Tuition policy advisory committee meeting september 2 2003
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Tuition Policy Advisory Committee Meeting September 2, 2003. Committee Meeting #1. Today’s Agenda. President’s Welcome Procedural Issues Background Information recent history university finances… next year’s budget tuition & fees. Welcome and Thank You for Agreeing to Serve!.

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Tuition policy advisory committee meeting september 2 2003

Tuition Policy AdvisoryCommittee MeetingSeptember 2, 2003

Committee Meeting #1


Today s agenda

Today’s Agenda

President’s Welcome

Procedural Issues

Background Information

recent history

university finances…

next year’s budget

tuition & fees






Recent history1
Recent History

  • Aging infrastructure confirmed by third party studies – conclusion: Under funding R&R $20M per year

  • Infrastructure fee proposed but rendered impractical by AG ruling

  • Legislative solutions sought with limited success

  • UBC focused on $40M recurring shortfall for the FY03/04 fiscal year:

    • $ 5M Aggressive cost savings measures

    • $25M General budget reductions undertaken

    • $10M R&R budget reduced to cover final legislative “dings”


Legislative session outcome

Positives

Negatives

Legislative Session Outcome

  • 100% IDC Retention +$20M

  • Tuition Flexibility

  • Continued downward trend in State financial support

    • GR reduction ($22M)

    • P/T Benefits ($6M)

    • 90 Day Wait ($2M)

    • TX Tomorrow ($3M)

    • B-on-Time ($?M)

    • Higher tuition set asides

$20M

-$33M


Budget issues to deal with
Budget issues to Deal with

  • $30M annual shortfall in R&R funding

    • $20M annual coming into the year

    • $10M reduction to balance the Fy03/04 budget

  • $15M recurring shortfall in competitive compensation funding



University Finances

FY03/04 Total University Budget $1.44B

Educational & General Component

59%

Endowment Component

9%

Total University Budget

$846.7M+ 6.8%

$1.44B + 4.7% or $63M

$129.1M – 1.0%

Research Component

20%

Auxiliary Component

12%

$292.2M + 12.6%

$176.6M + 2.2%


University FinancesHow does State General Revenue fit into the Picture?


The Permanent University Fund (PUF)

Why isn’t it enough?

PUF Lands==> 02’ Market Value $6.7B

<== return on investment

Available University Fund

2/3 UT System

1/3 A&M System

System Costs

PUF Bonds

UT Austin

UT Austin receives about 30% of the

total distributed income from the PUF

UT Austin

Fy03/04 $109.4M



Budget accomplishments
Budget Accomplishments

  • For our State

    • Improved research competitiveness

  • For our Students

    • Additional faculty positions

    • Increased tuition & scholarship support

    • Capacity to invest in specific programmatic initiatives

  • For our Employees

    • Preservation of a competitive benefit program

    • Possibility of mid-year salary program


It was a challenge to balance the budget
It was a challenge to balance the budget!

  • Efficiency Improvements

    • $5M from Office Supplies & Credit Card changes…more to come

  • Across-the-board Budget Reductions

    • $25M total reductions…$4M from occupied positions

  • Reduced Infrastructure Funding

    • $10M reduction in an area already under funded!


What are our continuing challenges
What are our Continuing Challenges?

  • Infrastructure Funding - $30M annual shortfall


Facility Aging Drives Repair & Renovation (R&R) RequirementsThere is a significant bubble of R&R requirements in the near future.

A substantial portion of the University’s Plant, those projects built in the 50’s through 80’s, is approaching 30-60 years old and will require substantial repair and renovation.


Why is a near term infrastructure solution needed why can t this wait
Why is a Near Term Infrastructure Solution Needed – Why can’t this wait?

  • Campus & Building Safety

  • Cost

  • Usability / Habitability

  • Continuity of Plant Operations


What are our continuing challenges1
What are our Continuing Challenges? can’t this wait?

  • Competitive Compensation Program Funding - $15M recurring


Tuition fees
Tuition & Fees can’t this wait?


Appropriation & Tuition and Fees Collected per FTE 1999/00 can’t this wait?

UT vs. Peer Institutions


Competitive Position – Tuition & Mandatory Fees can’t this wait?

UT vs. Other Institutions

(2002 Data)

Source: Morgan Stanley, based on information from the College Board and the Chronicle of Higher Education..


A rule of thumb for planning
A Rule of Thumb can’t this wait? for Planning

  • Every dollar increase in tuition generates about $1M of net revenue, after set-asides, for the University on an annual basis.

  • Therefore, a student taking 28 SCH annually would pay $28 more in tuition per year for each $1 increase in tuition.


Next steps
Next Steps can’t this wait?


The challenge summary
The Challenge Summary can’t this wait?

  • Infrastructure Funding - $30M annual

  • Compensation Program Funding - $15M recurring


Possible near term solutions
Possible Near Term Solutions can’t this wait?

  • Reduce expenses elsewhere and reinvest in R&R

    • Just completed exhaustive effort

    • Impossible to not impact people

  • Reduce / eliminate January compensation program

    • Increases competitive issues

    • Not a long-term fix

  • Increase tuition


Thank you
Thank You can’t this wait?


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