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Faculty Leadership Conference Revenue Forecast Report and Budget Update

Faculty Leadership Conference Revenue Forecast Report and Budget Update. Bernard M. Hannon Senior Assoc Commissioner & CFO April 23 , 2010. INDIANA’S HIGHER EDUCATION SYSTEM AND STATE FUNDING. Total FY 10 estimated expenditures by all Indiana public postsecondary institutions

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Faculty Leadership Conference Revenue Forecast Report and Budget Update

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  1. Faculty Leadership ConferenceRevenue Forecast Report and Budget Update Bernard M. Hannon Senior Assoc Commissioner & CFO April 23, 2010

  2. INDIANA’S HIGHER EDUCATION SYSTEM AND STATE FUNDING

  3. 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

  4. 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

  5. State Operating Appropriations as % of Institutional Expenditures

  6. State Income—By Source Approximately $13 billion per year

  7. State Expense—By Source

  8. Percentage of state General Fund appropriated to IHEs

  9. State Appropriations to Public IHEs Compound Annual Growth Rate: 4.7%

  10. State General Fund Appropriations to Higher Education Total appropriations include: SSACI, capital and line item appropriations

  11. HIGHER EDUCATION STATE FUNDING NATIONAL CONTEXT

  12. FY 2009 State Appropriations per FTE U.S. Avg. $6,934

  13. FY 2009 Net Tuition Revenue per FTE

  14. FY 2009 Total Educ. Revenue per FTE

  15. 2009 Tax Revenue per Capita

  16. 2009 Total Taxable Resources per Capita* *Total Taxable Resources per capita from U.S. Treasury Department: www.treas.gov/offices/economic-policy/resources/estimates.html

  17. Indiana per Capita Income as Percentage of U.S. Average

  18. Higher Education Appropriations per $1,000 of Personal Income

  19. State Revenue Performance

  20. State General Fund Revenue Growth Note: FY 10 and FY 11 per December 2009 Revenue Forecast

  21. Revenue Growth and Higher Education Appropriations 2000-2011

  22. State Expenditure Growth

  23. Real Per Capita Expenditures* * Includes Major Moves Investments

  24. Revenue Collections FY 2006 – FY 2011 *projected

  25. The Good News is: We Entered the Recession in a Strong Financial Position

  26. Budget Surplus/Deficit

  27. State Reserves (Cash – Liabilities)

  28. The Bad News is: The Challenges are Unprecedented

  29. Much Worse Than Prior Recessions

  30. Sales Tax: CY 2009 vs. CY 2008

  31. Budgeted Revenue: FY 2010-11 Forecast reduced over $3 billion in one year. Missed forecast 17 straight months

  32. Without Budget Management, State Reserves would be Depleted by End of Biennium

  33. Summary– Progress, But More Action Needed -$1.8 billion (=December 2009 revenue projection vs. May 2009 budget) +$770 million (= agency and education reductions) +$1 billion (= all remaining reserves and rainy day funds) -$112 million (=revenue loss since December 2009 forecast) = -$142 million deficit if no further actions are taken Goal– continue to take necessary actions to spend within our means, align operating expenses with operating revenues and avoid tax increases

  34. State Fiscal Outlook • Even if current forecast is met, state reserves balances will be fully expended • Next legislative session – portends most difficult biennial budget in memory: • Loss of federal stimulus funds ($867M SFSF) • Revenue and expenditure imbalance • No state reserves to draw down

  35. Distributing Scarce Resources

  36. Commission Budget Responsibilities and Priorities • Debt Service • College Completion Incentives: • Number of Degrees • On-Time Degrees • Low Income Degrees • Enrollment/Student Course Success Incentive • Research Funding Incentive • R&R • Economic Development • Two-Year Transfer Incentive • Student access and success (SSACI)

  37. Evolution of CHE Funding Recommendations

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