2014-15 SUNY Operating and Capital Budget Requests

Finance and Administration Committee November 14, 2013Fashion Institute of Technology

Economic Environment

2014/15 2015/16 2016/17 $- B

$0.5 B

$1.0 B

$1.5 B

$2.0 B

$2.5 B

$3.0 B

$3.5 B

$1.7 B

$2.9 B $2.9 B

Projected State Budget Gaps

State Budget1 $93.8B $98.2B $101.5B

1 Excludes capital, federal, and off-budget items2 Excludes State paid fringe benefits, debt service, and State funded grant programs (TAP)

2

2010/11 2011/12 2012/13 2013/14 -

$0.2 B

$0.4 B

$0.6 B

$0.8 B

$1.0 B

$1.2 B

$1.4 B

$1.6 B

$1.8 B

$2.0 B $1.8 B $1.7 B $1.7 B $1.7 B

Annual Direct State Tax Support for SUNY2

$84.4B $87.2B $88.8B $90.7B

Economic Environment

Debt Cap $37.7B $39.4B $41.2B $42.8B

Room Rem. $ 4.1B $ 3.6B $ 3.6B $ 2.4B

2010/11 2011/12 2012/13 2013/14 -

$100.0 M

$200.0 M

$300.0 M

$400.0 M

$500.0 M

$600.0 M

$700.0 M

$800.0 M

$900.0 M

$572.0 M $582.0 M

$852.0 M

$187.0 M

Annual Direct Capital Appropriations for SUNY

3

2013/14 2014/15 2015/16 2016/17 2017/18 $- B

$10.0 B

$20.0 B

$30.0 B

$40.0 B

$50.0 B

$60.0 B

$40.4 B $43.6 B $46.5 B $48.9 B $50.7 B

$2.4 B $1.4 B

$0.8 B $0.7 B $1.5 B

$42.8 B $45.1 B $47.3 B $49.6 B $52.1 B

Outstanding Debt and Room Left Under Statutory Debt Cap

Outstanding Debt Remaining Cap Room

2014-15 SUNY Operating Budget Request

November 14, 2013

2014-15 Operating Budget Request

Sector / Area 2013-14 Enacted State Tax Support

Self-Generated Revenue

2014-15 Budget Request $ Change % Change

State-operated Campuses 841.9$ 94.2$ -$ 936.2$ 94.2$ 11.2%Tuition Revenue 1,573.2 - 95.0 1,668.2 95.0 6.0%General State Charges (Fringe benefits) 213.0 15.8 - 228.8 15.8 7.4%General IFR 837.8 - - 837.8 - 0.0%State Univ. Tuition Reimbursable (SUTRA) 151.9 - - 151.9 - 0.0%Stabilization - - 15.0 15.0 15.0 *Dormitory Operating 343.4 - - 343.4 - 0.0%

State-operated Subtotal 3,961.2$ 110.0$ 110.0$ 4,181.2$ 220.0$ 5.6%

Statutory Campuses 129.3$ 7.2$ -$ 136.5$ 7.2$ 5.6%Cornell Cooperative Extension 4.2 2.2 - 6.5 2.2 53.2%

Statutory Subtotal 133.5$ 9.4$ -$ 143.0$ 9.4$ 7.1%

Community Colleges 472.1$ 30.9$ -$ 503.0$ 30.9$ 6.5%

Direct Hospital Support 60.0$ 30.0$ -$ 90.0$ 30.0$ 50.0%Hospital Operating 2,839.5 - (267.5) 2,572.1 (267.5) -9.4%Hospital Sponsored Programs 100.0 - - 100.0 - 0.0%Long Island Veterans Home 44.1 - 0.8 44.9 0.8 1.8%

Hospital Subtotal 3,043.6$ 30.0$ (266.7)$ 2,807.0$ (236.7)$ -7.8%

Grand Total 7,610.4$ 180.3$ (156.7)$ 7,634.1$ 23.7$ 0.3%* 2013-14 was Year 2 of the SUNY Stabilization Account Two Year Appropriation made in 2012-13.

