Budget Development 2011 12 and 2012 132011-12 and 2012-13

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2011 12 d 2012 132011-12 and 2012-13MSU Budget Planning Objectives

• 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 forprovide cutting edge research and outreach, the key drivers for 21st century prosperity

• Assure MSU remains a best value for students and other stakeholders

• Fulfill obligations of a responsible long-term steward of MSU’s people, programs and facilities

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C t tContext• Operates with among the lowest tuition and appropriation per

student ratio in the Big Ten (currently next to last)

• Ranks 1st or 2nd in the Big Ten for proportion of expenses related t i t ti h d bli ito instruction, research, and public service

• Current student faculty ratio: 16-1, approximates Big Ten averageaverage

• Lowest total unit cost for energy in the Big Ten

• Most efficient in the Big Ten for maintenance and grounds staffing; second most efficient for custodial staffing

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C t tContext• $495M in total contracts for 2009-10, up $90M from previous year$495M in total contracts for 2009 10, up $90M from previous year

including approximately $36M in ARRA sponsored awards

• Second to last in the Big Ten for number of students per employee

• Top 2 percent within Cambridge comparisons of institutional investment earnings over 10 years

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Sh i th F tShaping the Future• MSU is positioning itself to impact big societal issues – the availabilityMSU is positioning itself to impact big societal issues the availability

of food, water supply, energy, health, education, and others

• To do so, it is necessary to commit to ever increasing levels of efficiency and effectiveness as well creativity and vision

• MSU’s focus is to better support the functions and programs that will position the institution to assist communities in Michigan and around the world

Reductions including $50M 40 academic programs impacted 350• Reductions including $50M, 40 academic programs impacted, 350 fewer employees, altered benefits programs and forgone salary increases have all been referenced – it is critical to highlight changes that position MSU for the future

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that position MSU for the future

Shaping the FutureShaping the FutureAreas of Accomplishment

Academic • College wide curricular innovations

G d t d ti• Graduate education

• Faculty cluster hires

• Scalable global on-line program initiatives

• Implementation of service centers in colleges and academic unitsImplementation of service centers in colleges and academic units

• Strategic expansion of COM and CHM

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• Enhanced focus on student learning outcomes and assessment

Sh i th F tShaping the FutureAreas of Accomplishmentp

Student Services• Restructuring of comprehensive student services model

• Implementation of neighborhoods

E id d b d t t i f t d t d i• Evidenced-based strategies for student academic success

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Sh i th F tShaping the FutureAreas of Accomplishmentp

Research• Investment in selected research themes

• Increase in Federally funded grants

• Increase in large-scale, collaborative research projects

• Energy conservation and sustainability

• Expansion/repurposing of instructional and research space• Expansion/repurposing of instructional and research space

• Undergraduate research

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• Research infrastructure

Sh i th F tShaping the FutureAreas of Accomplishmentp

University Wide• Expansion of need-based financial aid

• Restructuring of MSUE and MAES (now AgBioResearch)

• Diversity

• Energy conservation

• New bylaws academic freedom report• New bylaws, academic freedom report

• Contract with non-tenure faculty

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Reduced State SupportReduced State Support• State appropriations support cut by 15% for 2011-12• Reduced $81M, or 25% since 2001, lags inflation by $174M• State financial aid and capital outlay support also cut 450,000,000

350,000,000

400,000,000

CPI Adjusted Appropriations

300,000,000

Actual Appropriations$80.9M25%

$174.4M54%

200,000,000

250,000,00025%

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00‐01 02‐03 04‐05 06‐07 08‐09 10‐11

Over the last five years, Michigan ranks 48th among the states in changes to appropriations, and currently trails national appropriation per student levels by 18 percent.

Responding to Adverse CircumstancesResponding to Adverse Circumstances• MSU has imposed operating reductions of $123M since 2000-01• An additional $43M has been reallocated to fund new

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programmatic investments

‐$15

‐$10

‐$5

‐$30

‐$25

‐$20

‐$40

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Reduction Reallocations$ in millions

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A L W kf• Over the last two years, MSU operating with 350 less full-time

equivalent employees

A Leaner Workforceq p y

• MSU maintains approximately 100 open positions annually• Reductions made in concert with changes to operational

processes, maintained quality across institutional functions

‐20

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F lt & St ff C ti• Faculty salaries lag Big Ten average• All regular employees agreed to: Forgo one cycle of wage

Faculty & Staff Compensationg p y g g y g

increases, 10% reduction in health care costs, 5% cap on annual increases, and elimination of MSU funded post-retirement health care benefits for new hires

$137,293 

$117,295 

$108,112  $106,619  $105,539 $99,923  $99,732  $99,622  $99,159  $98,239  $97,586 

