University committee on faculty affairs October 8, 2013 budget and planning overview

1. University committee onfaculty affairsOctober 8, 2013budget and planning overview

2. Office of Planning and Budgets MSU All Funds Revenues 1990: $0.7B 2012: $2.0B Departmental $40M 6% Auxiliary: $121M 17% Tuition & Fees: $134M 19% Auxiliary: $293M 14% Tuition & Fees: $641M 31% Departmental $165M 8% Other: $14M 2% Other: $31M 1% Gifts: $174M 9% Appropriations: $206M 30% Sponsored Programs: $137M 20% AgBio Research/MSUE: $38M 5% AgBio Research/MSUE: $52M 3% Sponsored Programs: $443M 22% Gifts: $44M 6% Appropriations: $241M 12% • Ranking: • Appropriation • Sponsored Programs • Tuition & Fees • Auxiliary • Gifts • Ranking: • Tuition & Fees • Sponsored Programs • Auxiliary • Appropriation • Gifts

3. MSU All Funds Expenses 1990: $0.7B 2012: $2.0B By Fund Fluctuations between annual revenue and expense totals vary with investment performance and state appropriations outcomes

4. State Appropriations Support State Appropriations History If increased at inflation, MSU appropriations would be $166.6M more than current levels Appropriations down $81M over 10 years

8. Big Ten Non-Resident Tuition & Fees / Cost of Attendance MSU ranks 3rd in the Big Ten for non-resident tuition and fees and 5th for cost of attendance Non-Resident Cost of Attendance Non-Resident Tuition & Fees

9. Big Ten Resident Tuition & Fees / Cost of Attendance MSU ranks 6th in the Big Ten for resident tuition and fees and cost of attendance Resident Tuition & Fees Resident Cost of Attendance

10. MSU Endowment Status

11. Big Ten Revenues IPEDS 2010-11 reporting

12. Total Growth in Expenses Big Ten Median & MSU FY07-FY11 Big Ten Max Big Ten Min Big Ten Median As of 06/30/2011

13. Big Ten Net Assets Commonly used peer comparison that does not account for structural differences between institutions (i.e. Hospitals, System Consolidation, Agricultural Experiment Stations, etc As of 06/30/2011

14. Total Growth in Unrestricted Net Assets Big Ten & MSU FY07-FY11 Big Ten Min Big Ten Median Big Ten Max As of 06/30/2011

15. Total Growth in Debt Big Ten Median & MSU FY07-FY11 Big Ten Median Big Ten Min Big Ten Max As of 06/30/2011

16. Moody’s Long Term Credit Ratings Big Ten As of 01/11/13

17. Summary of Current Bonded Debt • *In addition to the above, MSU also has $81M in short-term commercial paper to be converted to long-term debt, and $143M in short-term commercial paper to be repaid by internal units • Outstanding debt includes issues 2000A, 2003A, 2005, 2007A, 2007B, 2010A, 2010C

18. Composite Financial Index Five Year Performance Targeted range from 6-7 Adverse performance results mainly from loss of appropriations and negative investment returns

19. MSU Financial Data Big Ten Comparison Research Expenditures • Dollars in Thousands Source: NSF Survey

20. Private Support Total Annual Giving Base year represents capital campaign effort for MSU and Purdue As of 06/30/2011Source: VSE Report

21. Endowment Market Value Includes approximately $749M traditional endowment, $651M endowment trust and $318M MSU Foundation SOURCE: Council for Aid to Education reports Institutions with on campus hospitals, such as U of M, include patient donor support in the above calculations

22. MSU Budget Process • Involves engagement of campus stakeholder groups • Board of Trustees • Academic governance • ASMSU • COGS • Refines multi-year planning focused on improving the value proposition for stakeholder • University administrators • Collective bargaining groups • RHA • State policy makers

23. MSU Long-Term Planning Spartans Will.

24. Academic Initiatives • Creating a Campus-wide Strategy for data, technology, teaching and learning • Creating a campus climate to support interdisciplinary work • Closing the graduation gap • Fostering a healthier campus

25. Long-Term Financial Framework • An updated ten year analysis of eight critical university areas requiring long-term support because of current state and federal financial circumstances • The eight categories are: • Just-in-Time Facilities Renewal • Administrative Computing (EBSP, EBSP Transition, Research Administration, SIS) • Specialized Research Space • Financial Aid • Health Care • F-RIB • Academic Quality • Energy/Other Regulatory Issues

26. State Appropriations Timeline November-December 2013Executive Branch January 20142013-14 executive budget recommendation March, April, May, 2014 Legislative hearings: House and Senate July 2014 State appropriation passed

27. MSU Internal Timeline June-October, 2013 Trustees act on 2013-14 budgets and 2012-13 budget request Fall 2013 Budget & Planning - Strategic Issues February - May 2014 Budget Planning Meetings April-May, 2014 Admin/Board discussion on 2014-15 budget guidelines June, 2014 Preliminary 2015-16 operating and capital outlay request formulated June-July, 2014 Board action on final 2014-15 budgets August, 2014 Administration consultation on 2015-16 budget request October, 2014 Trustees act on 2014-15 budget request

28. General Fund Budget Development Separately Reviewed Items Operating Units Formula based on budget proposal • Salary increments • Operating support • 1% reallocation • Financial aid • Utilities • Health care • Other benefits • Financial framework Differential • Program allocations • Reductions

29. Budget Guidelines Summary • Preliminary 2013-14 budget approved by the BOT in June 2012 • *Includes 1.5% general merit, 0.5% college market, and 0.5% provost market pool • ** Includes 1.5% general merit, 0.75% college market, and 0.5% provost market pool • ***Infrastructure financing

30. Budget Rates of Change Higher education Price index average approximates 2.44% for most recent five year period (through 2012)

31. Thank You