Transcript Current UW Budget Process - University of Washington

FUTURES COMMITTEE: CHARTER REVIEW
The UW Futures Committee was convened to:
• explore the state of higher education funding
across the country and in Washington State
• discuss the current situation at the University
• research cost and alternative delivery models and
revenue enhancement
• identify the University of Washington’s critical
strengths
• pinpoint opportunities to capitalize on potential
solutions
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FUTURES COMMITTEE: STATE APPROPRIATIONS
Annual State Appropriations to the UW
450,000,000
400,000,000
350,000,000
Appropriations
300,000,000
250,000,000
State Near General Fund
200,000,000
150,000,000
100,000,000
50,000,000
FY04
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FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
SNAPSHOT UW: WORKHORSE & SHOWHORSE

UW provides 30% of all BA degrees in WA
(40% of public BA degrees) and 39% of graduate and
professional degrees (72% of public degrees)
• 50k students plus 41K outreach students
• Produced 14K degrees last year alone
• Over half of BA students graduate with no debt
rd
• Oversees four hospitals provide 1/3 of state’s
charity care
• Ranked in the top ten public research universities
in the country by US News & World Report
• First public research university in the country for
federal research funding
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REVIEW OF FIRST MEETING
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•
President Young noted that the UW is on the cusp of
significant change with respect to students, structure, and
funding
•
Paul Jenny reviewed UW budget, student data, personnel
data, degree production, and research activity
•
President Sexton discussed the differentiation of missions
within higher education and affirmed that top universities
should seek the most talented students and faculty, which
is an expensive, but essential endeavor;
FORTHCOMING MEETINGS
National
Context,
UW 101
Revenues &
Options
Meetings 4-6
Mtg. 2
Mtg. 1
Mtg. 3
Costs and
Goals
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Exploration of Options
and Ideas Identified by
Committee
Contemplating College “Costs”
Paul Jenny
Vice Provost, Planning & Budgeting
June 14, 2012
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GENERAL “COST” VS. “PRICE” PRINCIPLES
 COST and PRICE are different but often conflated in
discussion of college ‘costs’
•
Cost refers to expenditures made by the
institution for the purpose of instruction
on per-student basis
•
Price refers to the amount of money a student
pays to attend
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GENERAL “COST” VS. “PRICE” PRINCIPLES
 It is easy to name the price of a degree; it is much
more challenging to correctly evaluate its cost
•
Some expenditures are difficult to distribute
among research, instruction and public service:
e.g. faculty salaries and benefits
 Why discuss costs? To align the price of a degree with
its cost? To evaluate productivity? We cannot do this
without also assessing quality
 Regardless of the challenges, we can meaningfully
discuss cost drivers and their evolution over time
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WHY DOES COLLEGE COST SO MUCH?
 It is a service industry, and service industry costs rise
more rapidly than the cost of producing goods
•
Higher education prices have grown similarly to
other personal services offered by highly educated
providers (e.g. dentists, lawyers)
 It is difficult for a service industry to increase
productivity without decreasing quality – but
remember, there is currently no established way to
reliably measure quality
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UW CONTEXT: CONSTRAINED RESOURCES
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
At one time, the state legislature set UW enrollment
and based tuition on an estimate of cost

Then the demand for more graduates increased and
enrollments outpaced available state support

Overall tendency has been to “squeeze” in more
enrollments with fewer resources and increased
tuition, which places access to education and the
quality of the education at odds
SHIFTING SOURCES OF EDUCATIONAL REVENUE
STATE AND TUITION FUNDING PER FTE
(in 2013 Dollars)
$25,000
$16,000
$17,000
$20,000
$15,000
$10,000
$5,000
$0
Tuition Revenue per FTE
State Funding per FTE
Total Funding per Student FTE
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FUNDING TRENDS
Decline in Funding per FTE Student
(in 2013 Dollars)
$19,668
$741
$1,933
$18,927
$17,500
$2,565
$2,833
$2,875
Gap from 2007-08 Funding Level
$17,735
$17,103
$16,835
$16,793
$15,000
$12,500
$10,000
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Funding per FTE is $3,000 less than it was in FY08, due to
declining state funding and increasing enrollments
Over the last ten years, comparatively more expensive STEM
degree production increased 60%
A TIPPING POINT AT THE UW?