$92,003 $100,000 

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S i Mi hi ’ St d tServing Michigan’s Students • Serving 3,800 more students since 2000• Enroll 17% of Michigan’s students, 84% of undergraduates from g , g

Michigan• Graduation rates, persistence rates, GPA and ACT scores all up

over 10 years

47,131

46,00047,00048,000

43,36643,00044,00045,000

41,00042,000

Fall  Fall  Fall  Fall  Fall  Fall  Fall  Fall  Fall  Fall  Fall 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

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Strong Preparation and PerformanceStrong Preparation and Performance• Entering class continues trend of strong academic preparation

GPA 3.61 – Up from 3.48 ten years ago

SAT 1,132 – Up from 1,123 ten years ago

ACT 25.4 – Up from 23.9 ten years ago

New honors college enrollments – 493 – Up from 422 ten years agoNew honors college enrollments – 493 – Up from 422 ten years ago

• 6 year graduation rate 77% -- up from 64% ten years ago

• Freshman to sophomore persistence rate 91% -- up from 87% ten years ago

• Time to degree 4.21 years -- down from 4.36 ten years ago

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MSU P St d t AMSU Preserves Student Access• 74% of students from households with incomes less than $125,000• 75% of students receive some form of aid

1600

• 24% of undergraduates receive a Pell grant• General fund aid up 300% over decade, exceeds $100M in 2011-12

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Appropriations & Tuition Per StudentAppropriations & Tuition Per StudentBig Ten

Tuition Appropiration TotalU of M $18,361 $8,335 $26,695Minnesota $11,436 $14,594 $26,030Iowa $12,613 $11,427 $24,040OSU $14,305 $8,458 $22,763Illinois $14,564 $6,649 $21,213Indiana $14,198 $6,332 $20,530Purdue $13,962 $6,464 $20,426MSU $13,576 $6,818 $20,394

If MSU approximated the Big Ten average for non-resident students, it would receive an additional $85M annually

Wisconsin $9,318 $9,318 $18,636

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would receive an additional $85M annually

MSU Creating 21st Century KnowledgeMSU Creating 21st Century Knowledge• Research funds up 90% over 10 years• Numerous MSU partnerships and initiatives impact the state

i ifi tleconomy significantly • MSUE and AgBio Research reorganized and streamlined to build

upon their roles as key economic partners$600,000,000

$495,474,000$500,000,000

$600,000,000

$262,413,915

$300,000,000

$400,000,000

$100,000,000

$200,000,000

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2000‐01 2001‐02 2002‐03 2003‐04 2004‐05 2005‐06 2006‐07 2007‐08 2008‐09 2009‐10

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Budget Highlights FY10 through FY13Budget Highlights FY10 through FY13• MSU multi-year planning anticipated substantial state reductions

and reacted earlyand reacted early

• MSU reduced operating expenditures by 10 percent, or approximately $50 million; employee counts are down by 350approximately $50 million; employee counts are down by 350 people over the past two years

• Health Care expenditures were reduced by 10 percent, future p y p ,increases capped at 5 percent, and retiree health benefits eliminated for new employees

• Employees gave up one year of salary increases

• Initiated long-term energy plan intended to guide campus for next d ddecade

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Budget Highlights FY10 through FY13Budget Highlights FY10 through FY13

• Increased tuition in FY11 by 4 9 percent suspended half of the• Increased tuition in FY11 by 4.9 percent, suspended half of the increase for Fall and Spring Semesters only, to provide students and families time to plan

• For FY12 tuition is proposed to increase by 6.9 percent, approximately 4.7 percent necessary for operations and the remainder to sustain quality including student-faculty ratioq y g y

• Financial Aid budgets have increased by 30 percent over the past two years and are proposed to increase by an additional 10 percent in FY12

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MSU Budget PlanningMSU Budget Planning Budget Item 2009‐10 2010‐11 2011‐12* 2012‐13

State ‐3.1% ‐0.4% ‐15% 0.0%Appropriations

Tuition & Fees 5.2% 5.0% 6.9% 5.0%

Financial Aid 17% 13% 10% 5.5%

GraduateAssistants

2.75% 2.5% 0% 2.0%

Faculty Salaries 2.0% 0%** 2.0%*** 2.0%***

Utilities 5.0% 5.0% 5.0% 8.0%

Health Care 5.0% ‐5.0% 5.0% 5.0%

Reductions ‐4.0% ‐6.0% ‐0.5% 0.0%

* Preliminary budget approved by the BOT in June 2010 Preliminary budget approved by the BOT in June, 2010** 0% general merit pool, 1% market pool***Includes 1.5% general merit, 0.5% college market, plus 0.5% provost market pool

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