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State Funding & Financial Planning: Budget Leaders 03/24/10

State Funding & Financial Planning: Budget Leaders 03/24/10. State Budget Context. March 2010 State Forecast. Beginning a slow recovery FY 2009-10 $6.5 -$6.7 billion revenue projections No further reductions FY 2010-11 $7.1 billion revenue projection

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State Funding & Financial Planning: Budget Leaders 03/24/10

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  1. State Funding & Financial Planning: Budget Leaders 03/24/10

  2. State Budget Context

  3. March 2010 State Forecast • Beginning a slow recovery • FY 2009-10 • $6.5 -$6.7 billion revenue projections • No further reductions • FY 2010-11 • $7.1 billion revenue projection • One-time budget balancing: $212.2-$320.6 million • FY 2011-12 Legislative Council estimate of cliff, without caseload adjustments, $580 million

  4. Governor Ritter 2/18/2010:Tough Choices • 97% of the FY 2010-11 General Fund request is devoted to just five areas of service: • 43.0%, K-12 Education is the largest component of the General Fund budget and was off limits when balancing in FY 2009-10 due to a required 5% General Fund increase. • 19.9%, Health Care Policy and Financing provides services that are mostly entitlement programs that have a counter-cyclical relationship with the economy. • When the economy goes down, Medicaid enrollments go up. • 9.2%, Human Services are provided to the state’s most vulnerable and highest risk populations such as those with developmental disabilities or mental illness, juvenile delinquents, and children who are the victims of abuse and neglect. • 15.5%, Corrections, Public Safety and Judicial provide public safety services and staffing levels that were reduced during the last recession have still not been restored. Judicial staffing was increased pursuant to HB 07-1054. • 9.4%, Higher Education is one of the last remaining areas of the budget where there continues to be budgetary flexibility and where funding has been temporarily maintained with federal stimulus funds. Source: Governor's Office of State Planning

  5. Colorado DHE: Higher Education Funding Total Higher Education Funding in Millions

  6. Colorado DHE: UNC Funding Federal Funds ? State Funds UNC Funding in Millions

  7. State Funding: One Piece of The Puzzle University Budget $170 million *Does not include Sponsored Program Budget $10 million

  8. UNC University Revenues $170 M (millions)

  9. University Revenues $170 M (millions)

  10. UNC Student Revenue $109.5 M (millions)

  11. University Budget Uses University Budget Revenue Sources State Students: Tuition, Fees, Room & BoardMiscellaneous Capital Appropriations Operating Budget • Regular Operating Expenses • Debt Service (Bonds & Capital Leases) • Transfer to reserves • Transfer to capital projects • Prior year roll-forward retained by units • Centrally allocated one-time expenses • Contingency Innovation Budget • One-time investments and incentives Capital Budget

  12. 3-Year Financial What If? • Revenue • On-campus enrollment grows (12% UG/17% GR) and tuition rates increase 9% annually • Extended Studies revenue grows by $3 million • Room & Board revenue grows by 11% • The state funding cliff is $23 million (FY10 state funding remains constant with no more federal funds) • Discounting • 25% of new UG and GR tuition is used for increases in institutional discounting • 16% of new Room & Board revenue is used for increased discounting

  13. FY 2013 Revenue What If?

  14. 3-Year Financial What If? • Expenses • Salaries increase 0% in FY11 and 3% in FY12 & FY13 • Fringe benefits increase 10% annually • We invest an additional $3 million in faculty/adjunct costs for on-campus and Extended Studies • Cost of sales increases 3% annually • Utilities increase $0.5 million • We make $1 million investment in incentives and growth • Debt service increases $1 million • OCE/Travel/Capital remains the same

  15. FY 2013 Expense What If?

  16. FY 2013 Gap What If?

  17. FY 2013 Gap What If? Revenue Variations

  18. FY 2013 Gap What If? Expense Variations

  19. UNC’s Reserve Status * Projected from On-campus Tuition, Extended Studies, Room & Board

  20. Focus on what we can control

  21. Budget Timetable (March-May)

  22. Budget Timetable (May-Fall 2010)

  23. FY11 Budget Topics • Pricing / Discounting • Internal Charging • Unfunded/Unbudgeted Operations & Impact of Prior Reductions • Short-term Capital • Quality of Life Student Fee • Extended Studies • Course/Library/Tech Fees • Summer & Interim Session

  24. SB146 PERA Contribution Change • What is the impact of SB146 on UNC? • Employees • University

  25. Next Steps

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