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Higher Expectations and Fewer Resources: What’s a SHEEO to Do?. Dennis P. Jones SHEEO Annual Meeting Santa Fe, NM July 17, 2009. The Expectation. “By 2020, America will once again have the highest proportion of college graduates in the world” President Barack Obama, February 24, 2009. - PowerPoint PPT Presentation
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National Center for Higher Education Management Systems3035 Center Green Drive, Suite 150Boulder, Colorado 80301
Higher Expectations and Fewer Resources:What’s a SHEEO to Do?
Dennis P. JonesSHEEO Annual Meeting
Santa Fe, NMJuly 17, 2009
The Expectation
“By 2020, America will once again have the highest proportion of college graduates in the world”
President Barack Obama, February 24, 2009
slide 2
slide 3
Current Annual Degree Production – 2,252,212
Additional Annual Degree Production Needed – 150,528 per Year
Associate and Bachelors Degrees Needed to Become the Most Educated Country by 2020
Increase in State and Local Funding at Current Cost per FTE
Note: Assumes private institutions will maintain current share
The “Gap” - Difference in Annual Degrees Currently Produced and Annual Degrees Needed to Meet
Benchmark
Source: U.S. Census Bureau, PUMS and Population Projections, IPEDS Completions Survey 2004-05
Accounting for MigrationU.S. = 781,301 (a 52.8% increase in the public sector)29,190
28,84628,582 25,227
24,87224,37423,77723,424
21,467 16,21415,34314,47714,45514,43414,14414,09013,67512,82612,07311,94310,78810,410
9,4658,811
6,9486,9416,054
4,2624,2323,7263,639
2,392
1,551 959950 411290
-719 -2,122-3,195-3,372-4,028 -8,768 -11,369
7698
-18,389
1,944
-20,000
-10,000
0
10,000
20,000
30,000
40,000
TexasC
al if orn iaFlor id aArizonaG
eorgi aN
or th Caro lin a
TennesseeO
hi oN
evadaLouisi anaN
ew Jersey
Mi chiga n
KentuckyArkansasSout h C
ar oli naAlab am
aIndi anaW
a shingtonVir gi niaPennsyl vani aO
regonW
i sconsi nM
aryla ndIl lin oisM
i ssissi ppiO
kl ahoma
Mi ssour i
New
Mexico
We st V
i rgi niaIdahoAlaskaC
onne cti cutM
ai neH
awaii
Montana
Wyo m
i ngKansasD
el awar e
New
Ham
p shir eM
i nnesot aSout h D
akotaVer m
o nt131,749
94,162
140,533N
orth Dakota
Nebraska
Iowa
Rhode Island
Utah
New
York
Colorado
Massachusetts
slide 4
THE FISCAL REALITIES
slide 5
Expenditures on Tertiary Educational Institutions as a Percentage of GDP, by Source of Fund (2004)
*Some levels of education are included with others**Including public subsidies to households attributable for educational institutions, as well as including direct expenditure on
educational institutions from international sources.***Net of public subsidies attributable for educational institutions. Source: OECD.
