5-Year Budget Outlook

1. Postsecondary Education Review CommissionImpact of Shifting Enrollments on Resources in Louisiana September 29, 2009

2. 5-Year Budget Outlook 1.9 1.9 .9 10.7 10.5 9.4 9.1 8.1 9.4 8.1 8.2 8.5 8.8 2 Source: Louisiana Division of Administration

3. Postsecondary Education “Budget” Outlook and Issues • FY2009-10, the current year • Effective reduction of $120+ million in direct operational funding between State fund reductions and federal stimulus replacement, an 8.7% effective reduction in “State” support but only a 3.3% reduction in overall support • FY2010-11, next fiscal year • Uncertainty of outlook • Recent communication from the Administration to the Postsecondary Education Review Commission projecting a minimum $146 million additional funding reduction • FY2011-12, the following fiscal year • Projected “big budget problem”, a State budget shortfall projected at almost $2 billion • Federal stimulus funding ends

6. Louisiana Office of Student Financial Assistance andStudent Financial Assistance • TOPS - $130 million • Go Grant - $34 million • Dual Enrollment - $5.5 million

7. Source: Louisiana Board of Regents

8. Source: Louisiana Board of Regents

10. $313.4M General Fund Reduction after 08-09 mid-yr reduction

11. Stimulus Supported Base $1.3 B Federal Stimulus $189.7M

12. Minimum $146M SGF Reduction projected for FY10-11

13. Federal Stimulus $189.7M Minimum $146M SGF Reduction projected for FY10-11

14. Stimulus Supported Base $1.155B Federal Stimulus $189.7M Minimum $146M SGF Reduction projected for FY10-11

15. 146M SGF Reduction

16. $146M SGF Reduction $459.3M General Fund Reduction from 08-09 Level (after $55M mid-year cut)

17. Institutions Health sciences centers Agricultural centers Law centers Stand-alone research centers Boards and system offices With StimulusWithout Stimulus $976.0 $821.9

22. Analysis of Shifting Enrollment • Differences in funding approaches between “old” and “new” formulas are significant • New formula sets values for student credit hour production specifically for each institution, by level of student and discipline of the student credit hour • Differentials remain in values based upon “type” of institution and its specific costs (SREB category) • State/student shares of cost are function of “type” of institution (generally 60% or higher share for State @ 4-Yr vs. 70%+ State share @ 2-Yr.)

23. Analysis of Shifting Enrollment • Analysis is based upon overall enrollment, not just entering freshmen cohort • Time will be required to “shift” enrollment in substantial amounts • Nature of “shift” in mix will depend upon: • Overall growth in enrollment • Degree of stability in 4-year enrollment • Degree of growth in 2-year enrollment • Possible Causes of “shift” • Admissions standards • Growth in additional students to 2-year institutions • Enrollment caps at 4-year institutions • Significant change in “pricing” of respective types of institutions • “Savings” potential from shifting enrollments: • SREB rates vs. Actual funding rates • Impact of new formula approach • Lowest funded 4-year institutions are likely to yield the most significant areas for potential shifts of enrollment, thus less “savings” potential