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New Hampshire Trends, Higher Education and the State Budget

Steve NortonExecutive Director NH Center for Public Policy Studies

“…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.”

Nashua Rotary, 11-10-08

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Voting PatternsChange

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4

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When Will it End?(Economy.com)

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Macro Trends

• Aging– People are getting older, fewer children

• Economic Change– Agriculture -> Manufacturing -> ?

• The World is Flat– Information, Communication, Transportation

• Environmental Change– Climate, Water, Conservation

• Migration• Role of Towns in Shaping New Hampshire

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Age Distribution: 1970

Distribution of NH Population by Age in 1970

(60,000) (40,000) (20,000) - 20,000 40,000 60,000

0-4

5-9

10-14

15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65-69

70-74

75-79

80-84

85+

Persons

(60,000) (40,000) (20,000) - 20,000 40,000 60,000

Males Females

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Age Distribution: 1995

Distribution of NH Population by Age in 1995

(60,000) (40,000) (20,000) - 20,000 40,000 60,000

0-4

5-9

10-14

15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65-69

70-74

75-79

80-84

85+

Persons

(60,000) (40,000) (20,000) - 20,000 40,000 60,000

Males Females

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Age Distribution: 2020?

Distribution of NH Population by Age in 2020

(60,000) (40,000) (20,000) - 20,000 40,000 60,000

0-4

5-9

10-14

15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65-69

70-74

75-79

80-84

85+

Persons

(60,000) (40,000) (20,000) - 20,000 40,000 60,000

Males Females

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Health Care (not high income jobs) Accounts for Much of Projected Job

Growth

Source: NH Department of Labor Projections

Distribution of Estimated 113,788 New Jobs by Industry (2004-2014)

Education (All)24%

Retail17%

All Other17%

Health Care42%

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What is NH?

The Tech Corridor?

The Lakes RegionThe North Country

The Seacoast

The Capital RegionThe Monadnock Region

Mt Washington Valley

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Geographic Variation: What Do Regions Have in Common?

Source: NH Office of State Planning Estimates

Population C hange 2000 to 2005

-27 - 50

50 - 100

100 - 200

200 - 300

300 - 1,000

1,000 - 3 ,000

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Proportion of Population Over the Age of 65 Dramatically Changing

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Where did the money go?

Share of $1.3 billion increase in general fund appropriations 1998-1999 to 2008-2009

10 NH RETIREMENT

SYSTEM (Including Health)

12%

16 DEPARTMENT OF CORRECTIONS

8%06 UNIVERSITY

SYSTEM5%

08 TREASURY DEPARTMENT

7%

All Other16%

03 DEPARTMENT OF EDUCATION

7%

04 NH COMMUNITY TECH COLLEGE

SYS2% 01 DEPT OF

HEALTH AND HUMAN SVCS

43%

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Per Capita General Fund Appropriations(Inflation Adjusted)

$1,029.93 $1,038.48

$0.00

$200.00

$400.00

$600.00

$800.00

$1,000.00

$1,200.00

1997 Per Capita (in 2007 $) 2007 Per Capita

What about purchasing power … has it increased?

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Feast and Famine: 1997-2007 Change in General Fund Appropriations

(in $2007 per capita)

($90.94)

$10.20$11.91$15.36$29.17

$32.86

($110.00)

($90.00)

($70.00)

($50.00)

($30.00)

($10.00)

$10.00

$30.00

$50.00

MedicaidProvider

Payments

RetirementSystem

SpecialEducation

SchoolBuilding Aid

Dept ofCorrections

Rest ofBudget

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Changes in General Fund Contributions (Education Related)

Appropriation Type FY 1997 Budget FY 2007 Budget

1997 Per Capita (in 2007 $)

2007 Per Capita

Change in Inflation

Adjusted Per Capita

Spending 3 Special Education $9,900,000 $35,990,000 $11.30 $26.66 $15.364 School Building Aid $16,000,000 $40,735,039 $18.27 $30.18 $11.91

11 Post Secondary Education Commission $1,637,593 $4,464,040 $1.87 $3.31 $1.4427 College for Lifelong Learning $987,000 $1,787,514 $1.13 $1.32 $0.2038 UNH - Consulting Center $143,000 $167,703 $0.16 $0.12 ($0.04)47 UNH - Manchester $1,349,000 $1,823,027 $1.54 $1.35 ($0.19)51 Keene State College $8,230,000 $12,239,338 $9.40 $9.07 ($0.33)57 Plymouth State College $8,430,000 $12,239,338 $9.63 $9.07 ($0.56)63 Dept of Post Secondary Technical Education $17,579,338 $25,772,228 $20.07 $19.09 ($0.98)77 UNH - Durham $35,713,000 $48,425,634 $40.78 $35.87 ($4.91)

Total GF Contributions (Excluding Uncompensated Care) $901,949,480 $1,401,853,534 $1,029.93 $1,038.48 $8.55

Changes in State General Fund Contributions 1997-2007

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What about 2010-2011? NH Total Revenues, incl Medicaid Enhancement Rev

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Mill

ion

s $

Actual &Est Update Recovery and TrendRepeat of 2001-03 Repeat of Early 1990'S

Revenues from the General Fund and Education Trust Fund

$500 Million Biennium Shortfall

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A Convergence of trends ….

• Over the past decade a decline, in real terms, in state’s participation in higher education in the state.

• Economic recession Increases competition for state general funds.

• Aging Declining number of children graduating from high school Increased competition for college students.

• State budget conversations will impact ongoing state support (retirement, education adequacy).

• Independence of community colleges system will likely require initial support.

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May lead to tough decisions …

• Engage with business community etc… in a broader conversation about need to invest in higher education?

• Recruit and enroll students who would not have previously gone to college?

• Increase tuition rates faster than in recent years?

• Reduce faculty and programs?

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All of our reportsare available on the

web:

www.nhpolicy.orgwww.nhpolicy.org

New Hampshire Center New Hampshire Center for Public Policy Studiesfor Public Policy Studies

Board of Directors

Donna Sytek, Chair

John B. Andrews

John D. Crosier

Shelia T. Francoeur

Chuck Morse

Todd Selig

Stuart Smith

James Tibbetts

Brian Walsh

Kimon S. Zachos

Martin Gross

Staff

Steve Norton

Dennis Delay

Ryan Tappin

“…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.”