As per State Finance Law, 2014-15 would be the first year of the new two year appropriation.

($ millions)

5

6

State-operated / Statutory Campuses• State-operated Campuses: $220.0M net increase

• $94.2M State tax support for contractual costs / initiatives• $15.8M State tax support for fringe benefits• $95.0M Rational Tuition Spending Authority• $15.0M Stabilization appropriation

– State funding request focuses on costs to continue / key initiatives to improve SUNY operations and support mission

• $98.0M: Contractual salary costs / fringe benefit costs• $ 6.0M: Open SUNY – Strategic Enrollment Growth Program• $ 4.0M: SUNY Innovators Program• $ 2.0M: Expanded U-Wide Flexibility and Support for Initiatives

• Statutory Campuses: $9.4M net increase– Funding request provided by Statutory campuses

7

Rational Tuition Plan: Year Four of Five

Maximum Tuition Rate Inc. % Enrollment % Revenue

Resident Non-

Resident Resident Non-

Resident Resident Non-

Resident Undergrad at Centers $300 10.00% 25.97% 4.64% 18.98% 9.89%Undergrad at Comp/Tech $300 5.00% 52.48% 3.02% 38.35% 5.45%

Graduate $500 10.00% 6.74% 3.00% 8.28% 6.84%

MBA 9.00% 10.00% 0.57% 0.15% 0.86% 0.37%Masters of Social Work 9.00% 10.00% 0.54% 0.02% 0.73% 0.04%Masters of Architecture 9.00% 10.00% 0.04% 0.02% 0.05% 0.04%

Physicians Assistant 9.00% 20.00% 0.07% 0.04% 0.09% 0.09%Law 9.00% 10.00% 0.31% 0.03% 0.86% 0.13%

Pharmacy 9.00% 10.00% 0.23% 0.03% 0.64% 0.15%Medicine 9.00% 5.00% 1.29% 0.07% 5.18% 0.50%

Dentistry 9.00% 10.00% 0.26% 0.04% 0.91% 0.30%Optometry 10.00% 10.00% 0.15% 0.03% 0.40% 0.15%Physical Therapy / Nursing Practice 9.00% 10.00% 0.26% 0.02% 0.64% 0.08%

Enrollment based on FTE

8

PA MI MA VA OH CA TX SUNY FL $-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$7,468

371

$12,802

$11,600

$10,792$10,366

$9,906

$9,037$8,522

$7,839

$6,336

Proposed Annual 2014-15 SUNY Resident Undergraduate Tuition / Fees vs. 2013-14 Selected Peer State Rates

2013-14 Tuition and Fees Proposed 14-15 Tuition / Fees Increase

$9,485: Middle States Average

$8,893: US Average

9

Community Colleges• Total Request: $30.9M net increase

– $ 34.9M: $250 / FTE Base Aid Increase– $ 7.8M: FIT upper division / grad. chargeback– $ 3.0M: Increase Job Linkage Program– $(14.9M): Lower State support need due to enrollment

decrease• Funding:

– Focuses on increasing State share of CC costs– Facilitates implementation of chargeback methodology– Maximizes community / business relationships

10

Hospitals• Total Request: $(236.7M) net decrease

– $30.0M in new State tax support• Returns State tax funding to 2012-13 Enacted levels

– $(267.5M) in reduced spending authority • Reflects Downstate restructuring and adjusting for historically

unspent revenue based appropriation authority– $0.8M spending authority for Long Island Veterans Home

• Items for further discussion:– Operational structure and flexibility– Alternative flow of funds to the medical schools

11

Summary of Capital Plan & Budget Request2014-15 Capital Plan & Request

(in millions)

Program*2014/15 Request

2014/15 Plan Need

5-Year Request

5-Year Plan Need Appropriation Type

Educational Facilities $750.0 $2,680.0 $3,750.0 $8,560.0 BondedHospitals 600.0 600.0 1,205.0 1,205.0 Bonded, Debt RepaidResidence Halls 50.0 50.0 250.0 250.0 Hard Dollar, Self PayCommunity Colleges 91.0 134.0 575.0 575.0 Bonded, 50% State

ShareSUNY-Wide Capital Initiatives:

Transformational Information Technology Initiative

189.0 189.0 189.0 189.0 Bonded

Research Initiative 200.0 200.0 200.0 1,587.0 Bonded, Competitive Based

Energy Initiative 100.0 100.0 100.0 100.0 50% Bonded, 50% DryTotal $1,980.

