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Tuition Policy Advisory Committee Meeting September 2, 2003

Tuition Policy Advisory Committee Meeting September 2, 2003. Committee Meeting #1. Today’s Agenda. President’s Welcome Procedural Issues Background Information recent history university finances… next year’s budget tuition & fees. Welcome and Thank You for Agreeing to Serve!.

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Tuition Policy Advisory Committee Meeting September 2, 2003

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  1. Tuition Policy AdvisoryCommittee MeetingSeptember 2, 2003 Committee Meeting #1

  2. Today’s Agenda President’s Welcome Procedural Issues Background Information recent history university finances… next year’s budget tuition & fees

  3. Welcome and Thank You for Agreeing to Serve!

  4. Procedural Issues

  5. Working Timeline

  6. Recent History

  7. Recent History • Aging infrastructure confirmed by third party studies – conclusion: Under funding R&R $20M per year • Infrastructure fee proposed but rendered impractical by AG ruling • Legislative solutions sought with limited success • UBC focused on $40M recurring shortfall for the FY03/04 fiscal year: • $ 5M Aggressive cost savings measures • $25M General budget reductions undertaken • $10M R&R budget reduced to cover final legislative “dings”

  8. Positives Negatives Legislative Session Outcome • 100% IDC Retention +$20M • Tuition Flexibility • Continued downward trend in State financial support • GR reduction ($22M) • P/T Benefits ($6M) • 90 Day Wait ($2M) • TX Tomorrow ($3M) • B-on-Time ($?M) • Higher tuition set asides $20M -$33M

  9. Budget issues to Deal with • $30M annual shortfall in R&R funding • $20M annual coming into the year • $10M reduction to balance the Fy03/04 budget • $15M recurring shortfall in competitive compensation funding

  10. University Finances

  11. University Finances FY03/04 Total University Budget $1.44B Educational & General Component 59% Endowment Component 9% Total University Budget $846.7M+ 6.8% $1.44B + 4.7% or $63M $129.1M – 1.0% Research Component 20% Auxiliary Component 12% $292.2M + 12.6% $176.6M + 2.2%

  12. University FinancesHow does State General Revenue fit into the Picture?

  13. The Permanent University Fund (PUF) Why isn’t it enough? PUF Lands==> 02’ Market Value $6.7B <== return on investment Available University Fund 2/3 UT System 1/3 A&M System System Costs PUF Bonds UT Austin UT Austin receives about 30% of the total distributed income from the PUF UT Austin Fy03/04 $109.4M

  14. Next Year’s Budget

  15. Budget Accomplishments • For our State • Improved research competitiveness • For our Students • Additional faculty positions • Increased tuition & scholarship support • Capacity to invest in specific programmatic initiatives • For our Employees • Preservation of a competitive benefit program • Possibility of mid-year salary program

  16. It was a challenge to balance the budget! • Efficiency Improvements • $5M from Office Supplies & Credit Card changes…more to come • Across-the-board Budget Reductions • $25M total reductions…$4M from occupied positions • Reduced Infrastructure Funding • $10M reduction in an area already under funded!

  17. What are our Continuing Challenges? • Infrastructure Funding - $30M annual shortfall

  18. Facility Aging Drives Repair & Renovation (R&R) RequirementsThere is a significant bubble of R&R requirements in the near future. A substantial portion of the University’s Plant, those projects built in the 50’s through 80’s, is approaching 30-60 years old and will require substantial repair and renovation.

  19. Why is a Near Term Infrastructure Solution Needed – Why can’t this wait? • Campus & Building Safety • Cost • Usability / Habitability • Continuity of Plant Operations

  20. What are our Continuing Challenges? • Competitive Compensation Program Funding - $15M recurring

  21. Tuition & Fees

  22. Appropriation & Tuition and Fees Collected per FTE 1999/00 UT vs. Peer Institutions

  23. Competitive Position – Tuition & Mandatory Fees UT vs. Other Institutions (2002 Data) Source: Morgan Stanley, based on information from the College Board and the Chronicle of Higher Education..

  24. A Rule of Thumb for Planning • Every dollar increase in tuition generates about $1M of net revenue, after set-asides, for the University on an annual basis. • Therefore, a student taking 28 SCH annually would pay $28 more in tuition per year for each $1 increase in tuition.

  25. Next Steps

  26. The Challenge Summary • Infrastructure Funding - $30M annual • Compensation Program Funding - $15M recurring

  27. Possible Near Term Solutions • Reduce expenses elsewhere and reinvest in R&R • Just completed exhaustive effort • Impossible to not impact people • Reduce / eliminate January compensation program • Increases competitive issues • Not a long-term fix • Increase tuition

  28. Thank You

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