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FY12-13 Budget Pre-Session Projections vs Actual Legislative Outcomes

FY12-13 Budget Pre-Session Projections vs Actual Legislative Outcomes. August 09, 2011 Rick Straka. FY12-13 Planning Data. Estimated State Budget Gap of $5.8 to $7 Billion Gap Approx. 15% - 22% of State General Fund Budget MSU FY11 Appropriation Approx $45M 20% Reduction Equals Approx. $9M

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FY12-13 Budget Pre-Session Projections vs Actual Legislative Outcomes

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  1. FY12-13 BudgetPre-Session ProjectionsvsActual Legislative Outcomes August 09, 2011 Rick Straka

  2. FY12-13 Planning Data • Estimated State Budget Gap of $5.8 to $7 Billion • Gap Approx. 15% - 22% of State General Fund Budget • MSU FY11 Appropriation Approx $45M • 20% Reduction Equals Approx. $9M • $9M Equates to 13% Tuition Increase • Estimate 5% Tuition to Approximately Offset Inflation costs

  3. FY12-13 Planning Data • Estimated State Budget Gap of $5.8 to $7 Billion • Gap Approx. 15% - 22% of State General Fund Budget

  4. FY12-13 Post Session • Plan: Estimated State Budget Gap of $5.8 to $7 Billion • Gap Approx. 15% - 22% of State General Fund Budget • Outcome: $5.0B Budget Gap Not Structurally Solved • $2.1B (40%) of $5B Gap is One-Time Solution • $1.4B Bonds Against Future Tobacco Payments • $700M Delay in K-12 Payments

  5. State of MN Deficit SolutionPermanent VS. One-Time

  6. FY12-13 Planning Data • MSU FY11 Appropriation Approx $45M • 20% Reduction Equals Approx. $9M • $9M Equates to 13% Tuition Increase

  7. FY12-13 Post Session • Plan: MSU FY11 Appropriation Approx $44.5M • 20% Reduction Equals Approx. $9M • $9M Equates to 13% Tuition Increase • Outcome: MSU FY12 Appropriation $41.8 • 8.2% Reduction of $3.7M • $3.7M equates to a 5% Tuition Increase

  8. MSU Change in State Appropriation FY11 to FY12

  9. FY12-13 Planning Data • Estimate 5% Tuition to Approximately Offset Inflation costs

  10. FY12-13 Post Session • Plan: Estimate 5% Tuition to Approximately Offset Inflation costs • Outcome: Inflation Costs Are Not Yet Known

  11. FY12 Plan and Actual • Planned Reductions at 15% - 22% of Appropriation • Actual Reduction at 8.2% • Results in Spending Reductions of $6M to $10M • $8M in Reductions Identified • Stable FY11 and FY12 Enrollments • Enrollment Growth in FY11 and Projected in FY12

  12. What Does it Mean? • Legislature/Governor “kicked the deficit down the road” to FY14. • Structural Budget Stability Not Yet Attained at State Level • FY12-13 Less Ominous Than Projected • We Can Expect FY14 Appropriation Reductions

  13. State of MN Deficit SolutionPermanent VS. One-Time

  14. How Does Minnesota State, Mankato Respond? • Must Plan For What Level of Identified Reductions Are Needed to Solve FY14 • Must Treat Those Delayed Reductions as Temporary Budget Relief • Restoring All the Identified Reductions into Base Budget is not Prudent • Positions Minnesota State to React to FY14 Deficit Without Searching for Reductions Beyond Those Which Have Already Been Identified.

  15. Other Factors • Office of Chancellor Finance Staff is Urging Campuses to Consider “New Normal” Economic Challenges in Long Term (10 year) Budget Plans • Current National and Global Economic Uncertainties • Long Term Impact of Federal Spending Reductions on Higher Education

  16. FY12-13 BudgetPre-Session ProjectionsvsActual Legislative Outcomes August 09, 2011 Rick Straka

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