Our primary educational goals include:
 To contribute to building an educated and
engaged citizenry in Washington.
 To produce the graduates our economy
needs in order to prosper
 To make sure that all Washingtonians –
regardless of income – have an equal
chance to work towards a UW degree
 To preserve the quality of a UW diploma
and honor our graduates’ Husky Pride
And yet…
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A TIPPING POINT AT THE UW?



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Already doing more with less
Additional efficiencies plus student growth
threaten quality and quantity of education,
research and service
Non fungible sources are growing while
educational funding sources decline
Public investment in unrestricted form unlikely
to return
Tuition revenue can only be raised so much
before the public mission is compromised
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UW CONTEXT: EDUCATION COST DRIVERS

Human Capital
•

Student Financial Aid
•
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Increasing deferred maintenance backlog
Technology
•
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As we maintain student access, higher prices
(tuition) create new costs (financial aid)
Physical Plant
•

More than 77 percent of central educational
resources are spent on salaries and benefits
Educational delivery and administrative
systems are at the end of their useful life
UW CONTEXT: EDUCATION COST DRIVERS

Faculty
•
We are raising enrollment while faculty numbers
remain stagnant in comparison, increasing faculty’s
instructional burden
•
Faculty compensation for instruction is relatively
flat, which may encourage them to focus more on
seeking lucrative research grants than teaching
•
We risk losing our best faculty to “richer” peers and
limiting our opportunity to hire rising stars
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UW CONTEXT: EDUCATION COST DRIVERS
5,000
50,000
4,000
40,000
3,000
30,000
2,000
20,000
Instructional Faculty FTE
1,000
10,000
"State-Funded" FTE Enrollment
-
0
2007-08
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2008-09
2009-10
2010-11
2011-12
Student FTE Enrollment
Faculty/Staff FTE
Student Enrollment and Faculty/Staff FTE
UW CONTEXT: EDUCATION COST DRIVERS
•
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The proportion of faculty and all other staff
that will be retiring in the near future is fairly
high
AGE
All Faculty
Tenured/Tenure
Track Faculty
Other Staff
>60
24%
33%
40%
>65
12%
17%
30%
>70
4%
6%
19%
UW CONTEXT: FINANCIAL AID AND STUDENT ACCESS

If we admit students without regard to ability to pay
and strive to at least maintain student access, higher
prices (tuition) create new costs (financial aid).
Undergraduate Residents
Tuition Levels and Tuition-Funded Need-Based Aid
$15,000
$50.0
Tuition-Funded Aid
$12,000
$40.0
$9,000
$30.0
$6,000
$20.0
$3,000
$10.0
$0
$0.0
2007-08
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2008-09
2009-10
2010-11
2011-12
Total Aid (millions)
Undergraduate Resident Tuition
Tuition
UW CONTEXT: FINANCIAL AID AND STUDENT ACCESS

In fact, in order to maintain access, a higher proportion
of tuition needs to be used for aid as tuition increases,
unless there are other sources of aid.
Undergraduate Residents
Tuition Returned in Need-Based Financial Aid
$12,000
$10,000
Need-Based Aid
Tuition Remaining
$8,000
$6,000
$4,000
$2,000
$0
2008-09
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2009-10
2010-11
2011-12
2012-13
WHERE DO WE GO FROM HERE?
Opportunities abound
 Noted aging and underpaid workforce,
evolving student needs, baccalaureate
degree expansion exigency
 What do we want to be, and how do we get
there?
 What do we do best and how do we
preserve it while simultaneously expanding
its reach?
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