report to board of governors
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TRANSCRIPT
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FY 2009 Budget Update
April 22, 2009
Office of Budget, Planning and Analysis April 2009
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Agenda Topics• State Budget Update
• Review of FY 2009 Budget through 2nd Quarter
• Impact of WSU’s Financial Aid “Stimulus” Package
• Discussion of WSU Expenditure Trends
• Update on Budget Calendar
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State Budget Update
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State of MichiganBudget Update
2009 2010$7,000
$7,500
$8,000
$8,500
$9,000
$9,500
$10,000
Gen
eral
Fun
d Re
venu
e, in
mill
ions
May
200
8 Co
nsen
sus
Janu
ary
2008
Con
sens
us
4
UM
For
ecas
t
UM
For
ecas
t—la
st y
ear
• The FY 2009 $8.6 B in forecasted revenues are about $578 M less than state economists projected in May.--Green Arrow
• The FY 2010 general fund revenues (from Jan. est.) are expected to be $372 M less than projected revenues from current year— Blue Arrow
• Revised estimates indicate that January / February revenues collections were $100 M less per month — Red Arrow
• Next Revenue conference is May 15th
Janu
ary
2009
Con
sens
us
Janu
ary
2009
Con
sens
us
Mar
ch /
April
Rev
ised
Est
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State Appropriation ScenariosCurrent State Approp. = $221 M
Governor's Original Version (Cuts base by 3% and restores to FY 2008 Levels)
CategoryFY 2006 Actuals
FY 2007 Actuals
FY 2008 Actuals
FY 2009 FY 2010 FY 2011 FY 2012
Permanent $216,387 $196,819 $239,026 $214,237 $214,237 $214,237 $214,237Stimulus $0 $0 $0 $24,812 $24,812 $24,812 $0Total $216,387 $196,819 $239,026 $239,049 $239,049 $239,049 $214,237
House Version (Cuts base by 3% and restores to FY 2009 Levels)
CategoryFY 2006 Actuals
FY 2007 Actuals
FY 2008 Actuals
FY 2009 FY 2010 FY 2011 FY 2012
Permanent $216,387 $196,819 $239,026 $214,599 $214,599 $214,599 $214,599Stimulus $0 $0 $0 $6,637 $6,637 $6,637 $0Total $216,387 $196,819 $239,026 $221,236 $221,236 $221,236 $214,599
Version X (Cuts base by 5% and Restores to FY 2006 Levels)
CategoryFY 2006 Actuals
FY 2007 Actuals
FY 2008 Actuals
FY 2009 FY 2010 FY 2011 FY 2012
Permanent $216,387 $196,819 $239,026 $210,175 $210,175 $210,175 $210,175Stimulus $0 $0 $0 $6,212 $6,212 $6,212 $0Total $216,387 $196,819 $239,026 $216,387 $216,387 $216,387 $210,175
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Utilization of State Stabilization Fund
• Funds may be used for:– General expenditures (including
Financial Aid)
– Modernization / renovation of facilities used for instruction, research or student housing
• Funds may not be used:– the institution’s endowment– Routine facility maintenance– Improvement of athletic facilities– Improvement of facilities used for
religious worship
• Possible Reporting Requirements:– Use of the funds provided– How the State distributed the
funds– List of tuition rate increases by
IHEs and actions taken by the State to limit those increases
– Changes in IHE in-State enrollment, including students eligible for Pell or other need based aid
– Description of each improvement project with cost detail
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FY 2009 2nd QuarterBudget Update
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FY 2009 Revenues Outlook
GF Revenues Budget Proj. Actuals Variance State Approp. $220.9 M $220.9 M $ 0 M Tuition & Fees $271.9 M $267.0 M ($ 4.9 M) ICR $ 32.5 M $ 34.5 M $ 2.0 M Invest Income $ 4.2 M $ 2.2 M ($ 2.0 M) Other $ 5.4 M $ 5.4 M $ 0.0 M Total Revenues $ 534.9 M $530.0 M ($ 4.9 M)
Tuition declined as a result of enrollment shortfall in the fall semester Investment income is projected to decrease as a result of current economic
conditions
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FY 2009 Expenditures OutlookGF Expenditures Budget Proj. Actuals Variance
Compensation $357.9 M $348.9 M $ 9.0 M Operational Exp $94.2 M $ 97.2 M ($ 3.0 M) Facilities Services $ 39.9 M $ 39.4 M $ 0.5 M Financial Aid $ 43.0 M $ 47.4 M ($4.4 M) Total Expenses $ 535.0 M $532.9 M $ 2.1 M
Compensation is projected to be under budget due to reductions in positions from budget cuts
Financial Aid is projected to be over budget due to expenditures of carryforward funds
SUMMARY Total Revenues $ 534.9 M $530.0 M ($ 4.9 M)
• Total Expenses $ 535.0 M $532.9 M $ 2.1 M
• BALANCE($2.8 M)
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FY 2009 Enrollment Update--Headcount
FY 2008 FY 2009 # Variance%
Variance
HEADCOUNT Undergraduate
Fall 21,145 20,123 -1,022 -4.8%Winter 18,841 18,611 -230 -1.2%
GraduateFall 11,235 10,902 -333 -3.0%Winter 10,579 10,435 -144 -1.4%
TotalFall 32,380 31,025 -1,355 -4.2%Winter 29,420 29,046 -374 -1.3%
Category
1111
FY 2009 Enrollment Update—Credit Hours
Spring & Summer numbers are based on current estimates, through April 4th
FY 2008 FY 2009 # Variance%
Variance
Annual Credit Hours (Fall, Winter, & Summer Est)Undergraduate
Resident 448,968 443,521 -5,447 -1.2%Non-Resident 31,594 28,896 -2,698 -8.5%Total 480,562 472,417 -8,145 -1.7%
GraduateResident 183,852 181,201 -2,651 -1.4%Non-Resident 38,536 35,668 -2,868 -7.4%Total 222,388 216,869 -5,519 -2.5%
TotalResident 632,820 624,722 -8,098 -1.3%Non-Resident 70,130 64,564 -5,566 -7.9%
Category
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WSU’s Financial Aid Stimulus
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Financial Aid Terminology• The base tuition rate is just the “sticker price” of what it costs a family /
student to attend college if no financial aid is available• What the family /student actually pays depends on how much financial aid a
they receive through either scholarship.• Financial need is calculated by a federal formula which determines how much
the family is expected to contribute and how much the student can receive from the either the federal government, the state or from institutional grants
• What the family is expected to contribute is called the Expected Family Contribution (EFC)
– Typically, the lower your EFC, the more financial aid you will receive. Factors such as family size, number of family members in college, family savings, and current earnings (information you provide on the FAFSA) are used to calculate this figure.