0$3,953.0 $6,269.0 $12,466.

0

*Request includes reappropriations totaling $4.7B in support of all four programs and an appropriation to support campus-funded capital projects of $100M.

Educational Facilities• SUNY 5-year Capital Plan project needs

have been scaled back from $8.56B to $3.75B, funding only critical maintenance components.

– Excludes funding for new facilities.

• Annual bonded investment of $750M in bond-financed State support will:

– Maintain progress made in reducing SUNY’s critical maintenance backlog since 2007

– Advance major portions of the present Capital Plan.

• Requested funding will:– Fund critical life safety projects, – Ensure that buildings

are in compliance with current building codes, and

– Stabilize / modernize deteriorating infrastructure.

2014-15 2015-16 2016-17 2017-18 2018-190%

2%

4%

6%

8%

10%

12%

14%

16%

$0

$100

$200

$300

$400

$500

$600

$700

$800State Investment Reduces

Critical Maintenance Backlog

Reduction in FCI w/InvestmentGrowth in FCI w/o InvestmentFa

cilit

y Co

ndit

ion

Inde

x =

Ba

cklo

g ÷

Repl

acem

ent

Val

ue

$ in

Mill

ions

Annual State Investment Requested

Industry Standard: 5% FCI

69%

14%

10%

7%

Project Type

Major Rehab

Building Stabi-lization

Infrastructure Stabilization

Life Safety

47%

14%

14%

12%

5%4% 3%

Project UseInstructionalInfrastructure, MCM, etc.Student Life / ServicesResearchInstitutional SupportLibraryGeneral Admin-istration

12

13

Hospitals• $600M in (repaid) bonded funding requested. • SUNY hospitals have not received bonded

funding since 2008, with UMC and SB largely exhausting available funding.

• Lack of new funding endangers maintaining safe and modern facilities, ensuring patient safety, and meeting accreditation requirements.

• This level of funding is essential as full project funding is required by State regulatory process governing construction, renovation and major medical equipment acquisitions of health care facilities.

• Although appropriations must be in place to facilitate capital planning, actual spending from the appropriations occur at a slower pace.

• To better align capital funding with the health care planning process, ensure continuous access to capital, and remove hospital debt from the State debt cap calculation, it is recommended that an alternative financing structure be explored.

Downstate Stony Brook Upstate$0.0

$50.0

$100.0

$150.0

$200.0

$250.0

$300.0

$350.0

$297.7 $321.6 $324.7

$155.9

$4.6 $7.4

Hospitals in Need of New Fund-ing

No New Funding Provided Since 2008

Total Appropriations Uncommitted Appropriation Remaining

$ in

Mil

lion

s

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Residence Halls• $250M ($50M/Year for 5-Years and consistent with current State Financial Plan) is requested

in hard dollar (pay-as-you-go) support to support small maintenance and repair projects.

• The residence hall bonding program was restructured in 2013/14 such that future debt issuances are eliminated from the State debt cap calculations as well as the need for future capital bonded appropriation. Although the restructuring of the program provided significant relief to the State under the constraints imposed by the debt caps, that benefit did not accrue to SUNY’s remaining bond-financed capital programs. 

• A bond limit of $944M was established for the bond-financed portion of the program for the next five years, which is sufficient to meet the $744M in demand reflected in the most recent campus capital plans.

• The September 2013 bond sale ($440M) issued $175M in bonds to progress more than 100 projects over the next 12-15 months and refunded prior resolution bonds and instantly generated an additional $265M in debt cap capacity for the entire State.

• In 2014/15 additional bonds of $175M are expected to be issued to finance new and existing capital projects.

