– Formulate TBR 3-Year Budget Plan

– Develop Comprehensive Infrastructure Project Plan & Proposals for Stimulus Opportunities

Budget Development

Voluntary Buyout Plan• 126 Applicants; all were accepted into the Program

– 79 of 126 also retired from the University• Total Severance Payout: $3.4 million• Budget impact $6.2 million in salary and benefit dollars

Type #Avg. Severance

Payment Avg. SalaryAvg. Yrs of

Univ. Service

Faculty 25 $46,497 $81,305 28

Admin/Acad Prof’l 29 $29,325 $51,665 21

Hourly paid 72 $19,741 $23,669 17

Total 126 $27,256 $41,548 20

Academic Affairs Tier II CutsDescription Number Amount

Faculty Positions 46 $ 2,116,800Staff Positions 12 375,000Part Time Instruction 565,000Summer School 575,000Graduate Assistants 290,000Operating 441,200TOTAL $4,363,000

Academic Affairs Total CutsDescription Number Amount

Faculty Positions 99 $ 5,866,400Staff Positions (net) 39 1,180,300Part Time Instruction 1,040,000Summer School 1,893,000Graduate Assistants 290,000Operating 588,600TOTAL $10,858,300

Stimulus Guidelines

• Must be spent on non-recurring items that are likely to be phased out or that are scheduled to be funded with non-state sources in future years. (such as tuition revenue).

• All accounting will occur in a separate fund – cannot be co-mingled with other state dollars

• Coordinated Maintenance & Renovation Projects

• SET 2010 BASE BUDGET ($96.9M STATE)

• ALLOCATE SOME OF 2009 STIMULUS FUNDS

• ALLOCATE SOME OF 2010 STIMULUS FUNDS REQUIRING IMMEDIATE DECISIONS

• ESTABLISH 2010 AND 2011 BUDGETS INCLUDING STIMULUS FUNDS

NEXT STEPS

2009 STIMULUS FUND EXAMPLES• Restore some of Summer School Budget

• Supplement the Library Materials Budget

• Equipment Purchases

• Hobson’s Software (Recruitment Initiative)

• Shift of Base Expenditures to Stimulus Funds

• High Performance Computing Equipment Lease

2010 STIMULUS FUND EXAMPLES(Early Decisions)

• Restore Some of Part-time Instructional Budget

• Restore Some of Instructor, Visiting Professor, and Staff Budget

• Restore Some of Graduate Assistantship Budget

• Supplement the Library Materials Budget

• Faculty Start-up Funds

• Investment in Growth Initiatives (Nursing, Public Health, On-Line Programs)

2010-11 STIMULUS FUND STRATEGYSCENARIO ONE FOR A UNITo Maintain all the present degrees, programs, and

concentrationso Make the case for the same administrative

structure presently in placeo Assume Stimulus Funds will cover the gap until we

can return to normal in 2+ years

CONSEQUENCE: Decrease in operating budget, faculty, and staff for the unit.

2010-11 STIMULUS FUND STRATEGYSCENARIO TWO FOR A UNITo Examine all programs and concentrations and build and

focus on strongest programso Explore new program options (on-line, hybrid, flexible

schedule, cohort, course redesign) that would replace existing programs

o Examine the administrative and staff structure for efficiencies

o Aggressively pursue recruitment and retention programso Continue research growth

CONSEQUENCE: Potential for Increase Funding for the Unit

State Appropriation & Federal Stimulus Funds

$50.0

$70.0

$90.0

$110.0

$130.0

2007-08 2008-09 2009-10 20010-11 2011-12

$124.4$116.8

$96.9 $96.9 $96.9

$20.3 $20.3

$8.2 $8.2$7.3

$4.0

Reversion

Restoration

Moe

Stimulus

State

Current Year

Stimulus + MOE

Current Year Expected to be Restored with Federal Funds; MOE = Maintenance of Effort-State matching

Source: Governor’s Budget & TBR Guidelines; All figures are preliminary and subject to Legislative Revision

Beginning July 1, 2011

DISCUSSION