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Presentation to thePresentation to the

Senate Budget and Taxation Senate Budget and Taxation CommitteeCommittee

University System of Maryland University System of Maryland

January 15, 2004

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Regents Effectiveness and Efficiency Initiative

• A University-wide commitment to review the most fundamental aspects of the academic enterprise and to improve total organizational performance

• Willingness to examine ideas, comments, and criticisms from all corners

3

Emerging E&E Transformation Themes

• Reduce the cost structure

• Create strategic reallocation model for enrollment management & growth

• Alternative financing approaches for core activities

• Maintain quality

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Specific Tasks in Support of E&E Themes

In Process• Faculty workload audit & policy

review• Presidents workgroup to plan for

expansion of on-line education• Presidents workgroup on

collaboration & consolidation• Hagerstown Center in January

2005• RFP for acquisition of outside

consulting services• Expand scope of current

efficiency system

Completed Campus utilization study Review of property & equipment

assets Executive compensation &

administrative staffing levels

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Administrative Salaries

• Salaries of senior executives– 70th percentile of national comparison groups for

comparable titles• Salaries of managers & supervisors

– 63rd percentile of Eastern region for comparable titles

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Administrative Staff

• Size of administrative staff– System institutions have a significantly better efficiency

rating vs peer institutions nationally

– Overall, USM institutions serve 30% more students per staff member (97.1 students to 1 staff) than their peers (67.7 students per 1 staff)

– 9 of 11 institutions have fewer staff per 100 students vs peer institutions nationally

– System’s Central Office ranks 28th out of 47 Systems in operating budget per headcount student (FY 2001); 17th out of 19 in number of staff per headcount student (FY 1997)

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The Budget in Brief

The budget crunch in public higher education is a national phenomenon causing major challenges for quality,

access and affordability.

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FY 2004 Cost Containment Actions

Expenditure reductions $120M (58%)

Total problem $206M & 787 positions eliminated

Tuition increases $75M (37%)

Other revenue $11M (5%)

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USM Position Summary FY 2002 – FY2004

• State 14,532 13,983 13,824 (5%)

• Non-state 4,958 5,309 5,263 6%

• Total 19,490 19,292 19,087 (2%)

FY 2003FY 2002 FY 2004 % change

FY 2004 position level reduced by 787 from original budget request.

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FY 2005 Current Services Budget

• State appropriation level-funded at $746.2M• Estimated mandatory costs included in budget - $71.3M• Selected programmatic needs - $7.7M• Costs not included:

– Health insurance inflation (per DBM instructions)– Enrollment growth

• Balancing the CSB– Effectiveness & Efficiencies initiatives & additional budget

reductions - $25M– Tuition increases - $55M

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USM – State Supported BudgetWhere the Dollars Come From

FY 2000 FY 2005

Tuition & Fees (33%)

USM State Appropriation (55%)

Tuition & Fees (46%)

USM State Appropriation (43%)

Other Unrestr. & Restricted (12%)

Other Unrestr. & Restricted (11%)

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State Dollars per USM Student

12

6000

6500

7000

7500

8000

8500

9000

9500

FY 92 FY 94 FY 96 FY 98 FY 00 FY 02 FY 04 FY 05

$ pe

r F

TE

stu

dent

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Funding Guideline Achievement

50%

60%

70%

80%

90%

100%

FY 00 FY 01 FY 02 FY 03 FY 04 FY 05

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Tuition

Maryland’s in-state resident tuition is high ― we are 6th in the nation ― and affordability

is a serious concern. Stabilizing tuition is an

imperative, but increasing state funding is as well.

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Top 10 states for Highest TuitionResident Undergraduate

1. Vermont $ 8,389

2. New Hampshire 7,744

3. Pennsylvania 7,448

4. New Jersey 7,206

5. Ohio 6,878

6. Maryland 6,246

7. Massachusetts 6,204

8. Delaware 6,191

9. Michigan 6,004

10. Connecticut $ 5,869

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-10

-5

0

5

10

15

20

1990 1993 1996 1999 2002 2005

State % change Resident Tuition % increase

State Funding &Tuition RelationshipHistorical Pattern

% C

han

ge

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State Wealth vs. State Spending on Higher Education

Per capita personal and disposable personal income - MD 4th

State general funds for higher education:• per $1,000 personal income – MD 38th

• per capita – MD 27th

• per student – MD 23rd

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Tuition - New Regents Policy

• Increased predictability for students and families• Increased institutional flexibility to propose tuition

rates based on:– Mission– Market opportunities and constraints – Pricing strategies

• An integrated four year plan with:– Enrollment projections – Resource needs– Funding Guideline achievement

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Enrollment -Joint Committee Report

“… the USM & Maryland's community colleges should respond as to the State's ability to meet enrollment growth and workforce demands,

while ensuring high quality, access and affordable tuition …”

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USM Headcount Enrollment

• FY 1999 106,773• FY 2002 119,300• FY 2004 125,939

• FY 2005

– Current Services Budget 127,497

– Separate List 130,269

• FY 2008 141,060

• FY 2011 153,307

32%

44%

20-22%

2121

Tho

usan

ds

1997 1999 2001 2003 2005 200755

60

65

70

Actual

Projected

Source of Enrollment DemandMaryland High School Graduates 1998 -2007

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Enrollment Strategies

What the Community Colleges & the USM will do together:

• Maximize current operating capacity• Community College / USM collaborations (UMUC)• Regional Centers• Complete associates degree before transferWhat the State can do:• Need-based aid• Predictable & affordable tuition• Predictable State funding

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The USM and the Maryland Economy

Higher Education is the raw material of the

new economy

Salary and Degree Level & Unemployment Rates

Average Annual Earnings (000s of $)

0 20 40 60 80 100 120

Source: U.S. Census Bureau, Current Population Survey, Annual Demographic Survey, March Supplement, Table PINC-03, March 2003 (for calendar 2001, individuals ages 25 and over).

Less than H.S.

H.S. graduate

Some college,no degree

Associate degree

Bachelor's degree

Master's degree

Doctorate

Professional

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< 2%

< 2%

< 2.5%

< 2.5%

4%

4+%

5+%

8+%

Research DollarsPer Capita by State

100

150

200

250

300

MD MA AK NC HI IA UT NM CO CA

Source: Milken Institute

US

$ P

er C

apit

a

25

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University’s Role in Job Creation and Enterprise Development

• Maryland is ranked 1st nationally in % of population with college+ education

• Our State is ranked 2nd nationally in knowledge jobs

• This State scores highest nationally in Workforce Development

• Maryland is ranked 5th among the states in its capacity as a Knowledge Economy

Source: New Economy Index

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Recent Economic Investments

• Despite tough times …– Governor and General Assembly continue to

support a strong capital facilities program– Governor funded, and General Assembly

approved, Sunny Day grants for major research parks at UMCP and UMB

– Governor provided $500,000 from TEDCO for technology transfer projects