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Higher Education Funding in Indiana: The Role of the Indiana Commission for Higher Education. Trustees Academy August 30, 2010 Indiana Commission for Higher Education. Contextual Information. Indiana’s Public Higher Education System. 5 four-year Public Postsecondary Institutions

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Higher Education Funding in Indiana: The Role of the Indiana Commission for Higher Education

Trustees Academy

August 30, 2010

Indiana Commission for Higher Education


Contextual Information


Indiana’s Public Higher Education System

  • 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


Contextual Information

Total FY 10 estimated expenditures by all Indiana public postsecondary institutions

$5,090,667,914

Total FY 10 General Fund estimated expenditures by all Indiana public postsecondary institutions

$3,487,676,807


State Operating Appropriations to Public postsecondary institutions

Compound Annual Growth Rate: 4.7%


State General Fund Expenditures by FunctionFY 2010

Source: State Budget Agency (note: includes all Higher Educ. expenditures)


Indiana Commission for Higher Education

Role in Developing the State Higher Education Budget


Overview of the State Budget Process

  • CHE and State Budget Agency issue budget instructions to the public postsecondary institutions each biennium

  • Institutions submit formal budget requests to the state

  • CHE compiles and reports the institutional budget requests

  • CHE issues budget recommendations to Governor and General Assembly

  • Governor issues budget recommendations to General Assembly

  • CHE staff works with legislative staff during legislative session to help craft the budget


State Appropriations to Higher Education FY 2009-2011

$ in millions

Note: not all appropriations were released; some state appropriations were replaced with federal stimulus funds


Cumulative Change in State Appropriations by Function FY00 – FY 11

159%


CHE Funding Recommendations

  • Informed by Reaching Higher: Strategic Directions for Higher Education in Indiana

  • Recognizes that by law independent boards of trustees for each public institution with responsibility for the soundness of that institution

  • Indiana needs a comprehensive, integrated and complimentary system of higher education

  • Focus areas of reaching Higher include:

    • College Preparation

    • Affordability

    • College Completion

    • Economic Development


CHE Responsibilities Related to Higher Education Budget

  • Make recommendations for state appropriations to higher education

    • Institutional appropriations

    • Capital projects and R&R

    • State Student Financial Aid

    • Non-Binding tuition targets

  • Post budget responsibilities

    • Review certain expenditures

    • Review certain capital projects

    • Make recommendations on budget reductions (when necessary)


CHE Recommendations for Campus Operating Appropriations

  • Fungible dollars appropriated to the institutions

  • Appropriations are made to individual regional campuses; one appropriation to ITCCI

  • Generated through (an evolving) collection of formulae

  • Performance funding policies


Evolution of CHE Funding Recommendations


Capital Projects

  • Requested by institutions with no restrictions

  • Only exception is a formula to generate R&R appropriations

  • CHE makes capital project recommendations

  • Capital projects may be:

    • State funded, requires General Assembly authorization

    • Non-state funded, sometimes requires General Assembly authorization

    • Cash funded

    • Authorized to issue debt – debt may or may not be repaid by the state

  • Includes projects:

    • New construction

    • Repair or renovation

    • Infrastructure


Historical Cap Projects requests, CHE recommendations and ASPassed

Note: GA approvals have exceeded CHE recommendations by $930M


CHE Review of Capital projects

  • Certain capital projects require state review and approval

  • CHE REVIEWS and makes recommendations on capital projects that have been requested by the institutions

  • Statutory review depends on many things, including:

    • Type of project

    • Total cost of the project

    • Source of project funding

  • After CHE recommendation, projects move to State Budget Committee, State Budget Agency, Indiana Finance Authority and Governor


Student financial aid

  • A very complex, but important issue to affordability

  • Financial aid comes from many sources, but chiefly:

    • Federal government

    • State appropriations (SSACI)

    • Institutional aid

    • Private foundations/owners/employers

  • Financial Aid study jointly undertaken by CHE and SSACI to be presented in September to State Budget Committee

    • Aligning financial aid policy with state higher policy: particularly college completion

    • Recognizing the “new normal” student – majority of financial aid applicants are “non-traditional students with different types of needs and require a new approach to financial aid policy


The General Assembly makes final determination

  • CHE makes recommendations

  • The Trustees by statute have virtually all of the decision making power and responsibility for institutional budgets and administration

  • The General Assembly is always free to accept, modify or reject the CHE recommendations

  • CHE must work with institutional staff, the legislature, other parts of state government and other stakeholders

  • CHE recommendations are almost never adopted to the dollar, but the General Assembly has always passed higher education budgets based on Commission recommended policies


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