15

Community Colleges• $91M request reflects State share of

community college projects which have local sponsor resolutions in place.

• $134M in projects have been initially planned by the Colleges for 2014/15.

• $45M worth of projects have not received local sponsor support to-date and will be shifted to subsequent years,

• This leaves the requested amount of $91M. • The requested amount will support:

– 37 critical maintenance and health and safety projects.

– 29 renovation with critical maintenance components projects and 3 new facilities.

49%

22%

18%

7% 3%

Project Type

Major Rehabilitation / New Academic or Student Life Facil-ityBuilding StabilizationEconomic / Workforce Devel-opmentLife SafetyInfrastructure Stabilization

44%

22%

15%

13%

5%0%

Project Use

InstructionalLibrary

Support ServicesStudent Life

Student Life/ServicesAdministration

16

Other SUNY-Wide Capital Initiatives•Transformational Information Technology Initiative: A total of $189M is requested to support the infrastructure necessary to support several System-wide academic, research and operational initiatives. Open SUNY

Student Access, Completion and Success ($93M): SUNY Recruitment and Application Processing System, SUNY-wide student identity tracking and management, seamless student information system, degree planning system, course equivalency system, academic data integration system, data warehousing and decision support system, Open SUNY Student Access Platform, student internship and experiential learning management system, student ePortfolio system, next generation SUNY classrooms, open digital library and content system.

Operational EfficiencySUNY Electronic Procurement Platform ($10M): Establish an electronic procurement system, transaction processing center, and strategic sourcing, potentially producing annual savings of $100M.SUNY Shared Data Centers and Telecom ($33M): Shared regional data centers, network operation center, and security operation center, reducing number of data centers from hundreds to six. Creating SUNY-wide, cloud-based unified communication and reducing telecom costs by 25%.SUNY Self-Service Platform ($4M): Self-service functions for HR, financial, and other operational transactions, reducing administrative expenses.

Research, Innovation and Economic DevelopmentSUNY Collaboration Platform ($22M): SUNY-wide Intranet SUNY Blue, portal for networks for excellence, and telepresence video conference network. Will reduce communication and travel costs and enable widespread collaboration for research and innovation.SUNY Knowledge Center ($27M): Housed at University of Albany, shared by 64 campuses, this Center includes high performance computing facilities and smart data transport and storage optimized to support large scale data analysis and decision support, shared by SUNY-wide communities of researchers for algorithm design and data visualization, stimulating and supporting SUNY’s research growth of over $500M in the next 10 years.

17

Other SUNY-Wide Capital Initiatives (Continued)

• SUNY Research Initiatives: A total of $200M is requested to provide seed funding for a new competitive program to select projects that will enable SUNY to further advance its goal of doubling the amount of sponsored research System-wide over the next five years.

• Energy Initiative: A total of $100M is requested (50% State-funded / 50% “dry”) to support energy efficiency projects and enable campuses to significantly reduce their energy usage. The dry portion of this program could be supported by grants or loans from entities such as the New York Power Authority.

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Resident Undergraduate Tuition Rates 2010/11 - Projected 2015/16

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16Actual Projected

$-

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$4,970 $5,270

$5,570 $5,870

$6,170 $6,470

Rational Tuition Period

20

Non-Resident Tuition Rates at the Four SUNY University Research Centers

2010/11 – Projected 2015/16

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16Actual Projected

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$13,380

$14,720 $16,190

$17,810

$19,590

$21,550

$13,380 $14,720

$16,190

$17,810

$19,590

University at Buffalo / Stony Brook University University at Albany / Binghamton University

Rational Tuition Period

21

SUNY Enrollment Weighted Average In-State Tuition and FeesProposed 2014-15 SUNY vs. 2013-14 NY Private Schools

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$7,468371.361676292458

$49,138 $47,890 $46,785 $46,380 $46,370 $46,269 $46,165 $46,080 $46,040 $45,724

$34,008$30,500

$13,236

$7,839

2013-14 Tuition and Fees Proposed Increase