Board of Trustees. Budget Update 04/13/2012

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1 Board of Trustees Budget Update 04/13/2012 1

2 Budget Objectives Building Value for Michigan Build upon status as one of world s top 100 universities, serving Michigan first Sustain land-grant mission - preserve access for talented students, prepare students to be part of a highly talented work force and provide cutting edge research and outreach, the key drivers for 21 st century prosperity Fulfill obligations of a responsible long-term steward of MSU s people, programs and facilities Assure MSU remains a best value for students and other stakeholders 2

3 MSU Context Metrics Academics, Research & Outreach 77% graduation rate up 3% in 5 years, the largest increase in the Big Ten Exceeds predicted (U.S. News) graduation rate by 15% 91% retention rate Carnegie peer median 87% 90% of seniors rated their educational experience as good or excellent Student faculty ratio 16:1, approximates Big Ten average $439M in external support, up 15% in five years 1,000,000+ outreach contacts per year 3

4 MSU Context Metrics Financial Aid Over $600M in financial aid administered, 200% increase over 10 years, general fund supported aid up 67% over five years Student debt levels beneath national averages # of Families 1,800 1,600 1,400 1,200 1, MSU Maintains Distribution of Family Income Within Student Population Year Average Families with incomes > $200,000 omitted for purposes of this analysis. Distribution represented in inflation adjusted 2011 dollars. 4

5 MSU Context Metrics Stewardship Over past five years, reengineered employee health care programs Eliminated funded post-retirement health care for new employees Incentivized use of generic drugs Capped funded health care growth at 5% per year Top 6 th percentile over 10 years for endowment performance Among the lowest energy cost and consumption patterns in the Big Ten Over $110M in reductions and cost containment efforts over 3 years 58% of expenses dedicated to core activities (Instruction, research, public service), 2 nd in the Big Ten 5

6 Appropriation What if Analysis Resident Undergraduate All Other Tuition & Note If Appropriations Tuition Fees 0% 5.0% 5.0% June 2011 Planning 1.0% 4.3% 5.0% 1.4% Governor 1.8% Senate 4.1% 5.0% Cap at 4.0% Costs $0.4K 4.0% 5.0% Cap at 3.5% Costs $1.8M 2.0% 3.6% 5.0% 3.0% 2.9% 5.0% 4.0% 2.2% 5.0% 6

7 Appropriation Analysis AgBio/MSUE Approp 3% AgBio $28.3M $0.9M MSU E $24.4M $0.7M Governor, Senate, and House recommendation each call for appropriations at levels House recommendation includes provision that could allocate an additional $1.6M (3.0%) if performance funding remains unallocated Impact of state funds are compounded by leveraging of federal match 7

8 Appropriation Analysis FRIB Governor and Senate include FRIB funding of $2.4M in in their respective recommendations Governor also includes $5.0M in House proposal shifts like amount to Department of Treasury appropriation Amounts are dedicated to pay debt service on community costshare portion of project Longer term, work to receive appropriations adequate to fund project expenditures directly instead of debt service model 8

9 MSU Planning Model Summary Budget Item June 2011* *** April 2012 State Appropriations 15% 0% 0 1.8% Tuition & Fees 6.9% 5.0% 3.5% 5.0% Financial Aid 10% 5.5% 5.5% Graduate Assistants 0% 3.0% 3.0% Faculty Salaries 2.0%** 2.0%** 2.0%** Utilities 5.0% 8% 4.0% Health Care 5.0% 5% 5.0% Surplus/(Deficit) $0 $0 $0.0 $1.5 *Preliminary budget approved by the BOT in June, 2011 **Includes 1.5% general merit, 0.5% college market, plus 1.0% provost market pool *** Appropriations and resident undergraduate tuition based upon Governor s recommendation, utilities reduced by 2.1M, entering class assumed at 7,650 9