Funding Higher Education: 2010 and Beyond

2010 INDIANA STUDENT LEADERS SUMMITFebruary 5, 2010

$5,090,667,914

(total expenditures all public postsecondary institutions 2008-09 academic year)

Indiana’s Public Higher Education System

3

5 four-year Public Postsecondary Institutions

2 two-year Public Institutions 31 Public Campuses and 12 Instructional

Sites 407,000 Students in 2008-09 1,500 buildings worth $12B $2.3B in salary and compensation IHEs have their own:

Police, power plants, roads, utility infrastructure, hospitals, restaurants, entertainment industry, lodging, etc…

Examples of Expenditure Mix

66%

24%

7%2%

compensation & benefitsSupplies & servicesdepreciationscholarships

55%

23%

4%

17%

Purdue University

ITCCI

Sources of Revenue State Appropriations Tuition & fees

Tuition vs fees Resident & Non-resident

Grants & contracts Federal government (research) Private industry Philanthropy

Investment Income Other services

auxiliaries

Examples of Revenue Mix

37%

19%

14%

5%

25%

tuition & fees grants & contractsauxiliary enterprises otherstate appropriations

37%

8%

2%1%

52%

Purdue University

ITCCI

Sources of Ind. General Fund Revenue

47%

33%

6%

5%

10%

Sales Tax Individual Income Tax Corporate Income TaxGaming Other

Ind. General Fund Expenditures

48%

13%

13%

5%

5%

3%

14%

K-12 Higher educationMedicaidTeacher PensionsCorrectionsChild WelfareOther

State Appropriations to Public IHEs

1975

-76

1977

-78

1979

-80

1981

-82

1983

-84

1985

-86

1987

-88

1989

-90

1991

-92

1993

-94

1995

-96

1997

-98

1999

-00

2001

-02

2003

-04

2005

-06

2007

-08

2009

-10

$-

$200,000,000

$400,000,000

$600,000,000

$800,000,000

$1,000,000,000

$1,200,000,000

$1,400,000,000

state appropriations 1976 - 2011

Compound Annual Growth Rate: 4.7%

Percentage of state General Fund appropriated to IHEs

5.0%

10.0%

15.0%

20.0%

25.0%

1975-76

1976-77

1977-78

1978-79

1979-80

1980-81

1981-82

1982-83

1983-84

1984-85

1985-86

1986-87

1987-88

1988-89

1989-90

1990-91

1991-92

1992-93

1993-94

1994-95

1995-96

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2008-09

2009-10

State General Fund and PTRC Revenue Growth FY98 – FY09

Source: State Budget Agency.

Ind

ian

a’s Fisca

l Po

sition

11

FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09-10%

-5%

0%

5%

10%

15%

5.7% 5.5%

2.9%

-1.0%

-3.8%

13.4%

7.5% 7.7%

5.5%4.7%

2.4%

-4.8%

Compare State Revenue Growth with Higher Education Appropriations FY00 – FY10

State revenue forecast for FY 10 and FY 11 will be available December 2008

Ind

ian

a’s Fisca

l Po

sition

FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY 08 FY 09 FY 10-10%

-5%

0%

5%

10%

15%

2.90%

-3.00%-3.80%

13.40%

7.50% 7.50%

5.50% 5.40%4.70%

2.20%

-4.80%

8.80%

4.50%

-0.20%

0.00%0.70%

3.60%

2.00%2.80%

6.30%5.20%

-4.00%

Revenue Growth Higher Ed Appropriations

12

Higher Education Appropriations per FTE by State, 2007

Source: SHEEO SHEF, State Higher Education Finance FY2007.

Wyo

min

g

Hawai

i

New M

exico

New Y

ork

Geo

rgia

North

Car

olin

a

Mar

ylan

d

Illin

ois

Texa

s

Delaw

are

Arizon

a

Was

hing

ton

Loui

sian

a

Rhode

Isla

nd

Mai

ne

Arkan

sas

Iowa

Virgin

ia

Mississ

ippi

Sout

h Car

olin

a

Penn

sylv

ania

Ore

gon

North

Dak

ota

Sout

h Dak

ota

Color

ado

Verm

ont

$-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

Indiana

Natio

nal C

on

text

13

Higher Education Tuition, State and Local Revenue per FTE

$0

$5,000

$10,000

$15,000

$20,000

$25,000

Indiana

14

Natio

nal C

on

text

Resident UG Tuition & Mandatory Fee Charges: CAGR 1989-2011

Campus CAGR Campus CAGRIUB 7.0% PUC 6.5%IUE 6.2% PUNC 6.6%IUK 6.3% IPFW 6.9%IUN 6.3% ISU 6.6%IUSB 6.3% USI 6.1%IUS 6.2% BSU 6.9%IUPUI 6.8% VU 5.3%PUWL 7.3% ITCCI 4.0%

16

1975-7

6

1976-7

7

1977-7

8

1978-7

9

1979-8

0

1980-8

1

1981-8

2

1982-8

3

1983-8

4

1984-8

5

1985-8

6

1986-8

7

1987-8

8

1988-8

9

1989-9

0

1990-9

1

1991-9

2

1992-9

3

1993-9

4

1994-9

5

1995-9

6

1996-9

7

1997-9

8

1998-9

9

1999-0

0

2000-0

1

2001-0

2

2002-0

3

2003-0

4

2004-0

5

2005-0

6

2006-0

7

2007-0

8

2008-0

90%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Student vs. State Share of Operating Expenditures at All Indiana Public Institutions, FY76-FY07

Gross Unrestricted Student Fees State Operating Appropriations

FY07 State Share 42.6%

FY07 Student Share 57.4%

Distributing Scarce Resources

Evolution of CHE Funding Recommendations

2001 2003 2005 2007 2009

Enrollment Change (credit hours enrolled)

Enrollment Change (credit hours enrolled)

Enrollment Change (credit hours enrolled)

Enrollment Change (credit hours enrolled)

Enrollment Change (successfully completed credit hours)

Inflation Adjustments Inflation Adjustments Inflation Adjustments Inflation Adjustments

Equity Adjustment Equity Adjustment Equity Adjustment Equity Adjustment

Plant Expansion/leases Plant Expansion/leases

Program Adjustment

Research Support Incentive

Research Support Incentive

Research Support Incentive

Research Support Incentive

Change in number of degrees

Change in number of degrees

Change in On-Time graduation Rate

Change in On-Time graduation Rate

Two Year Transfer Incentive

Two Year Transfer Incentive

Low Income Degree Completion Incentive

Workforce Development Incentive (funding non-credit coursework)