Expenditures
slide 7
Annual % Budget Increase, Fiscal 1979 to Fiscal 2009
*32-year historical average rate of growth is 5.9 percent **Fiscal 09 numbers are estimated
***Fiscal 10 numbers are recommended Source: NASBO June 2009 Fiscal Survey of States
Combined Budget Gaps of $230B
slide 8
*Only 24 states have forecasted FY 2011 budget gaps to date
37 states
24 states
For most states – and for most public institutions – the stimulus package is not an
answer.• But it could slow the impact
• And it could buy enough time to adjust to substantially changed circumstances
slide 9
After stimulus wanes, gaps could approximate 4% of spending, or $70 billion, even under the “Low-Gap”
Scenario
Source: Don Boyd (Rockefeller Institute of Government), 2009slide 10
After stimulus wanes, gaps could approach 7% of spending or $120 billion under the “High-Gap”
scenario
Source: Don Boyd (Rockefeller Institute of Government), 2009slide 11
Projected State and Local Budget Surplus (Gap) as a Percent of Revenues, 2016
slide 12 Source: NCHEMS; Don Boyd (Rockefeller Institute of Government), 2009
State Tax Capacity and Effort—Indexed to U.S. Average
Source: State Higher Education Executive Officers (SHEEO)
AL
AK
AZ
AR
CACO
CT
DE
GA HI
IL
IN IA KS
KYLA
ME
MD
MA
MS
MT
NE
NV
NJ
NY
NC
ND
OH
OK
PARI
SC
SD
UT
VT
VA
WA
FL
IDMI
MN
MO
NH
NM
TNTX
WV
WI
WY
0.6
0.7
0.8
0.9
1.0
1.1
1.2
1.3
1.4
1.5
1.6
1.7
0.6 0.8 1.0 1.2 1.4
State Tax Capacity (Total Taxable Resources Per Capita)
State Tax Effort (Effective Tax Rate)
US
OR
Slide 13
THE DEMOGRAPHIC REALITIES
slide 14
The big population growth will be in students of color. In the main these will be individuals of
modest means.Therefore there are real limits as to how high tuition can
go before price affects participation and completion.
slide 15
Change in Population Age 25-44 By Race/Ethnicity, 2005-2025
Source: U.S. Census Bureau
slide 16
…2,689,700…1,044,516
Difference Between Whites and Next Largest Race/Ethnic Group in Percentage of Adults Age 25-
34 with an Associate Degree or Higher, 2000
35.8
19.3
1.4
0
10
20
30
40
Colorado
California
Connecticut
Nebraska
South D
akotaN
ew Y
orkM
assachusettsN
ew Jersey
Kansas
Rhode Island
TexasN
orth Dakota
Washington
Arizona
Alaska
Utah
IllinoisIow
aW
isconsinO
regonM
innesotaN
ew M
exicoIdahoV
irginiaN
evadaM
ontanaP
ennsylvaniaM
arylandW
yoming
Delaw
areU
nited States
Michigan
South C
arolinaN
ewN
orth Carolina
Mississippi
LouisianaG
eorgiaM
issouriO
hioA
labama
IndianaA
rkansasFloridaTennesseeK
entuckyV
ermont
Oklahom
aM
aineW
est Virginia
Haw
aii
Source: U.S. Census Bureau, PUMS (based on 2000 Census)
Family Incomes of Families with School Age Children
slide 18
Source: American Community Survey
Expectations
• Maintain access – serve an increasing number of students
• Maintain affordability to both students and the state
slide 19
Invest stimulus funds in:• Developing more cost-effective ways of
doing business• Paying for the transition
Short-Term Actions
• Reallocate faculty time to undergraduate courses and away from– Administrative and committee work and other activities
for which release time is granted– Undersubscribed graduate programs that cannot be
justified by regional labor market needs– Non-sponsored research
• Collaborate with other institutions – share– Academic programs– Administrative services
• Make sure that students are receiving all aid for which they’re eligible
slide 20
Longer Term Strategies – Mission Focus
Refocus on the institutional mission – serving state and student needs rather than institutional
aspirations– Eliminate small, non-core programs – close low-demand,
high-cost programs that aren’t distinguished and can’t be justified by labor market needs
– Re-think institutional aid – focus on removing barriers to attendance rather than competing for students whose college participation is not in question
slide 21
Longer Term Strategies
Make investments in more efficient administration and plant operations
– Retrofit building for energy efficiency– Reengineer business processes– Renegotiate relationships with the state (invest in a
Policy Audit with an eye toward restructuring state administrative and reporting requirements)
slide 22
Longer Term Strategies
Invest in reengineering curricula and delivery methods– Restructure general education
• Fewer options• More large enrollment courses• More courses that can be taught by faculty from multiple
disciplines– Invest in course redesign– Tackle developmental education on a statewide basis
• Common standards• Modularized• Technology enhanced
slide 23