– For WSU, on average, a $5000 EFC represents a household income of $60,000.
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Need Based Financial Aid ExamplesFamily #1:
• Household Income $25,000• One Child in College
• Living at Home• FY 2009
– Tuition $8,109– Pell Grant ($4,731)– SEOG Grant ($500)– BOGG Grant ($1,500)– Total Grants ($6,731)– EFC $0– Unmet Need $1,378
• FY 2010 (w/ 6% increase)– Tuition $8,595– Pell Grant ($5,350)– SEOG Grant ($500)– BOGG Grant ($2,746)– Total Grants ($8,595)– EFC $0– Unmet Need $0
Family #2: • Household Income $60,000
• One Child in College• Living at Home
• FY 2009 – Tuition $8,109– Pell Grant ($0)– SEOG Grant ($0)– BOGG Grant ($0)– Total Grants ($0)– EFC ($5,000)– Unmet Need $3,109
• FY 2010 (w/ 6% increase)– Tuition $8,595– Pell Grant ($0)– SEOG Grant ($0)– BOGG Grant ($3,596)– Total Grants ($3,596)– EFC ($5,000)– Unmet Need $0
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Distribution of Need Based Grants by EFC Level
0 1000 2000 3000 4000 5000 6000 7000 8000 8100+$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$1,378 $1,828 $1,828 $1,828 $1,719
$3,109 $2,109
$1,109 $109
UnmetBOGGSEOGPellEFC
2,800 657 485 368 314 206 135 111 102 544
49% 11% 8% 6% 5% 4% 2% 2% 2% 10%
FY 2009--Based on Lower Division Tuition Rates of $8,109—30 cr. Hrs.
Number ofFreshman
Note: An EFCof $5,000 equalsan approx familyIncome of $60k
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Distribution of Need Based Grants by EFC Level
0 1000 2000 3000 4000 5000 6000 7000 8000 8500+
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0
UnmetBOGGSEOGPellEFC
2,800 657 485 368 314 206 135 111 102 544
49% 11% 8% 6% 5% 4% 2% 2% 2% 10%
FY 2010--Based on Lower Division Tuition Rates of $8,595*--30 cr. Hrs.*assumes 6% tuition increase
Number ofFreshman
Note: An EFCof $5,000 equalsan approx familyIncome of $60k
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Expenditures Trends
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Source: HEIDI Data
Instruction as a % of Budget – Current Funds
Instruction includes expenditures for all activities that are part of the institution’s instruction program
FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 20080%
5%
10%
15%
20%
25%
30%
35%
40%
WSU MPU Avg.
Want to be above average for this category
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Source: HEIDI Data
Institutional Support as a % of ExpendituresCurrent Funds
Institutional support includes expenditures associated with executive-level activities concerned with management for the entire institution, such as the governing board, legal services and fiscal operations
FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 20080%
5%
10%
15%
20%
WSU MPU Avg.
Want to be below average for this category
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WSU Expenditure TrendsFY 1996 to FY 2009
FY 1996
FY 1997
FY 1998
FY 1999
FY 2000
FY 2001
FY 2002
FY 2003
FY 2004
FY 2005
FY 2006
FY 2007
FY 2008
FY 2009
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
43% 39%
28% 28%
4%9%
24% 25%
Schools & Colleges
Acad. Supp. & Divisions
Central Accounts
Financial Aid
Includes CLL as Part of Schools & Colleges Funding increases since FY 1996: S / C $69 M; AS & D $56 M
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Average Annual % Increase for Expenditures (FY 2004 to FY 2009)
Schools & Colleges
Acad Supp & Divisions
Fin Aid Cent Accts0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
4.2% 4.5%
8.1%
4.1%
Note: 82% of Central Accounts are made up of Fringes (52%), Debt Service (6%), Deferred Maint. (6%), & Utilities (18%)
University Average
(Grant Only)
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Upcoming Budget Dates
• Next Budget & Finance Meetings:– New Date July 1, 2009 (June 17th meeting postponed)
• Possible Discussion of Tuition Rates for FY 2010
– New Date August 5, 2009 (July 29th meeting postponed)
• Presentation of FY 2010 Current Funds Budget– Approval of General and Auxiliary Fund Budgets